The Township Economic Development Bill was passed on March 24 in the Gauteng Legislature and has been welcomed by the Gauteng Department of Economic Development (GDED) as an opportunity to rebuild the economic geography of the country’s townships and disadvantaged communities.

The Bill is noted as a significant regulatory and policy instrument to provide citizens and communities in the Gauteng City Region (GCR) with meaningful classes of benefits.

Overall, these instrumental benefits are geared towards, among others, the promotion of inclusive human settlements by bringing people closer to economic opportunities; the development of a real commuter economy that uses taxi ranks and converts them into mini-business and commercial districts; the integration of unused land, abandoned buildings and forgotten industrial estates into township value chains to turbo-charge the economic growth of the GCR; and the creation of a new economic geography through the township enterprise zones.

“This Township Economic Development Bill is a game-changer that should be supported since it facilitates a multi-dimensional way for the Gauteng provincial government (GPG) to change how townships are regulated and governed so that they become areas of employment-creating commercial activity.

“It is a progressive Bill to set up better procurement rules that allow government and contractors to buy from large groups of township-based firms. It is a progressive Bill to deploy a dedicated financing mechanism to establish a Small and Medium Enterprises Fund to provide wholesale and blended finance to intermediaries that can de-risk lending to township-based firms,” the GDED says.

It also urged the private sector to join it in implementing a Growing Gauteng Together 2030 plan of action, now enabled by this Bill, to link township investment facilitation to value-chain transformation and small, medium-sized and microenterprise (SMME) empowerment through active enterprise development and supplier development.

Moreover, it urged the private sector to partner with government to develop the commuter taxi economy; and to explore and maximise opportunities in the backyard shacks economy.

The department also welcomed the Bill as a legislative and programmatic policy mechanism to create an economic geography for mushrooming the township enterprise zones.

It points out that, in these zones, there is space to implement “benefit stacking”, which it explains means to stack in these zones all the accessible benefits for people and businesses such as funding, procurement, better by-laws, tax breaks and dedicated programmes.

The department indicates that the by-laws enabled by this Bill also make it easier to incentivise the installation of broadband in township enterprise zones and empower township-based Internet service providers.

It also highlights that the Bill enables the Township Economy Partnership Fund to become legally-binding for all future Gauteng governments, which presents policy certainty and legal continuity to support SMMEs.

The Partnership Fund is an instrument to support SMMEs through blending government money with private sector money, working with smart platforms or intermediaries to run portfolios of loans to SMMEs operating in the township economy, the department explains.

“As the GPG, once again, we welcome the passing of the Township Economic Development Bill as indeed a new deal and legal mechanism to rebuild back better township economies in this post-pandemic trajectory,” it states.