The signing of the Township Economy Development Act into law by Gauteng Premier David Makhura has been hailed by the province as a breakthrough in the development of its township economy. The Act is aimed at addressing the legacy apartheid left on Gauteng’s townships and is meant to open up new procurement and market opportunities for township businesses According to Gauteng Economic Development MEC Parks Tau, other provinces have been inspired by the law and were looking at developing their own legislation to boost townships.
“I do think that there is an appetite by other provinces to develop similar legislation, and ensure dedicated and focused attention in those areas that historically were marginalised,” he told Vutivi News. The MEC said that the aim of the Act was to ensure development.
“It is particularly designed to ensure that we can achieve redress from the impact of apartheid policies on black people and black townships in Gauteng, and this redress is achieved through the set of interventions that the Act directs should be made,” Tau said. “The first (of these interventions) is access to funding, which directs that we should create a financing facility for township-based enterprises.
“It (also) directs us that we should set regulations for township enterprise zones and that we should designate township enterprise zones.” Asked if the Act would regulate trade between SMMEs owned by locals and their foreign counterparts as many township businesses relied on foreigners to distribute their products, Tau said the law was not aimed at this. “We are saying that the Act is deliberately designed as a means of redress so that the Act directs that it should be implemented for those that have been historically disadvantaged in townships,” he said.
Tau also said that 40% of the Gauteng government’s procurement should be directed toward township-based enterprises. “This is a significant shift in terms of direct procurement by us as the provincial government, and of course, our obligation is to ensure that not only do we procure from these enterprises, but we ensure that we provide them with the requisite business support, and the law directs that we should in fact be able to do that,” he said. The MEC said the Act would also help deal with the issue of red tape, which often obstructed township businesses from accessing markets and procurement opportunities.
“We did a study that determined that about 90% of enterprises that operate from historically-black townships do not have a business account, and the majority of these are not registered as business enterprises, even though they trade and employ people,” he told Vutivi News. “Part of the intervention of this law is that we create a lower run of compliance so that these businesses can be registered on a database, and therefore be able to gain access to the support systems that we will put in place.
“These support systems will include enterprise development, and ensuring that those that are suppliers to us as government receives direct support from the provincial government.” The township economy has been earmarked by the state as key to helping rebuild the country’s sluggish economy.