Township Economy 2023 by SundayTimesZA

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THE

TOWNSHIP ECOnomy 2023

INVESTING IN TOWNSHIP BUSINESS

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THE

TOWNSHIP ECONOMY

PUBLISHED BY

Picasso Headline, A proud division of Arena Holdings (Pty) Ltd, Hill on Empire, 16 Empire Road (cnr Hillside Road), Parktown, Johannesburg, 2193

CONTENTS 38

PO Box 12500, Mill Street, Cape Town, 8010 www.businessmediamags.co.za EDITORIAL Content Manager: Raina Julies rainaj@picasso.co.za Contributors: GG Alcock, Dr Andrew Charman, Dineo Faku, Ryland Fisher, Duma Gqubule, Raina Julies, Vukani Magubane, Lesiba Matladi, Naledzani Mosomane, Mongezi Mtati, Glenda Neville, Gloria Tapon-Njamo, Brendon Petersen, Lindsey Schutters, Roelof Van den Berg, Happy Zondi Copy Editor: Brenda Bryden Content Co-ordinator: Natasha Maneveldt Digital Editor: Stacey Visser vissers@businessmediamags.co.za

PRODUCTION Production Editor: Shamiela Brenner Advertising Co-ordinator: Johan Labuschagne Subscriptions and Distribution: Fatima Dramat fatimad@picasso.co.za

PLANNING FOR OVERURBANISATION Within the next couple of decades, many large cities may not be able to sustain South Africa’s growing population.

SUPPORTING SMMES Partnering with the public sector to develop and sustain small businesses.

TAVERNS OF THE FUTURE Creating innovative safe social places for networking.

THE TAXI INDUSTRY The mini-bus taxi industry is perfectly positioned for digital innovations.

DESIGN Head of Design: Jayne Macé-Ferguson Senior Designer: Mfundo Archie Ndzo Junior Designer: Bulelwa Sotashe Cover Image: istock.com/ kckate16 SALES Project Manager: Tarin-Lee Watts wattst@picasso.co.za +27 87 379 7119 I +27 79 504 7729

TRANSFORMING TOWNSHIPS New thinking around township economies to mitigate the challenges of urbanisation.

ENTREPRENEURSHIP We chat with a few entrepreneurs about their small business journey.

RESEARCH FINDINGS

KASINOMIC REVOLUTION An extract from GG Alcock’s 2023 book, Born White Zulu Bred, A Memoir of a Third World Child.

MANAGEMENT Management Accountant: Deidre Musha Business Manager: Lodewyk van der Walt General Manager, Magazines: Jocelyne Bayer

SUPPORTING SMALL BUSINESS

DIGITISATION OPPORTUNITIES Education is key to harnessing technology to assist the informal economy.

FINANCIAL INCLUSION Why access to affordable financial products and services are critical for growth.

DEVELOPMENT FINANCE Procurement opportunities are key: frameworks around the spending of public money for goods and services need to be relooked if we are to unlock the potential of township economies.

COLLABORATION AND PARTNERSHIPS Aspiring entrepreneurs need the support of big business to develop sustainable operations.

Understanding the economic dynamics of townships will help harness the financial potential.

MARKETING LOCALISATION Outdoor advertising resonates in hyper-local markets and presents economic opportunities for developing small businesses.

Offering financial solutions to informal business has a ripple impact on our economy.

Images: Supplied

COPYRIGHT: No portion of this magazine may be reproduced in any form without written consent of the publisher. The publisher is not responsible for unsolicited material. Township Economy is published by Picasso Headline. The opinions expressed are not necessarily those of Picasso Headline. All advertisements/advertorials have been paid for and therefore do not carry any endorsement by the publisher.

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BUILDING AN INCLUSIVE ECONOMY Unpacking the Gauteng provincial government’s township revitalisation strategy.

THE IMPACT OF LOAD SHEDDING How electricity interruption is slowing down production and impacting job losses.

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EDI T ORI A L COMMEN TA RY

IT’S MORE THAN JUST THE SPAZA SHOP The township economy is a vibrant mixed bag of opportunities for all. GG Alcock sums it up perfectly on page 18, where we share an extract of his recent book, Born White Zulu Bred, A Memoir of a Third World Child, that says: “Most people think of the township or informal economy as rows of hawkers, their wares laid out on cardboard carpets on pavements or rickety tables crammed cheek by jowl on the peripheries of taxi ranks. Or they think of spaza shops, little holes in the wall or backyard corrugated iron structures, their dark insides filled with daily necessities, small sachets and outdated foodstuffs. They don’t think of Nomhle, who has converted the yard of her inherited four-room house and built a two-storey block of six backrooms that she rents out at R2 000 per room. Or Mbali, who has three roadside Chicken Dust outlets – literally a row of braai drums under a colouful stretch fabric tent, and sells more than a thousand grilled chickens a week, buying them for R40 and selling them along with a salad and maize meal pap for R110.” These small businesses may not yet account for the revenues of big corporates, but the collective impact they already have on the economy and the potential for increased opportunities means we can no longer ignore them. Raina Julies

DID YOU KNOW?

Minibus taxis use two to three billion litres of fuel per year, with an average fuel spend of R40-billion in the 2022 financial year. Turn to page 40.

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20 – 21 June 2023 Conference and Expo

Emperors Palace, City of Ekurhuleni Gauteng, South Africa

Join us at the most exciting event for Township Entrepreneurs

The aim of the event will be to serve as a catalyst for enterprise development aiding the growth and development of Township Economies to deliver more jobs, business growth and economic activity. By understanding the challenges of entrepreneurs and providing them with the tools they need to overcome these obstacles, we can enable them to ﬂourish and grow their businesses, thereby strengthening our economy as a whole.

The inaugural Township Economies conference and expo is a one-stop destination for Township entrepreneurs!

THE OBJECTIVES OF THE EVENT The event will explore support services to the informal market sector to assist and grow their businesses, which will include:

Access to finance: asset finance and insurance, credit and transactional facilities Skills development and knowledge sharing Providing supportive mentorship Access to markets to sell manufactured products and / or services

The inaugural Township Economies Event will be hosted at Emperors Palace

• BECOME A PARTNER/SPONSOR

• EXHIBIT YOUR PRODUCTS AND SERVICES • VISIT THE EXHIBITION AND NETWORK

18 – 20 JUNE 2023 GALLAGHER CONVENTION CENTRE JOHANNESBURG, SOUTH AFRICA

Accelerating the food and beverage retail business in Africa

WHY SHOULD YOU ATTEND? Expand your mind, business and upskill with our technical food and beverage workshops

Access to Africa’s longest running multi-sector trade show, SAITEX

Exclusive Chef Demonstrations

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National Burgers Challenge

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Organised by:

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SA Bakers Challenge

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LIVE FEATURES AND COMPETITIONS

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Find the latest products and cutting-edge technologies under one roof, meet with over 250+ exhibitors

3 days of networking with like-minded peers and business partners in the food and beverage value-chain

A F RICA BIG 7 A DV ER T ORI A L

SHOWCASING THE BEST IN FOOD AND BEVERAGE INNOVATIONS Registration for Africa’s Big 7 in June is now open. Come and connect with buyers from around the globe

Images: Supplied

he local food and beverage market is seeing healthy investment activity with new manufacturing plants opening to popular brands expanding onshore, as reported by FoodBev Media. Recognising the potential of this market and further across the continent, significant prospects await at Africa’s Big 7. “As we celebrate our 20th edition, Africa’s Big 7 remains committed to delivering excellent and reasonably priced, on-trend food and beverages, uniting top players in the industry and promoting growth,” says Evan Schiff, portfolio director: food, hospitality and trade at dmg events. Africa’s Big 7 takes place 18–20 June 2023 at Gallagher Convention Centre in Johannesburg, South Africa, co-located with SAITEX. It will present opportunities for visitors to network and tap into local and global trade networks. A key focus is on the future of sustainable food production. Trends in the African food and beverage market take centre stage as the continent’s rich food culture draws culinary businesses, influencers and tourists seeking unique gastronomic experiences. A large variety of delicious cuisine and beverages, packed with fresh tastes and innovative designs will be on display as entrepreneurs embrace sustainable food processing and packaging technologies to meet growing customer demand. The show’s line-up encompasses the entire retail-ready food and beverage sector and includes free-to-attend seminars covering the latest news impacting the sector. The returning SA Bakers Challenge will roll out a smorgasbord of professional and amateur bakers, and there

is a chance to be named the best chef in the second National Burger Challenge.

BENEFICIAL FOR TOWNSHIP BUSINESSES More than half of South Africa’s population resides in the township economy, and among the show’s objectives is to directly foster the growth of township businesses by facilitating access to quality goods in partnership with dmg events’ food, beverage and trade offerings, SAITEX and key stakeholders. “Africa’s Big 7 enables access to the township economy and allows township business buyers to source quality products at the best value, directly facilitating township business growth,” says Schiff.

CELEBRATING INSPIRING WORK A call to enter the inaugural Innovation Awards is currently running. Entries will be considered by an expert judging panel across a variety of product categories, from groceries to green packaging, innovation and best in show. “The awards will celebrate inspiring work in this first-ever event to gather and recognise the top, most innovative products,” Schiff says. Africa’s Big 7 advisory board comprises esteemed industry professionals working towards enhancing the sector. Among them are the Malaysian trade commissioner Har Man Ahmad, founder and managing director of Innovatr Richard Lawrence, consultant Kiba Bam, commercial director of Yebo Fresh Lerato Ramollo, and Pick n Pay’s head of product and quality Nicki Russell. Attending the show will benefit a variety of industry players, from food and beverage

About dmg events – South Africa dmg events is a leading organiser of face-to-face events and a publisher of trade magazines. The company aims to keep businesses informed and connect them with relevant communities to create vibrant marketplaces and accelerate their business through face-to-face events. dmg events organises more than 80 events across 25 countries, attracting over 425 000 attendees and delegates every year. The company’s portfolio of products includes many industry-leading events in the energy, construction, hospitality and design, coatings, and transportation sectors. ADIPEC, The Big 5, Gastech, EGYPS, The Hotel Show and INDEX are the company’s flagship events.

manufacturers to managers, packing and product managers, purchasing professionals, restaurateurs, chefs, the C-suite, and more. “Africa’s Big 7 brings quality, fresh and affordable food and beverage products from around the world to Africa’s doorstep. We look forward to welcoming visitors to the event, where a special announcement is also on the agenda,” Schiff concludes.

Scan this QR code to go directly to the Africa’s Big 7 website.

For more information: Register online for free exhibition entry: www.africabig7.com

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SOUTH AFRICAN TOWNSHIPS ARE ECONOMIC POWERHOUSES Understanding the spending habits, shopper preferences and economic dynamics of township residents will help to harness the billions of rands these vibrant communities represent. By MONGEZI MTATI, senior brand strategist, Rogerwilco

any South African businesses are not harnessing the potential of South Africa’s township economies. They are home to nearly 12 million people and, despite facing numerous challenges, including high unemployment, poor service delivery and low household income, South African townships possess immense spending power, representing billions of rands. How do brands and marketers access these markets, if at all? Understanding township spending habits, shopper preferences and economic dynamics is crucial for unlocking their potential. And that potential lies partially in the deep-rooted community support for one’s own – a neighbour or friend. Loyalty for local is growing across townships, from where people shop to what Mongezi Mtati they buy.

LOCAL IS LEKKER, BUT MUST ADD VALUE But local is only really lekker if it can be trusted by shoppers, which comes down to offering real value, an essential factor for shoppers with a tight budget. While trust relates to consumers’ confidence in a brand’s ability to deliver on a promise, value refers to the perceived worth or usefulness of a product or service relative to its price. In the township economy, where price sensitivity is high, value often holds greater significance than brand affinity. Spaza shops, of which there are approximately 200 000 in South Africa, continue to play a vital role in meeting the daily needs of township residents. Last year’s Township CX Report (customer experience), produced by Rogerwilco in conjunction with market research company Survey54, showed an 11 per cent increase in respondents shopping at spazas, as opposed to established retailers, compared to the previous year. In 2023, the third edition of this research, 51 per cent of respondents reported shopping at spaza shops daily. The convenience, affordability, and familiarity of spaza shops make them the go-to option for everyday purchases.

In comparison, supermarkets only garner 28 per cent of daily shoppers, with 48 per cent of respondents saying they shop once a week at supermarkets and 18 per cent saying they do so once a month. More and more, both trust and value are being created by spaza owners who consistently work to meet the needs of their customers – whether by repackaged products outside of their original sizes to make them more affordable, offering a weigh-and-pay option or even buy-now-pay-later solutions for regular customers. The desire to support local goes beyond the daily shop. Township-based delivery services are also seeing a rise in traction by users, with residents embracing online shopping. Delivery giants, such as Uber Eats, Checkers Sixty60 and Mr D, dominate the market nationally, but we are seeing the emergence of local platforms such as eKasi delivery and Hammanskraal-based Delivery Ka Speed, especially where more prominent brands are not equipped or able due to mapping issues, for example, to provide services in the township. Other local platforms, such as Zulzi and YeboFresh, are catering specifically to the needs of township residents to add that value the consumer craves. Zulzi has expanded its offerings beyond groceries to include pharmaceuticals and instant loan options. YeboFresh now also

TOWNSHIP ECONOMY

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RESE A RCH

demonstrating their willingness to spend the necessary money to own their preferred local fashion choices.

INCREASED DEMAND FOR AND USE OF DIGITAL TECHNOLOGY Digitalisation isn’t only fuelling township spending, but also boosting income. The internet empowers township residents by offering access to education, information and income-generating opportunities, with over 60 per cent of respondents, or people they know, using the internet to sell products, offer services or work online. Among the self-employed (70 per cent) and students (67 per cent), internet connectivity was most commonly used for earning money. Surprisingly, even among the unemployed, 57 per cent were involved in online hustles or knew someone who was. Companies, such as Vumatel and isizwe.com are playing a role in bringing affordable and high-speed internet to townships. Initiatives, such as Isizwe’s Kayamandi Fibre Project, have connected nearly 1 000 households to fibre internet for just R5 a day. If more telcos would innovate like this, we could see townships becoming economic powerhouses internally and nationally.

AN ENABLING ENVIRONMENT TO PROMOTE ECONOMIC GROWTH AND ADDRESS UNEMPLOYMENT

Images: Supplied

Recognising the potential of townships and their residents and fostering their development is crucial. By investing in infrastructure, improving service delivery and supporting local businesses, we can unlock the untapped potential of these communities. Policymakers, entrepreneurs and investors should work together to create an enabling environment that promotes economic growth, job creation and sustainable development within South African townships. By investing in local brands, supporting entrepreneurship and addressing the unique needs of township communities, we can drive sustainable growth, uplift lives, and create a brighter future for all South Africans. It is time to recognise and embrace South African townships’ immense economic potential.

serves spazas and community organisations by offering bulk-buying power and convenient order placement via WhatsApp. These platforms are reshaping the dynamics of local township delivery and addressing the unique challenges these communities face while introducing competition to more established players in the online delivery market. Where we are seeing local support for specific brands over value is in the strong preference for local fashion. The popularity of homegrown brands is on the rise among township consumers. Three-quarters of respondents in 2022 expressed a greater likelihood of buying local fashion brands if they were easily accessible on a store card at the stores they frequent. This year, we interrogated how much they actually spent on local fashion. Nearly 17 per cent of respondents told us they spent between R1 000 and R2 000 in the past year, with nearly 6 per cent spending over R3 000 on local fashion – a significant number if you consider annual salaries. Bathu, Drip and Amakipkip are among the top brands that resonate within township communities. The data suggests that local brands are perceived as premium, and township residents are not only expressing a desire for them, but also

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KASINOMIC REVOLUTION: AN ECONOMY EMERGING FROM THE SHADOWS GG ALCOCK shares an extract (edited) from his 2023 book, Born White Zulu Bred, A Memoir of a Third World Child

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t is called informal, but I call it kasinomics, the economy of the townships. Most people think of the township or informal economy as rows of hawkers, their wares laid out on cardboard carpets on pavements or rickety tables crammed cheek by jowl on the peripheries of taxi ranks. Or they think of spaza shops, little holes in the wall or backyard corrugated iron structures, their dark insides filled with daily necessities, small sachets and outdated foodstuffs. They don’t think of Nomhle, who has converted the yard of her inherited four-room house and built a two-storey block of six backrooms that she rents out at R2 000 per room. Or Mbali, who has three roadside Chicken Dust outlets – literally a row of braai drums under a colouful stretch fabric tent, and sells more than a thousand grilled chickens a week, buying them for R40 and selling them along with a salad and maize meal pap for R110. What about Justice who sources the chickens that Mbali grills, from a grower, along with bags of potatoes from the market, and 20-litre cooking oil drums and delivers them to Mbali in a few hours, whenever she sends her WhatsApp order? I know they don’t think of Refiloe and his container bakery that sells a few thousand loaves of bread a day, delivering them GG Alcock far and wide with a network of trolley delivery guys that get orders via WhatsApp with pin location delivery points. Or Dlamini, the kasi makhenika, who repairs, services and panel-beats taxis and private vehicles, sometimes at night to get the taxi back on the road by daylight, and who uses a workshop space provided free of charge by Toby’s Motor Spares shop, provided he uses Toby for all his spares and panels. Or maybe 24-year-old Moipone Mahlakwane, who started a small vetkoek business after she moved to Johannesburg from Limpopo and could not find a formal job. The business grew quickly. Today, she sells about 6 000 units per day at R1 each and employs a nanny to look after her kids and four people who make and deep fry her vetkoek. This total Kasinomic economy is not just spazas, hawkers and shisanyamas, it’s a multisectoral sector, which mirrors every sector in the formal sector, just trading differently, intimate to their consumers’ needs, desires and pain points. In this organic economy of vibrant resilient independent business people, these are just some of the sectors and their size. A R150-billion a year spaza, spazarette and wholesaler sector, selling primarily branded and packaged grocery items. This sector is dominated by foreign traders, mainly Ethiopian and Somali, who are seriously disrupting the formal retail sector.

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UNPACK ING K A SINOMIC S

LET’S FIND WAYS TO HELP THESE KASIPRENEURS, LET’S LEGISLATE APPROPRIATELY, LET’S FIND WAYS BANKS CAN FINANCE THEM SO THEY CAN GROW. KASI KOS AND LIQUOR OUTLETS Then there is kasi kos, delicious traditional or local kasi food bought as takeaways or eaten at street-side restaurants, caravans and gazebos. This kasi kos ranges from amaplati, to kotas, the burgers of the kasi. Then there are the meat kasi kos outlets, shisanyamas, grilled blade steak and boerewors on open fires, inhloko (cows head), mogodu (tripe), isibindi (ox liver) and skopo. Then there is chicken, from delicious grilled and spiced chicken dust and stewed hardbody chicken to maotwana, the feet of chickens. Kasi kos is a R90-billion a year, 50 000-outlet of the home or fast food sector. Over and above these kasi kos outlets are 45 000 licensed alcohol outlets, commonly called izipoti, amataveni, amajointi, pubs and shisanyamas, most often also serving the same food offerings. This sector is almost completely South African.

HAIR AND MUTHI Then there is beauty kasi stayela, mostly styled by 60 000 hair salons, ranging from dunusa, bare bum salons, to fancy diva salons. Hair extensions, braiding, relaxing and nails beautifully crafted by stylists that rent their styling station from salon owners. This hair sector turns over R10-billion a year in styling alone. Traditional African medicine, primarily plant-based, is represented through 10 000 so-called health shops, generally dispensing herbal remedies, traditional muthi shops and kasi chemists that sell everything from cheap and nasty libido offerings to premium medicines and packaged muthi products, part of an R18-billion a year herbal muthi sector.

TAXIS, REPAIR AND CAR WASH SERVICES

Images: Supplied

The informal public transport system is made up of the mini bus taxi sector, which covers 19 billion kilometres a year doing more than 15 million daily commuter trips. More than 250 000 taxis make up this R50-billion-a-year minibus taxi industry.

Working from the backyards of their homes, behind taxi ranks and sometimes on the streets outside formal spares shops, more than 80 000 kasi mechanics, panel-beaters and other auto repair services make up a sector servicing personal cars and taxis. The first business that unemployed township youths start is car washes. Every street corner has a car wash, even in rural areas, any bridge across a little stream has a car wash next to it. This car wash business is testament to the huge number of personal cars owned that need washing, panel-beating, servicing and repairing.

SPAZA TRADERS, HAWKERS AND RESIDENTIAL RENTALS South African homeowners earn more than R25-billion a year in informal business rental, renting their premises to foreign spaza traders for anything from R7 500 to R50 000 plus a month. Add to that another R20-billion in the booming backroom residential rental sector and you have a lot of passive incomes. Oh, did I mention half a million hawkers and tabletop traders selling everything from vegetables to airtime, cigarettes, rat poison, cosmetics, frozen lollies, second-hand clothing, counterfeit shoes and CDs, among other items. In 2010, in a book about the Warwick Street market, nongovernmental organisation Asiye eTafuleni reported that just the 120 to 140 boiled mielie sellers in that market sold 26 to 28 tons of boiled mealies a day in Durban’s inner-city streets, making a gross turnover of over R1-million a week. Just one market and just mielies!

cases, disrupting and challenging the formal economy. And they are earning incomes at an equally massive scale.

ECONOMIC OPPORTUNITIES Creating more interconnectivity between the formal and informal sectors presents a real and accessible opportunity to transform the battered South African economy. There are massive opportunities to engage profitably with the informal sector, but on terms that are reciprocal and enabling. It is also not about creating entrepreneurs or creating jobs. There are already hundreds of thousands of businesses and entrepreneurs in the townships, and they are already creating jobs. The questions we need to answer are: how do we support them, how do we connect them to the formal economy and how do we create models of hybrid formality with parts formal and other informal that help them grow? I believe all future formal economic activity will be entwined with the informal sector. Because we need one another to build a better future in this country. Instead of wringing our hands and fretting about formal unemployment figures, let’s find ways to help these Kasipreneurs, let’s legislate appropriately, let’s find ways banks can finance them so they can grow. I believe we should not formalise these businesses, we need hybrid business models where formal business systems and informal ones can operate side by side.

DIVERSE MULTISECTORAL ENTREPRENEURS How many bakeries, internet cafes, tailors, builders, steel workers, carpenters, plumbers, renovators, furniture upholstery renovators, furniture traders, tent, chair and mobile toilet renters, caterers, creches, money lenders, car washes, bakkie delivery drivers, waste collectors and recyclers, rural goat breeders, vegetable growers, beer brewers, and so on and so on are there? There are thousands and thousands of diverse multisectoral Kasinomic entrepreneurs. This is where the Kasinomic Revolution is happening and, in many

THIS TOTAL KASINOMIC ECONOMY IS NOT JUST SPAZAS, HAWKERS AND SHISANYAMAS, IT’S A MULTISECTORAL SECTOR, WHICH MIRRORS EVERY SECTOR IN THE FORMAL SECTOR, JUST TRADING DIFFERENTLY. TOWNSHIP ECONOMY

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A DV ER T ORI A L MULT ICHOICE GROUP

MULTICHOICE GROUP - ENRICHING LIVES THROUGH JOB CREATION The MultiChoice Innovation Fund assists small businesses in various ways, including funding, access to tools and skills and mentorship

HELPING SMALL BUSINESSES TO DO GREAT THINGS Here are some notable companies that are doing exciting things in their industries:

1. The Bubblegum Club: born as a cultural intelligence agency, it has grown into a digital publication and a content production studio. 2. Duma Collective: a creative communications agency serving some of the biggest companies in South Africa. 3. Mzansi Live: a pan-African independent multimedia management company that developed Mzansi2Cario, a broadcast media marketplace. 4. Swypa Deliveries: uses door-to-door scooters to deliver goods and services for township-based businesses for orders placed through their app. 5. The Plug: an online publication focusing on all aspects of urban culture. 6. The Throne: a boutique agency specialising in influencer marketing, social media strategy and talent management, and the home of The Throne Magazine. 7. Whoosh: a payment solutions provider based in Tshwane. 8. Yellow Bone: a film and television production company focusing on bringing authentic South African content to international markets. The MultiChoice Innovation Fund focuses on innovative predominantly black- and womenowned businesses in South Africa, as well as small businesses owned by youth. The fund currently supports over 350 permanent jobs. This much-needed investment has helped entrepreneurs to hone their skills in management, legal and compliance, finance and business development, but, more importantly, the fund encourages growth, innovation and competition in industry.

The MultiChoice Innovation Fund enables entrepreneurs on the verge of leading new trends to become leading players in their industries.

Scan this QR code to go directly to the Multichoice Group website.

For more information: www.multichoice.com

Images: Supplied

s a leading entertainment company, MultiChoice believes that small and medium enterprises are the lifeblood of our country, which is why it is committed to uplifting, supporting and investing in the communities where it operates by making a tangible contribution to the development and growth of businesses in these communities. The MultiChoice Innovation Fund (MIF) is one way in which the company has been supporting a range of businesses within its industry since 2012 – creating opportunities for innovators in the tech, media and film industries, bringing to life ideas that have led to breakthrough moments for their businesses. This support has been in the form of funding, ongoing business support and mentorship, and skills development for start-ups and established SMMEs. The fund creates real opportunities for entrepreneurs to gain access to clients. The Innovation Fund was developed to stimulate South Africa’s entrepreneurs by giving them access to the tools, skills and financial support that will enable them to bring their unique, innovative and exciting business ideas to life. To date, the fund has supported 79 businesses to enable them to accelerate their future plans. Adding to the existing beneficiaries, these businesses operate in food delivery, online payments, digital marketing and innovative content creation in the publishing and film production industries.

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PROCUREMENT OPPORTUNITIES ARE KEY

ganki Matabane, CEO of the Black Business Council (BBC), a lobby group for the transformation of the South African economy, has called on the government to procure goods and services from township economies to help them grow. Matabane says local and provincial governments must set aside a percentage of their procurement spend exclusively for township businesses if township economies are to grow. “What stops the government from giving all their RDP houses material supply, such as bricks, sand and window frames, exclusively to the township enterprises?” asks Matabane. He says these contracts should be 20 years to enable these Kganki Matabane enterprises to use the contracts as leverage to obtain discounts when buying their materials and also to raise funds from funding institutions. “It is very difficult to raise relatively cheap funding or even employ skilled and experienced labour with a three-year contract as it creates instability. Once that is done, the government should pay these enterprises on time, or even better, pay them upfront,” he says. Matabane adds that these measures will enable these enterprises to grow into sustainable medium to big businesses that can start doing business with other companies in the private sector and broader continent. “If the government adopts these interventions, the private sector will follow suit, but if the private sector sees that the government is indecisive (as is currently happening), they will do nothing,” he says.

“EXTENDING PROCUREMENT OPPORTUNITIES TO TOWNSHIP ENTREPRENEURS IS KEY FOR CREATING AN INCLUSIVE ECONOMY.” – BULELANI BALABALA POLITICAL WILL AND COMMITMENT NEEDED Matabane further offers that South Africa needs a strong and decisive political will to help develop and support township entrepreneurs. Hairdressers, spaza shops, street trading and taverns are among the main businesses in township economies that can create more jobs with government intervention. Bulelani Balabala, founder of the Township Entrepreneurs Alliance, which focuses on empowering township businesses, says extending procurement opportunities to township entrepreneurs is key for creating an inclusive economy. “These opportunities are not handouts but procurement opportunities. Give them a fair opportunity to bid for services at a large scale and watch them flourish,” says Balabala. Balabala adds that procurement opportunities need to be linked to mentorship or guidance programmes to ensure township entrepreneurs deliver to the specifications of their customers. “This will create more risk appetite for the likes of the Small Enterprise Finance Agency, Department of Trade and Industry and different financial development institutions. The bigger their risk appetite, the more they can fund the business and help them create the required employment,” he says. Gauteng premier Panyaza Lesufi said in February the province has committed to using 60 per cent of the R34-billion goods and services budget to support township initiatives. Lesufi said Gauteng is establishing a township business register of all businesses in the township.

“We are told that the reason our spaza shops are struggling is because they don’t have a collective buying power. We have now finalised a financing model to allow township businesses to have their own bulk buying mechanism through the establishment of township-based warehouses and distribution centres,” Lesufi said. Lesufi’s spokesperson, Vuyo Mhaga, said the province has identified 20 000 spaza shops in Gauteng to benefit from procurement initiatives. “We have set aside R100-million to help township spaza shops with bulk buying opportunities,” he said.

BUY LOCAL National African Federated Chamber of Commerce and Industry (Nafcoc) president Gilbert Mosena says the influx of counterfeit products was a threat to township economies. “The biggest major constraints to township business are the consumer’s appetite for foreign or imported goods and lack or little support for locally made products. Big capital also takes advantage of townships and puts up mini convenient retail chain stores almost like the spaza Gilbert Mosena shops that black townships are famous for,” he says. The City of Cape Town’s mayoral committee member for economic growth, Alderman James Vos, says the City implements numerous economic development interventions to support local businesses, including a supply chain management policy that supports local production through specified levels of local content for designated sectors and subsectors. Vos says the city was also supporting incubation programmes for wood-based products in Delft, Belhar and Nyanga. “Through participation in a National Treasury programme, the city has developed a township economic development strategy and is partnering with local organisations to implement eight projects aimed at supporting township economies,” says Vos.

Images: Supplied

Frameworks around the spending of public money for goods and services need to be relooked if we are to unlock the potential of township economies. By DINEO FAKU

Bulelani Balabala

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COMMITTED TO EXPANDING TOWNSHIP BUSINESS Absa is committed to empowering the township economy, which is home to almost six million informal businesses, writes DINEO FAKU

Images: istock.cm/ PeopleImages, Supplied

Images: Supplied

engaged in finding solutions to he township economy is empower these communities,” the lifeblood for thousands he says. of families lacking a formally To address the needs of employed breadwinner. township economies, Absa is It is dominated by informal co-ordinating internal initiatives businesses, including spaza shops, and propositions across bakeries, hawkers, minibus taxi its group of businesses to operators, hair salons and solve the challenges facing panel-beaters. these economies, while Ronnie Mbatsane, the managing Ronnie Mbatsane driving growth and making a executive for SME Business, Absa meaningful societal impact. Relationship Banking, shares that Absa’s commitment, Mbatsane says, to the while the exact size of the township economy township economy comes as South Africa remains uncertain, estimates suggest there are grapples with elevated levels of unemployment, about 5.7 million informal businesses in operation. especially among the youth. “These businesses play a significant role in the local economy and Absa recognises the importance of supporting their growth. By offering UNLOCKING EMPLOYMENT OPPORTUNITIES responsible financial services, Absa not only The latest Statistics South Africa Quarterly Labour supports the expansion of these businesses, but Force Survey (QLFS) painted a bleak picture of the also improves the daily lives of individuals within unemployment rate, which rose to 32.9 per cent township communities,” he says. in the March 2023 quarter from 32.7 per cent a Mbatsane adds that the ongoing digitisation of quarter earlier. The unemployment rate, according cash and the adoption of digital payment methods to the expanded definition, was 42.4 per cent in in South Africa are important considerations for March 2023, while joblessness among the youth financial services in the township economy. “By was at a staggering 62.1 per cent. providing relevant financial services, Absa aims CEO of the National Youth Development Agency to influence and change behaviours, enhance (NYDA) Waseem Carrim, says it is important to financial literacy and contribute to the growth of consider unemployment within the context of the businesses within the township economy.” As a purpose-led pan-African bank, Absa is committed to unlocking the continent’s potential and acting as a catalyst for positive change. “Recognising the historically underserved nature of township economies, Absa is actively

pandemic. He has been quoted as saying that of the 2.3 million jobs lost during the pandemic, approximately 2 million of those jobs have returned. “South Africa is recovering lost jobs but not creating new ones. In quarter 1 of each year, unemployment is expected to spike as school leavers enter the labour market and therefore there is an expected uptick in Waseem Carrim unemployment. The unemployment figures, while terrifying, will continue to get worse if the structural factors affecting new job creation are not addressed,” he said. Carrim asserts that over its twelve-year history, the NYDA has supported 250 000 young people with access to business development support interventions, including skills development programmes, market linkages support and mentorship. “The NYDA has also supported 20 000 youth-owned enterprises with direct financial support to start and scale their businesses through its grant programme. More than 70 per cent of those supported are in townships and rural areas, according to Carrim. The Presidential Youth Employment Intervention (PYEI) is focused on township and rural economies and aims to unlock employment potential in vulnerable communities. “This includes more support to young people that want to create work for themselves and others,” Carrim explains. The NYDA acts as a complementary agent to other government services provided to the Department of Small Business Development, which includes the Small Enterprise Finance Agency (SEFA) and Small Enterprise Development Agency (SEDA), understanding the unique challenges that youth entrepreneurs face. However, funding is a challenge. SEFA CEO Mxolisi Matshamba said previously that risk-averse financial institutions were a major hurdle for small entrepreneurs, including the youth, wanting access to funding. “The financial viability of small businesses, especially those in the start-up phase, and the lack of collateral, particularly by the businesses owned by historically disadvantaged individuals. is a challenge,” Matshamba says. He adds that addressing the small, medium and micro enterprises funding gap requires a partnership between government and the banking sector to increase the supply of appropriate funding instruments, especially to businesses owned by women and youth in townships and rural economies.

“BY PROVIDING RELEVANT FINANCIAL SERVICES, ABSA AIMS TO INFLUENCE AND CHANGE BEHAVIOURS, ENHANCE FINANCIAL LITERACY AND CONTRIBUTE TO THE GROWTH OF BUSINESSES WITHIN THE TOWNSHIP ECONOMY.” – RONNIE MBATSANE TOWNSHIP ECONOMY

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BUILDING AN INCLUSIVE ECONOMY DUMA GQUBULE unpacks Gauteng’s township revitalisation strategy

ine years after it first launched a township economy revitalisation (TER) strategy, the Gauteng provincial government has a new law and updated strategy that could serve as a template for the roll out of similar initiatives in other provinces. Gauteng has hosted many delegations from all provinces that want to learn about its strategy. Some have developed their own township economy policies and strategies. From an economy and jobs war room in Johannesburg, Gauteng government officials are co-ordinating efforts to direct billions of rands of procurement and loans to township enterprises and development projects. They hope to create thousands of jobs. The Gauteng Township Economic Development Act, which the provincial legislature ratified on 29 April 2022, sets out regulatory and policy interventions to grow township economies and businesses. In his 2023 State of the Province Address, Gauteng premier Panyaza Lesufi said: “We are of the strong view that townships are our new gold. With new malls and filling stations rapidly going up in our townships, we must ensure that these investments benefit our people. As of 1 April, we will use 60 per cent Mathopane Masha of the R34-billion goods and services budget to support township initiatives.”

Mathopane Masha, Gauteng’s chief director for inclusive economy, says the province has already done an in-depth analysis of department procurement plans and matched them against commodities already purchased from township enterprises. Departments have received a circular explaining how they must report and that there will be quarterly monitoring of their performance against the target. “We have also developed mechanisms to cluster procurement and award contracts to multiple small township enterprises,” Masha explains. “The immediate focus is available spending, after excluding transversal contracts purchased centrally by National Treasury and long-term contracts. We are confident that we will achieve the target.”

JOINT VENTURE FUNDING PROJECT The province has established a Township Economy Partnership Fund (TEPF), which has mobilised almost R1-billion. It is a joint venture between the Gauteng Department of Economic Development, the Gauteng Enterprise Propeller, and the Industrial Development Corporation. In his 2023 budget speech, MEC for Finance Jacob Mamabolo said the province also planned to establish a state bank to increase access to finance for township enterprises and residents and support infrastructure development. “We have now completed the legal due diligence of the state-owned bank

and, in the 2023/2024 financial year, we will be moving ahead with plans to develop the business case for the bank,” he said. The province says its township economy interventions will create 180 000 jobs during the three years from 2023 to 2026. During the first quarter of 2023, there were 3.3 million unemployed people in Gauteng. In an interview, MEC for economic development Tasneem Tasheem Motara Motara said the province had provided funding of R250-million for the TEPF, following criticism from potential partners that it must show its commitment to the fund. With the support of a guarantee from the Gauteng Provincial Treasury, she said there was scope to mobilise more funding and match commitments from future partners if the TEPF exhausts its R1-billion war chest and demonstrates that it can make a meaningful impact. Gauteng will have to mobilise significantly more resources to shift the dial in its R2-trillion-plus economy and reduce the province’s unacceptably high unemployment rate of 39.6 per cent.

GAUTENG GOVERNMENT OFFICIALS ARE CO-ORDINATING EFFORTS TO DIRECT BILLIONS OF RANDS OF PROCUREMENT AND LOANS TO TOWNSHIP ENTERPRISES AND DEVELOPMENT PROJECTS.

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Images: istock.com/atosan, istock.com/Rich Townsend, istock.com/ poco_bw, Supplied

ZONING AND NODES OF ACTIVITY The new act provides for the designation of township enterprise zones, licensing of township-based enterprises, promotion and development of township enterprises, establishment of a township enterprise fund and a set of principles that must inform municipal bylaws. There are two types of zones. Township enterprise zones are at a regional scale and can include a group of bordering townships, a whole township or a significant portion of the township. Township enterprise precincts are at a neighbourhood scale and could include high streets, taxi ranks, retail strips or retail malls. In the township enterprise zones, the provincial government will stack benefits for entrepreneurs, including cutting red tape by introducing model standard bylaws and targeted tax incentives, funding and procurement opportunities. Masha says: “Under apartheid, townships were created as dormitories for labour. Our vision is to transform townships, where more than 70 per cent of the province’s population lives, into vibrant communities where people can live, work and play.” The plan is to change the face of three industries, taxis, property and retail, which account for the bulk of township enterprises. There will also be a roll out of enabling broadband infrastructure and the creation of township cloud zones. In Gauteng, according to SANTACO, there are 126 000 taxis. The industry employs 600 000 people directly and indirectly. Each year, it spends R51-billion on fuel, R7.2-billion on finance instalments and R2.4-billion on tyres. The province has established a R20-million fund to help associations raise more money. Masha says taxi ranks of the future will be nodes of economic activity, not just transit points, with owners participating throughout the industry value chain. Taxi associations and enterprises will own banks and insurance companies, fuel stations and depots, panel-beating operations, automotive repair shops and tyre companies. The ranks will be transformed into safe spaces with retail developments, including restaurants, where customers can shop on their way to and from work. They will participate in the broader transport and logistics value chain and bid for bus routes. Outside peak hours, they will participate in the ride-hailing industry and food delivery to township consumers. The province will enable this transition with updated regulations and bylaws that zoning overlays for rank development projects. In property, there are plans to develop high streets, micro central business districts (CBDs) and office parks and amend laws to allow rapid release of publicly owned land for township businesses. Masha says there is huge potential for infill residential projects to develop vacant land with housing projects. Infill projects can also refer to refurbishing existing homes or backroom properties so that owners can maximise rentals from accommodation and retail establishments. The new act will create a legal framework for

“OUR VISION IS TO TRANSFORM TOWNSHIPS, WHERE MORE THAN 70 PER CENT OF THE PROVINCE’S POPULATION LIVES, INTO VIBRANT COMMUNITIES WHERE PEOPLE CAN LIVE, WORK AND PLAY.” – MATHOPANE MASHA backyard real estate upgrades by introducing double-storey permits so that people can earn more rental income. The province has already validated 2 000 funding loans for aboMastandi (township landlords) and approved 40 loans worth R50-million.

MANUFACTURING TO GET A BOOST Masha says Gauteng will use the growth of township retail to stimulate local manufacturing production. The province has targeted 200 consumer products produced in townships and selected companies to be supported to expand production. It has partnered with Family Tree Holdings, which is working with 22 township chambers representing 20 000 small and medium enterprises (SMEs). It has finalised a bulk buying mechanism for SMEs through the establishment of township-based warehouses and distribution centres, such as the ones already launched in Katlehong and Mamelodi. It has developed manufacturing and industrial clusters linked to 22 of the most-purchased products. The Kasi Umnotho programme has identified 15 000 township retailers to receive support, including the refurbishment of stores.

increase rebates and other incentives for township entrepreneurs to invest in alternative energy sources. “The existing rebate of up to R15 000 does not go very far. The province is also looking at what it can do directly to address the crisis. For example, we can install solar in our facilities and invest in new generation capacity together with municipalities.” In her previous job as Infrastructure MEC, she witnessed construction mafias demanding a share of projects. “The private sector must call the police and not agree to extortion by criminals. Addressing crime is the top priority for this administration. In the recent budget, we announced a large increase in spending on people, cars, helicopters and drones to fight crime. There is also a programme to help township entrepreneurs reduce the use of cash. We must not normalise this state of lawlessness.”

OBSTACLES TO OVERCOME Two major impediments to the development of township entrepreneurs are the energy crisis and crime. Motara says National Treasury must

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COLLABORATION IS KEY TO KASI ECONOMY SURVIVAL Township small businesses face even greater challenges than most when dealing with the business impact of load shedding, but by working together, they can mitigate its consequences. By RODNEY WEIDEMANN

Karabo Mamabolo

impact, for instance, perishable stock that is lost because the refrigerators have no power or township-native businesses, such as taverns and shebeens, having to compromise the quality of the product they sell due to extended periods of power interruptions. These unexpected challenges can lead to loss of clientele, resulting in permanent closure.

WAYS TO OVERCOME THE CHALLENGES “Resourcefulness and adaptability are necessary to overcome this crisis, something that township entrepreneurs have in abundance. SMEs in this economy must collaborate and help each other, for example, by forming a stokvel to save towards buying generators to keep businesses running. “Matte BLK is in the conceptual stages with an app for a kasi business directory to foster

“RESOURCEFULNESS AND ADAPTABILITY ARE NECESSARY TO OVERCOME THIS CRISIS, SOMETHING THAT TOWNSHIP ENTREPRENEURS HAVE IN ABUNDANCE.” – Karabo Mamabolo 32

Scan this QR code to go directly to the Matte BLK website.

For more information: 010 592 1841 info@matteblk.africa https://matteblk.africa/

Images: Supplied

mall businesses have long been the backbone of the South African economy, driving economic activity and creating jobs in the communities where they operate. However, with load shedding costing the country over R4-billion a day and most small and medium size enterprises (SMEs) highly reliant on electricity for operations, rolling blackouts force cuts in production time and drive up business operating costs, impacting profitability. The real challenge of load shedding, explains Karabo Mamabolo, through-the-line strategist at Matte BLK, an insights-led emerging markets consultancy, is its impact on the informal Kasi economy. “When considering the impacts on the informal market, we can see how it destroys township-based businesses, such as spaza shops, hair salons and taverns. Struggling businesses simply cannot afford to lose hours of work in a day, especially during peak periods. Moreover, their cash flow is always tight, and if they are not making regular sales, how are they meant to stay afloat? “Escalation in power cuts and frequent changes in load-shedding schedules introduce new complexities to an already distressed business environment for township entrepreneurs,” Mamabolo says. “The impact is exacerbated by productivity on a constant downturn, as operational disturbances lead to production halts, increased downtime and damaged equipment due to constant power surges.” Furthermore, notes Mamabolo, there is an increased threat of crime as lack of power impacts security measures, making businesses a target for criminals. In addition, the money spent on mitigating blackouts should be spent on growing these businesses. Worse still, many SMEs are so small that one unexpected challenge can have a massive

greater collaboration. I believe that because of our national background of Ubuntu and the inherent collectivist nature of townships, such a platform will bring entrepreneurs together and ensure that they unite to build the township economy more sustainably.” Mamabolo adds that finding ways to mitigate load shedding is key. This, he suggests, means figuring out how to maximise the amount of critical work done during load shedding and leveraging on complementary businesses to find appropriate strategies for production planning, scheduling and delivery to circumvent rising operational costs. Businesses eKasi need to adopt business models that are a more natural fit to their setting and leverage their resourcefulness to build alternative income streams. The township environment is complex and its consumers internally diverse – an opportune landscape to bring as many innovative solutions as possible. For instance, we work with clients in financial services, retail and FMCG to conduct research and deliver compelling campaigns that address emerging consumers’ needs more authentically. “We must evolve. Our business has seen the benefit of being agile to ever-changing business circumstances. For example, at Matte BLK, we own and operate a print production facility, which we have been contingent with in exploring various operational scenarios and investigating alternative affordable power sources for a small business. I am a firm believer that success will come not from competing as SMEs, but rather from collaborating to overcome blackout challenges. “It boils down to ensuring that you plan properly and effectively. I have no doubt load shedding will get worse before it gets better. In essence, this is the ‘new normal’ and for Kasi businesses to survive, a mindset change that focuses on collaboration rather than competition is the most feasible answer,” he concludes.

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ENERGY

THE IMPACT OF LOAD SHEDDING ON TOWNSHIP BUSINESS

Township businesses are labouring under the load of power outages, and many are not in a position to address the fallout, writes HAPPY ZONDI

Images: istock.com/EvgeniiAnd, Supplied

ver 60 per cent of township small businesses surveyed by Nedbank in a joint partnership with the Township Entrepreneurs Alliance (TEA) in February this year indicated that they were doing nothing to address the impact of load shedding on their businesses. In a country with an unsustainably high unemployment rate, poverty and income inequality, the survey revealed that 66 per cent of small businesses had shed jobs as a result of load shedding. Another study by the African Energy Chamber indicated that load shedding alone has cost South Africa over R4-billion daily. It further revealed that most small businesses were highly reliant on electricity for their operations. Therefore, mitigating the impact of frequent power outages was forcing them to invest in alternative solutions, despite reduced production levels, squeezed margins and reduced profitability, to stay in business. Some of the costs incurred Lizzy Mogale due to load shedding included investing in generators, with solar as the most preferred alternative in the township small business market. As the backbone of the economy, driving economic activity and being expected to continue creating jobs within their communities, small businesses have had to find alternate ways to continue operating.

The outcome was insightful and presented ideas for alternative solutions for township small businesses to become more resilient and continue as going concerns. Conducted across all nine provinces, 49 per cent of these businesses operate across multiple sectors in Gauteng. Female business owners made up 53 per cent of the participants, while 47 per cent were under the age of 35. Businesses ranged from those that have been operating for more than 10 years to newer entrants that started their businesses after the COVID-19 pandemic. Nedbank’s retail and business banking insights and advisory managing executive, Lizzy Mogale, says: “The sad reality is that, for a sector with such potential and expectation for growth, the impact on employment has also been significant. “In the food and beverages and manufacturing sectors, 83 per cent of businesses reduced their staff, in agriculture it was 76 per cent and 70 per cent in IT services. On average, only 29 per cent had no staff losses, while 5 per cent of these businesses were permanently closed,” says Mogale. However, she adds that the impact of load shedding on this sector went beyond simply the numbers, adding: “The compound effect of COVID-19 lockdowns, the July 2021 unrest, intensified load shedding and increasing water constraints were reported to be putting a strain on the mental wellbeing of business owners and their employees.”

THE REAL COST OF LOAD SHEDDING

“THE SAD REALITY IS THAT, FOR A SECTOR WITH SUCH POTENTIAL AND EXPECTATION FOR GROWTH, THE IMPACT ON EMPLOYMENT HAS ALSO BEEN SIGNIFICANT.” – LIZZY MOGALE

Against this backdrop, Nedbank and TEA undertook to gather the views of over 200 business owners. The survey aimed to look at the realities faced by these township businesses and identify tangible solutions for entrepreneurs.

THE NEXT STEPS For township small businesses with available cash resources to purchase alternative power solutions. • Do your research and only buy quality products from accredited suppliers. • Take your time and gradually invest in alternative solutions that meet your specific business needs. • Look into community-based sharing solutions, such as moving to shared office space equipped with a generator. • Evaluate your power-supply needs, which are unique to every business depending on specific size and industry. • Consider credit options, such as Nedbank’s solar finance offering. For township businesses with limited funds to purchase alternative power solutions. • Think creatively about how you restructure your business model; minimise unnecessary expenditure to limit waste and streamline production. • Plan around load shedding: leverage time management and plan business activities around load shedding. Perform tasks that do not need electricity, such as delivering goods to customers. • Talk to other business owners in the same industry to collaborate and innovate. Remember, you are not alone. Nedbank encourages all township small businesses to start small by investing in the minimum viable solution that works best for their specific business type and size. Where possible, small business owners should seek a solution that can grow as their business grows.

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Fulfilling our purpose Nedbank is driving growth in the township economy by offering inclusive and easily accessible banking services

he role financial services play in improving the standard of living for all members of society is essential. As such, Nedbank recognises the importance of providing solutions and services that help to improve society and better the lives of individuals and business. As a purpose-driven bank, we are committed to using our financial expertise to do good and, to deliver on this purpose, we leverage technology, build strategic partnerships and co-create inclusive solutions to support and empower individuals, communities and businesses across all sectors of South African society, including participants in the so-called township economy.

HELPING PEOPLE TO MANAGE MONEY BETTER At Nedbank, we believe that equipping consumers with the ability to make better money choices is a vital pillar on which a financially secure future rests. Education plays a vital role in our delivery on this commitment, and we offer an array of consumer education programmes designed to empower people and businesses with the skills, knowledge and ability they need to manage their finances well and make the right financial decisions to achieve the outcomes they desire. We also understand that different

We have invested time and resources into understanding the journeys, emotions and needs faced by people in townships. communities approach money differently. That’s why we have invested time and resources into understanding the journeys, emotions and needs faced by people townships, allowing us to respond appropriately with curated financial wellness programmes that directly address the requirements of local communities. Our diverse education delivery models are a testament to this carefully targeted approach that is aimed at making financial education more accessible to all. We have launched financial education initiatives via numerous channels and multiple mediums to suit a diverse cross-section of people and communities with varying needs and levels of financial literacy. These include face-to-face workshops hosted in our flagship township branches, sessions on local radio stations with respected community personalities, and a targeted social media strategy. To date, our financial education efforts have touched the lives of over 30 million people, equipping them with the knowledge and financial acumen they need to make better money choices and manage their finances effectively.

COMMUNITY TRANSFORMATION INITIATIVE Another way Nedbank is responding to the unique needs of the township economy is

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through a holistic community transformation initiative called Proud of My Town (POMT). POMT focuses on addressing the specific needs identified by various stakeholders in each town where the programme is run. Key challenges are identified and, through collective effort, these are addressed for the benefit of all community members. In 2022, Nedbank, through the POMT initiative, invested R10.5-million in various community-based programmes aimed at restoring the economic and social wellbeing of numerous towns across South Africa. POMT also supports local business through initiatives such as its Building Business Programme, which aims to enable localised economic development and inclusion for small and growing businesses from under-resourced areas. The Building Business Programme provides network- and market-building opportunities, business support, business training, financial education and enterprise development, funded by Nedbank’s Enterprise Development Fund.

DRIVING FINANCIAL INCLUSIVITY OF UNDERSERVED AND UNSERVED INDIVIDUALS At Nedbank, we recognise that inclusive banking is not only a moral imperative, but also the only way to build a more equitable financial system that benefits all individuals and communities. To this end, we offer a wide variety of solutions and touchpoints to make it easier for all South Africans to access and benefit from financial services. Our approach is to continuously innovate and provide financial services that are cost-effective, accessible and easy to use.

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Our transactional solutions include a payas-you-use account (PAYU) account that levies no monthly fees and clients only pay for the solutions and services they use. Our Mobimoney Wallet and Cellphone Banking make it easy for consumers to do financial transactions without the need for a smartphone or data. And the introduction of PayShap means clients can link their cellphone number to their bank account and use their ShapID to immediately deposit money.

FOSTERING A SAVING CULTURE To encourage clients to save towards their goals, Nedbank offers a variety of accessible and highly affordable savings options. MyPocket enables clients to start saving from as little as R1 with a free Nedbank multiple-savings pocket that’s linked to their Nedbank current account. Clients can create as many pockets as they need and earn interest on the money they place in up to 10 of their Nedbank MyPockets. There are no monthly fees for MyPocket, and no notice periods, so savers have immediate access to their money. The Nedbank Stokvel Account is also a very popular communal savings vehicle that optimises the growth potential of this widely used savings method through competitive interest rates and a variety of value adding benefits and enhanced security features. We also understand the importance of peace of mind, particularly when it comes to the financial wellbeing and security of loved ones Nedbank’s MyCover funeral plan offers trusted financial protection at the lowest price currently available on the market. Plans start from R30 per month for R10 000 cover or R90 per month for R30 000 cover for the family. We also recognise the importance and value of responsible credit and we offer a one-month loan to Nedbank clients with the option to repay it either 30 days after taking out the loan or on the day of their next salary payment. Our consolidation loan is another innovative credit solution designed to help indebted South Africans get on top of their credit. The loan allows clients to consolidate all their debt into a single credit facility with one interest rate and a single monthly repayment. Consolidation offers clients the convenience of dealing with one

We have extended our reach in many rural areas and small towns through partnerships with third parties, especially retailers. financial institution, and having a single debit order coming off their account monthly, making it easier for them to manage their obligations. Our debt counselling service also provides invaluable support for overindebted clients, helping them to overcome their debt challenges and get their finances back on a stable footing. We offer this service to clients that are declined when applying for lending products mainly because of affordability, missed payments or poor credit bureau assessments, and those struggling to honour their current monthly repayments. As the cost of living increases and family pressures continue to intensify, these debt support services are becoming increasingly important and valuable to a large number of people. In a further effort to drive inclusive lending, Nedbank provides access to loan facilities to the youth, people with no credit history, and others that have previously lacked access to loans. This includes enabling access to vital education funding and, over the past three years, we have funded more than 2 000 students to the value of R200-million through initiatives that include partnerships with educational institutions that enable our clients to pay for their education using a personal loan. In our affordable housing portfolio, have financed home purchases for 4 660 customers in this market at just under R2.8-billion enabling home ownership for many who would not otherwise have been able to achieve it. In 2022, we made solar energy funding available to all South Africans, even those who are not Nedbank clients. Our new assetbacked solar finance solution is available to anyone wanting to install a solar energy solution on their property, regardless of which institution holds their mortgage bond, or even if their property is unbonded. Our credit health tool, available on the Money app, shows clients their credit score and offers suggestions on how to improve their creditworthiness. The tool sources user information from South African credit bureaus and displays it in an easy-to-understand way. These facilities are available to anyone that logs in to the Money app, not only Nedbank clients.

With PayShap, clients are able to link their cellphone number to their bank account and use their ShapID to immediately deposit money.

INCLUSIVITY FOR SMALL, MEDIUM AND MICRO ENTERPRISES In South Africa, small, medium and micro enterprises (SMMEs) serve as powerful engines of economic growth and job creation and are key to the country’s post-pandemic economic recovery. SMMEs are also seen to be the main absorber for marginalised segments, such as women, youth and the poor, especially in township economies. As such, we view the support and enablement of SMMEs as both a business and moral imperative, and we have an array of services, solutions and support structures specifically aimed at driving the growth and sustainability of this vital business sector. The Nedbank Startup Bundle is a business account that offers six months of zero fees and 20 free digital transactions monthly. After the first six months, costs default to a business PAYU account, which costs R65 monthly. A fully digitised onboarding process using Online Banking or the Money app (for sole proprietors and proprietary limited companies with up to three directors, and South African nationals only) means that opening a Startup Bundle is quick and easy for most SMMEs.

FACILITATING EMPLOYMENT OPPORTUNITIES Nedbank is also helping addressing the issue of youth unemployment our involvement with the Youth Employment Service (YES) Programme and the provision of first-time employment opportunities to previously unemployed youth in South Africa. To date, we have placed more than 7 000 previously unemployed youth internally and through sponsored placements.

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A DV ER T ORI A L NEDBA NK

Nedbank GAP Access is an innovative and viable alternative to traditional business loans and facilities. It is available to businesses that accept card payments and works by advancing funds that are linked directly to card turnover through a POS device. The offering has helped to transform day-to-day business operations for many SMMEs by making it easy to access cash advances to support their working capital needs. In addition, the Nedbank Small Business Credit Card is an ideal card solution for start-ups. Credit assessment is based on the individual’s affordability, giving the business owner the opportunity to split business and personal spend and build up a credit history for the business. There are flexible payment options to improve cash flow and clients earn rewards on business spend. For growing or established businesses (minimum two years old) that are registered legal entities (with business financials) and have a minimum annual turnover of R1-million, there is the Nedbank Rewards Revolve Card. This is a revolving-balance payment solution for SMMEs that want the flexibility of a revolvingcredit solution without onerous payback requirements. Clients have the option of repaying only five per cent of the outstanding balance monthly, and earning Greenbacks (Nedbank’s loyalty rewards programme) on their spend, and double rewards on American Express Card® spend.

ADDING VALUE Our delivery of a personalised customer experience to our business clients relies heavily on our ability to add value. To facilitate this, registered businesses can utilise Avo, an e-commerce platform where we allow them to offer their products and services for sale. In April 2022, we launched Avo B2B Marketplace, which simplifies the connection between business buyers and sellers on a secure platform – available anytime, anywhere. SimplyBiz, powered by Nedbank, was created by business owners for business owners. It caters to all entrepreneurs, irrespective of their banking affiliation, by providing beyond-banking assistance such as advertising, coaching,

Our partnership with Township Entrepreneurs Association offers TEA Kasi Business Workshops countrywide.

EFFECTIVE ENTERPRISE DEVELOPMENT SUPPORT IS A KEY COMPONENT OF BUSINESS GROWTH, EXPANSION AND REMAINING SUSTAINABLE IN AN EVER-CHANGING MARKETPLACE. business support materials, and strategic initiatives. SimplyBiz continues to enhance its impact through a range of activities aimed at supporting SMEs. To streamline payments, Money Message allows for the sending and receiving of payments via WhatsApp. PocketPOS is a chip-and-PIN, contactless mobile POS solution in South Africa that turns a small business owner’s smartphone or tablet into a POS device. This simple, secure, convenient and easy-to-use app accepts card payments in-store or on the go. To further drive inclusion for SMMEs, PocketPOS now also supports tap on phone, saving businesses the cost of buying a card acceptance device. Customers just tap their contactless enabled bank card on the business owner’s compatible smartphone. They can also pay with Masterpass.

THE POWER OF PARTNERSHIPS We actively forge partnerships with various stakeholders to develop accessible and innovative solutions that address client pain points. Our partners contribute their expertise to provide renewable energy solutions for the agricultural sector, create funding solutions for irrigation, and provide financial and a nonfinancial solutions to black farmers and black-owned entities. We also support the enhancement of the operating model for locally owned spaza shops, ensuring their effective competition in the retail sector. Furthermore, we offer support and mentorship to qualifying candidates in the fuel sector as part of our commitment to black economic empowerment (BEE).

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In 2022, we continued to generate shared value through our partnership with Township Entrepreneurs Association (TEA) by conducting TEA Kasi Business Workshops countrywide. These workshops equip township entrepreneurs with the necessary business skills, tools and financial support for their success. Since May 2022, the training provided through these workshops has benefitted 3 000 physical and 4 000 online township SMMEs. We have also sponsored around 140 township exhibitors with Nedbank POS machines, created supplier procurement opportunities for more than 40 black-youth-owned service providers, and awarded cash and business support to 10 Pitch Challenge winners in 10 township communities nationwide. This immersive community approach has deepened our understanding and enabled us to curate a market-first informal trader CVP (Customer Value Proposition) that promotes financial inclusivity.

SUPPORTING BUSINESS DEVELOPMENT We believe that effective enterprise development support is a key component of business growth, expansion and remaining sustainable in an everchanging marketplace. To this end, we implement comprehensive business-building initiatives, provide training, capacity building, mentorship, specialist business guidance and participation in incubation programmes. Nedbank implemented a business development programme in Mamelodi, Umlazi and Stellenbosch, supporting businesses that have benefitted from our socioeconomic development interventions. Additionally, we allocated R4.4-million towards a national business development programme that assisted 225 women-owned businesses in the tourism sector. This programme involved training and business development support for 25 business owners in each of the nine provinces. Nedbank also actively supports public sector clients in their endeavours to nurture and develop SMMEs. In 2022, we implemented various programmes in collaboration with

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NEDBA NK A DV ER T ORI A L

different government role players. One notable initiative was the Financial and Business Management Training where 80 businesses across various municipalities in different provinces were selected to participate in the training. These businesses received support to strengthen their financial, accounting, and tax compliance skills. We are currently expanding the programme to municipalities in the Free State, KwaZulu-Natal and Eastern Cape. As a result of these initiatives, the participating businesses created 121 jobs throughout 2022.

Images: Supplied

PROVIDING MULTIPLE TOUCHPOINTS TO MAXIMISE ACCESS To enhance accessibility in key markets and adapt to changing customer behaviours, we have strategically invested in a combination of staffed points of presence, self-service devices, a 24/7 free-of-charge contact centre and digital platforms. By doing so, we aim to optimise overall space utilisation as foot traffic patterns indicate a decrease in general branch usage. Mega branches have been established in in various townships with the aim of driving engagement with the community while offering the full suite of Nedbank services. These branches have been specifically designed with community zones, where the community can attend workshops on financial and life skills, including how to start and run their own side hustles or small businesses, draw up a CV, and more.

Mega branches have been established in in various townships with the aim of driving engagement with the community while offering the full suite of Nedbank services In addition to to this more targeted approach to the provision of brick and mortar branches, we have extended our reach in many rural areas and small towns through partnerships with third parties, especially retailers, we have implemented different approaches based on the existing gaps in the market for serving clients. Our partnership with Boxer, for example, enables us to provide convenient access to high-demand banking products and services. In-market mobile teams have also been deployed, with many of the team members recruited from the communities where they now operate. These individuals are trained to provide client education and assistance where required. Currently, more than 30 per cent of our sales force is fully mobile.

the South African economy as a whole. We remain committed to a partnership approach through which we can deliver sustainable solutions that enhance the lives and businesses of all South Africans living and operating in these vital economic ecosystems. To find out more about what we are doing in townships, follow #togetherbekelebeke

Scan this QR code to go directly to the Nedbank website.

For more information: www.nedbankgroup.co.za

COLLABORATION AND COMMITMENT Nedbank continues to engage and collaborate to ensure that our solutions and services provide the necessary support and value to people and communities, and also stimulate economic growth. The township economy is vast, but it is also incredibly valuable to

SIMPLYBIZ WAS CREATED FOR BUSINESS OWNERS BY BUSINESS OWNERS AND IS POWERED BY NEDBANK. IT IS AVAILABLE TO ALL ENTREPRENEURS. TOWNSHIP ECONOMY

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T HOUGH T L E A DERSHIP: URBA NIS AT ION

TRANSFORMING TOWNSHIPS Townships are critical urban spaces in South African cities – transforming local economies in townships is now more important than ever before, writes DR ANDREW CHARMAN, co-director at the Sustainable Livelihoods Foundation

ost people living in cities in South Africa are residents of townships. These urban spaces are characterised by a residential form, pervasive informality and spatial disconnection from commercial centres. The urbanisation trend of the past two decades is set to continue adding pressure to the backlog in service provision. The residents of these urban spaces have responded to the demands for housing, consumer items and services in imaginative ways, supporting the emergence of local economies. While peoples’ responses are innovative and vibrant, there is often a disconnect between these activities and municipal capacity to provide basic services and a favourable regulatory environment. Municipal governance needs to be responsive to the speed and complexity of change in townships.

Dr Andrew Charman

AN INTERDISCIPLINARY APPROACH TO ECONOMIC DEVELOPMENT The Cities Support Programme’s Township Economic Development Project (CSP TED) has sought to foster new thinking around township economies through its advisory support work, which started in 2020. This innovative project is working with metros to advance an area-based development planning approach. The TED project aims to support the transformation of townships into urban places that: • are safer and more socially cohesive; • enhance local economic opportunities; • enable the growth of small, medium and micro enterprises; • provide decent housing; and • foster dignified neighbourhoods. The TED Project is partnering with five metros – eThekwini Metro, the City of Tshwane, the City of Ekurhuleni, Nelson Mandela Bay Metro and the City of Cape Town – to develop a systematic approach to township economic development in pilot sites. The project team aims to promote an interdisciplinary project development

approach, applying a socio-spatial lens to economic development. A significant output of this project has been the formulation of TED strategies for each of the five pilot townships. The TED strategies include 40 collaboratively developed projects. An important perspective of the interdisciplinary approach is that it advances interdepartmental collaboration. In each pilot, the metros are implementing eight projects as the first step towards systematically incorporating this approach as a long-term planning mechanism. The technical support from the TED project complements the priority functions of government, including its roles in planning and co-ordinating development. This development agenda includes spatially targeted development into commercial precincts and urban management, as well as strategic policy refinement. The CSP recognises that partnerships are crucial for economic development. Hence, the TED project has fostered partnerships to extend the reach of this work. Through these partnerships, the TED project has received support to unlock investment for infrastructure, provided training to township beneficiaries, and enabled local businesses to access new markets. Partners include the Neighbourhood Development Partnership Programme in National Treasury, the World Bank Group (South Africa), the European Union-funded Ecosystem Development for Small Enterprise programme within the Department of Small Business Development, and the United Kingdom of Great Britain and Northern Ireland’s Foreign, Commonwealth & Development Office.

LOOKING FORWARD Based on the momentum gathered in the project from 2020 to 2023, a fourth phase of work has been approved and will run until March 2025. In this phase, fifteen established projects will be taken forward and an additional five on-boarded. A priority will be strengthening partnerships for investment and implementation. Through the TED project, the partner metros are sharing their experience to set a new developmental urban agenda. The TED pilots offer invaluable learning on the challenge of scaling up township transformation. A development agenda that promotes better township economies will result in more vibrant neighbourhoods for all.

THE URBANISATION TREND OF THE PAST TWO DECADES IS SET TO CONTINUE ADDING PRESSURE TO THE BACKLOG IN SERVICE PROVISION.

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T HOUGH T L E A DERSHIP: T OW N PL A NNING promoting a more equitable and sustainable future for current and future residents. With proper planning and investment, townships can become vibrant parts of the larger metropolitan region, contributing to the area’s overall economic and social wellbeing.

PLANNING FOR OVERURBANISATION Many large cities are slowly approaching population capacity and soon may not be able to sustain South Africa’s growing population, writes ROELOF VAN DEN BERG, CEO of the Gap Infrastructure Corporation

Images: istock.com/AndreyPopov, Supplied

ore than two-thirds of South Africans its adjacent cities and the rural areas in between. now live in urban areas, with an average These are linked through employment and of 48 people living in a square kilometre, business activities, with the urban centre serving reports Statista in its Urbanisation as the primary business hub. in South Africa report. Gauteng, the When cities begin to grow to capacity, the country’s most populated excess population spills over into the province, has 885 people per closest developed towns first. From there, square kilometre and, as South the less populated rural areas in between Africa’s population grows by see a rise in residential demand. These more than half a million each areas are rarely equipped to deal with an year and people are generally influx of residents. drawn to cities, that number is To meet future population needs and bound to keep increasing. ensure that these secondary and tertiary As the country’s population metropolitan zones don’t suffer the same Roelof van Den Berg steadily increases and cities infrastructure restrictions as overcrowded begin to reach capacity, more cities, governments, town planners and and more of the working population will move to construction companies must prepare. less urbanised surrounding areas. Informal township areas are generally It’s about more than just space. Cities are located on the outskirts of towns and often struggling to keep up with growing demand lack proper infrastructure development. It’s our for services and ageing infrastructure is already goal to uphold the principle of spatial justice starting to buckle. We simultaneously need to and address past imbalances through infill maintain our existing cities and lay the groundwork development on underutilised land. This also for less urbanised towns that can one day become means integrating and uniting townships with populated cities capable of sustaining the heavy their larger neighbours and promoting long-term burden of urbanisation. sustainability and efficiency. By incorporating more urban socioeconomic characteristics into rural town planning, TOWN PLANNING IS ESSENTIAL townships will have the basics in place for This is where town planning plays a pivotal role. when urbanisation occurs. One of the key factors in town planning is making This involves implementing various strategies, towns and cities economically, socially and such as improving transportation infrastructure, environmentally viable. Additionally, town planners providing access to basic amenities and building need to consider the effects of what may be a infrastructure, which support economic growth. mass migration to smaller towns in the next By doing so, we can ensure that these areas few decades. can accommodate a large influx of people while By taking the proactive approach, South Africa can be more prepared for when this day does come. There are two viable options for achieving this: 1. Metropolis development A metropolitan region comprises an urban centre,

2. New purpose-built towns Alternatively, government needs to look at establishing new towns where infrastructure, such as road networks, water and sewerage reticulation systems, electricity grids, and a wide range of other public services are purpose-built for future expansion. Building new towns with the capacity to grow into sprawling city centres will allow for the mass migration of people from densely packed cities. This, in turn, will serve to de-densify the urban areas, ease the burden of overcrowding and generate new avenues for economic growth. However, the initial cost of developing a new town can be significant, and there is a risk that it may not attract the necessary population to sustain it. The process can take many years and requires careful planning and co-ordination between different stakeholders. One solution is to appoint a fully integrated construction and infrastructure development company with expertise in town planning, zoning, infrastructure design, engineering and construction under one roof. No matter which option government chooses, a project of this magnitude requires years of dedication, public and private sector co-operation, substantial funding and patience. If we do not prepare the land for more people, we will see a sharp increase in failing infrastructure, longer days without water and electricity, overburdened roads and a housing shortage in our already struggling cities.

STATISTA REPORT ON URBANISATION IN SOUTH AFRICA

WORLD BANK POPULATION INDICATOR

SOUTH AFRICA OVERVIEW

WITH PROPER PLANNING AND INVESTMENT, TOWNSHIPS CAN BECOME VIBRANT PARTS OF THE LARGER METROPOLITAN REGION, CONTRIBUTING TO THE AREA’S OVERALL ECONOMIC AND SOCIAL WELLBEING. TOWNSHIP ECONOMY

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TRANSFORMING TOWNSHIPS Townships are critical urban spaces in South African cities – transforming the local economies in these spaces is more important than ever

Most people living in cities in South Africa are residents of townships. These urban spaces are characterised by a residential form, pervasive informality in social and economic exchanges, and spatial disconnection from commercial centres. There has been a trend of urbanisation in the past two decades, which is only set to continue adding pressure to the backlog in service provision. As more people move into urban areas, many will live in townships, often to access affordable accommodation.

township economy and municipal capacity to provide basic services and a favourable regulatory environment. Municipal governance needs to be responsive to the speed and complexity of change in townships.

The Cities Support Programme’s Township Economic Development Project (TED) is responding to this challenge. Starting in 2020, this innovative project has been working with metros to advance an interdisciplinary area-based development planning approach. The The residents of these urban spaces have responded to the demands TED Project has partnered with five metros to develop a systematic for housing, consumer items and services in innovative, imaginative approach to township economic development in pilot sites. The pilot sites and participating metros are Pinetown South in eThekwini, ways, supporting the emergence of local economies. Hammanskraal in the City of Tshwane, Thembisa in the City of These economic responses range from small scale backyard rental developments to homegrown delivery service apps that respond to Ekurhuleni, New Brighton in Nelson Mandela Bay Metro and Delft in the City of Cape Town. local needs and budgets. While peoples’ responses are innovative and vibrant, there is often a disconnection between the emerging Metro Partners

Technical Partners

Promoting Liveable Neighbourhoods through Economic Development

The CSP recognises that partnerships with the private sector and civic society are crucial for economic development. Hence, the TED project has fostered partnerships to extend the reach and impact The aim of the TED project is to support the transformation of of this work. Through these partnerships, the TED project has townships into urban places that are safer, more socially cohesive and provide decent housing and public places. The key is to enhance received strategic and technical support to unlock investment for infrastructure, provided skills and vocational training to township local economic opportunities and enable the growth of SMMEs. beneficiaries, and enabled local businesses to access new markets To achieve these aims, the state needs to respond to trends in and refine their products. Key partners include the Neighbourhood townships, with interventions informed by evidence. As such, the Development Partnership Programme in National Treasury, the first steps in the TED project were to understand people’s needs. The project team did this through conducting business surveys and World Bank Group (South Africa), the European Union funded Ecosystem DevelopmentPROJECT for Small Enterprise programme within the PROJECT DETAILS studying economic hotspots, engaging communities in imbizos, MECHANISM PROJECT DETAILS PROJECT MECHANISM Department of Small Business Development, and the Government of facilitating participatory engagement workshops, studying spatial PROJECT DETAILS PROJECT MECHANISM the United Kingdom of Great Britain and Northern Ireland’s Foreign, dynamics, and walking the streets with metro officials to get to grips Opportunity Statement Alignment with with Opportunity Statement Alignment Commonwealth & Development Office. with local issues. If our cities are to fulfil their role as an enabler of Opportunity Policies & Programmes Alignment development, Statement they will need sharp insights into the patterns of Policies &with Programmes development that are shaping these spaces. Such detailed evidence Looking Forward Policies & Programmes project from 2020 to 2023, has enabled the participating metros to finely calibrate projects that Based on the momentum built up in the Endorsement Project Goal Goal Endorsement Project a fourth phase of work has been approved and will run until March can contribute towards the transformative vision. Endorsement Project Goal 2025. In this current phase, fifteen established projects will be five projects will be on-boarded. A significant output of this Key Activities / project Key Activities / has been the formulation of TED taken forward, and an additional R offor Funding A priority will be on strengthening partnerships investment and StrategiesKey for each of the five pilot townships. The TED Strategies RStatus Status of Funding Deliverables Activities / Deliverables implementation. include forty collaboratively developed projects. An important R Status of Funding perspective Deliverables of the interdisciplinary approach is that it advances Through the TED project, the partner metros are sharing their interdepartmental collaboration. In each pilot, the metros are Quantifiable Indicators Quantifiable Indicators RisksRisks & Assumptions experience and lessons to set a new developmental agenda. &urban Assumptions implementing 8 projects as the first step towards systematically Opportunity Statement Alignment w of Achievement Quantifiable Indicators of Achievement The TED pilots offer invaluable learning Risks on the challenge of scaling incorporating this approach as a long-term planning mechanism. & Assumptions of Achievement Policies & Pr up township transformation. A development agenda that promotes The technical support from the TED project complements the economies in a responsive manner will result in priority functions of government, including its roles in planning and better townshipLANDSCAPE INSTITUTIONAL INSTITUTIONAL more productive, safeLANDSCAPE and vibrant neighbourhoods for all. co-ordinating development. This development agenda includes Endorsemen Project Goalinto commercial precincts and urban INSTITUTIONAL LANDSCAPE spatially targeted development management as well as strategic policy refinement. City Beneficiaries City Beneficiaries

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BUILDING ENTREPRENEURS South Africa’s National Development Plan has set ambitious goals of creating 90 per cent of the country’s new jobs by 2030. This plan will fail if corporate South Africa does not work hand in hand with the public sector to achieve this, writes RAINA JULIES

esearch findings by the International Finance Corporation reveal that small and medium enterprises (SMEs) in this country employ between 50 and 60 per cent of South Africa’s working population and contribute approximately 34 per cent to gross domestic product, making the sector the lifeblood of the economy. But despite this, SMEs are most vulnerable to external economic fluctuations and a myriad of challenges beyond their control (for example, load shedding, access to finance, digitisation, and so forth). A research study on the impact of load shedding, for instance, by the Small Enterprise Finance Agency found that 71 per cent of the agency’s funded clients have been impacted negatively by power outages. Seventy-six per cent of respondents indicated that they didn’t have alternative power in place to mitigate the effect of load shedding; many businesses have had to reduce their production time based on load-shedding schedules, and many indicated that they required assistance with funding to acquire alternative energy sources and help with restructuring their loans in respect of their loan repayment obligation with the agency. Minister of Small Business Development Stella Ndabeni-Abrahams at a recent meeting about the department’s quarterly performance reports shared that while

during Q3 2022/23, the department supported 5 540 township and rural enterprises, 3 336 start-up youth businesses, and 11 772 competitive small enterprises and co-operatives, more still needs to be done. Big business is coming on board and partnering with various stakeholders to support SMEs in addressing the long list of challenges they face and to develop and boost the township economy.

All the candidates

Big business is coming on board and partnering with various stakeholders to support SMEs.

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SME PROF IL ES

SMES ARE MOST VULNERABLE TO EXTERNAL ECONOMIC FLUCTUATIONS AND A MYRIAD OF CHALLENGES BEYOND THEIR CONTROL. Boipelo Malao, senior brand manager for Amstel, shares that the company’s “I AMSTEL” campaign is its contribution to building a strong entrepreneurship culture in SA. “The Entrepreneur – I Amstel building I’ksasa Lami” (I Amstel building my future) Competition” (read more about this on page 46) was designed to recognise the township business owners who, despite all the challenges faced, are carving out offerings to boost the township economy and build towards a sustained economic outlook for South Africa. We met up with 12 of the “I AMSTEL” campaign entrepreneurs, from Alexandra to Soweto and Katlehong to Eldorado Park, and asked them to share more about their businesses that are impacting their township economies and creating sustained economic growth for the country.

CARROT GANG FOOD Carrot Gang Food was founded in 2019 by Eugene Mabasa and Promise Seta, two driven entrepreneurs with a passion for food. They started selling on Sundays with a home grill and a deep fryer at a local pub in Chiawelo, Soweto. Due to growing demand, they added Carrot Gang Food: Eugene Mabasa and Promise Seta two more days to their schedule. However, the COVID-19 pandemic forced them to close down. Despite this setback, the duo persisted and started selling from a garage at home, which proved to be an instant success. They used the profits to invest in proper industrial equipment to ensure consistent and high-quality meals. What sets Carrot Gang Food apart from its competitors is its unique approach to preparing meals and its extensive menu that caters to various appetites. The brand has received tremendous support from the community and has since moved to a bigger space where a dining area is set up. The owners’ ultimate dream is to have branches across the country and create employment opportunities for as many people as possible. With its tagline, “A kasi culinary experience,” Carrot Gang Food aims to inspire others to pursue their dreams and show that it’s possible to succeed from scratch.

EXCELLENCE MOBILE BAR

come up with the idea for iTaxi Ubuntu App. It is the only private taxi booking app that Excellence Mobile Bar is a mobile bar and allows public taxi commuters to choose from cocktail company, specialising in providing various rides, including personal, tailor-made packages for student, staff, corporate, event any function. Founders and pensioner rides. The app Bryan Monethi, Thokozani provides real-time pricing, with Buthelezi and Rebecca already discounted pricing Goodwin are passionate available for individuals about bringing the party and groups. to any event, and the After finishing high school, company’s goal is to make Mazibuko took various your event unforgettable. entrepreneurship courses, Monethi noticed that it’s such as Seed Academy, Youth often challenging to bring Entrepreneurship Fund, and the party to private events, various masterclasses. The thanks to the malume iTaxi Ubuntu App is designed was’khiya (“uncle with the Excellence Mobile Bar: for commuters who use key”) who’s stingy with the Bryan Monethi public transport daily and face booze. The company aims to numerous problems, such as take over from that uncle by long wait times and unpredictable pricing. bringing high-end corporate event services to With the app, commuters can now have private parties. a private taxi at their fingertips and enjoy Excellence Mobile Bar is a cost-effective discounted rides in real-time. It aims to solution for people who want to host an event, become the go-to platform for ride-hailing in but can’t afford a full bar service. The business the South African economic climate. uses the contents of the clients’ liquor cabinets to set up a bar and get pouring. The company provides a range of services, LebzCafé including mobile bars, designer cocktail bars, Lebohang Nyandeni is the founder of this a the freshest blended cocktails and mocktails, coffee company offering a range of coffee and branded cups for personalisation. products including 100% With the best team at your service, freeze-dried premium Excellence Mobile Bar is dedicated to instant coffee, coffee providing the highest standard of service beans, hot chocolate, for any event. Let it make your next and chai tea. The event unforgettable with its unique and name “LebzCafé” is a cost-effective services. combination of “Lebohang/ Lebza” and “Café,” the founder’s first name. Nyandeni’s love of coffee and dedication to offering quality and premium products led to the creation of LebzCafé. LebzCafé: Lebohang Nyandeni Nyandeni’s grandmother sparked his love for coffee while he was growing up in Evaton. With just R8 000 in his bank account, iTaxi Ubuntu App: Samuel Jr Mazibuko he invested in brewing equipment and started his own coffee shop. He found a supplier in Cape Town and learned about the roasting process, which helped him uncover a niche iTaxi Ubuntu App in the market. Nyandeni’s unique blend of Samuel Jr Mazibuko is the founder and Robusta and Arabica beans produces an CEO of iTaxi Ubuntu App, a platform that easy-to-drink coffee that he describes as is changing the way commuters use public tasting like love, but less bitter – it is transportation in South Africa. Born and raised available at Pick n Pay Ola’s Market and in Soweto’s Jabulani, Mazibuko attended his through Takealot. primary school in Pretoria before moving Nyandeni was also recently named a to Johannesburg to complete his high Gauteng Man of Valour by Trade Route City school studies. and is a reigning Sunday World Unsung Hero. At the age of 16, Mazibuko embarked on He hopes that his example will inspire others his entrepreneurial journey, and his passion to chase their dreams. for creating innovative solutions led him to

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La Virgin BOUTIQUE/Jayma Supplies

team investing a lot of care and creativity in preparing Instagram-worthy drinks that Jayma Supplies supplies various goods to communicate the passion, commitment and residents in the heart of Soweto. It stocks professionalism the brand stands for. organic white- and brown-shelled eggs, At Mr Bartender, the mission is to selling to resellers, bakers ensure that guests have an unforgettable and household consumers experience, with various options that can be at very competitive prices. tailored to suit their needs. Chacha is deeply The business extends committed to delivering exceptional services appreciation to the that take away the hassle of organising a community by teaching bar. From bar stations and mixologists to potential resellers about the glassware, waiters and alcohol, the team egg-reselling business. has everything covered. This commitment Another leg was to delivering an unforgettable experience added to the business, sets them apart and makes them the go-to La Virgin Boutique, Kasi brand for anyone looking to host a when founder Nwabisa successful event. Jayiya started making and La Virgin Boutique/ Jayma Supplies: selling Brazilian mix wigs Nwabisa Jayiya during her tertiary studies. Orlando Sneaker Care Technicians She found a gap in the Gontse Nxumalo is the founder of market concerning a lack of service in this Orlando Sneaker Care Technicians industry and aimed to change the narrative (OSCT), a sneaker cleaning and shoe care and give undivided client business based in attention and customisation. Orlando East, Soweto. Services include customising and As a Sneaker Care manufacturing of virgin hair wigs, technician, Nxumalo or completely remaking and his team are in pre-owned wigs for a new and the business of selling fresh feel. It also assists with convenience to their overall wig hair care services clients who often have and supplying adequate hair busy schedules and care products for the customers’ don’t have the time to natural hair, weaves and wigs. It clean their sneakers. ensures timely delivery and always OSCT offers a range provides professional services. of services such as The mission of the two sneaker cleaning, Orlando Sneaker Care Gontse businesses is to provide affordably Technicians: colour restoration, Nxumalo priced goods and services of an nubuck/suede exceptionally high standard. In this renovations, leather way, they can create a Soweto business hub maintenance, heel maintenance, repairs and – that’s the direction Jayma Supplies and La customisation. It aims to restore the lost Virgin Bouquet aim to pave. love and relationship their clients once had with their shoes. It offers deliveries and pick-ups at clients’ Mr Bartender doorsteps upon request and also does Founded by Katleho Chacha, in-house calls for their clients’ comfort. who loves preparing Additionally, OSCT offers brand activations exceptional drinks for events, on-site for events and consultation for and, of course, TikTok. brands regarding sneaker care. It is a Despite being new to the one-stop shop catering to all shoe needs industry, the brand has in Soweto. already earned a reputation for In addition to its services, OSCT delivering exceptional services has hosted events, social runs and that leave guests thrilled and business talks at its space to market the talking about the event for business. The team’s approach to their years to come. work centres on the things they love most, The brand’s focus on quality Mr Bartender: making it an exciting journey for them and and creativity has earned it a Katleho Chacha their clients. positive reputation, with the

The African Stich Established in 2013 by Lehlohonolo Kgola from Katlehong township, Johannesburg, The African Stich is a streetwear brand that creates unique African-print clothing and bags. The business began full operations in 2018 after being formalised in 2016. The African Stich focuses on making African print more stylish, catering to a variety of streetwear ambitions. The company offers The African Stich: Lehlohonolo Kgola custom-designed bags and streetwear clothing made from a range of African fabrics. The brand has a creative team consisting of pattern makers, seamstresses, graphic designers, photographers and models who work together to create unique pieces that customers will love and buy. The company stays up to date with the latest trends and styles by conducting extensive online research, ensuring it stays one step ahead of its competitors. The clothing offered is fashionable, yet casual, and targets both the young and the old. The brand seeks to make African print more fashionable, appealing to customers looking for unique and chic everyday African streetwear. With a passion for creating beautiful and stylish clothing, African Stich is a company that is dedicated to bringing the best in streetwear fashion to its customers.

The White Sneaker Wash Located in Johannesburg, Eldorado Park, the business offers professional quality sneaker care. Established in January 2020 by Zainodien Clarke, the business started by promoting its services through word of mouth in the community. However, soon after, the business received orders from all around Johannesburg, Durban, and Cape Town. The White Sneaker Wash provides various services for all types of footwear, including sneaker The White Sneaker Wash: Zainodien Clarke cleaning and midsole unyellowing.

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For Clarke, his business is more than just a means to support his family. As a victim of the violence that plagues Eldorado Park, Clarke turned to sneaker cleaning as a way to make a living. After posting pictures of his cleaned shoes on Facebook, he quickly gained a following and expanded his services nationwide. His hard work and determination have been recognised, as he was named a Top 12 finalist in I Amstel’s The Entrepreneur Competition. Clarke hopes that his success story inspires young people in the township to believe in themselves and that they too can achieve their goals, no matter their background.

Yethu Indaba Emergency Services: Elsie Mahasha, Gabriel Mahasha and Nkosingiphile Mthimunye

Images: istock.com/ Magnifical Productions, Supplied

Yethu Indaba Emergency Services Yethu Indaba Emergency Services is a crucial asset in addressing the dire need for ambulances and emergency services in townships. With limited government resources and increasing demand for emergency healthcare services, private companies, such as Yethu Indaba Emergency Services, play an essential role in filling the gap and providing vital services to the community. Founded in 2013 by Elsie Mahasha and Gabriel Mahasha, the company’s location in the heart of Soweto puts it in a prime position to serve the community’s needs. As the company grows and expands, it plans to open additional branches in other neighbouring provinces. The business’ mission to deliver world-class patient services and provide the highest quality care is vital in addressing the healthcare disparities experienced in townships. Yethu Indaba Emergency Services provides quality, fast and superior services at a reasonable rate, making healthcare services more accessible to all.

Through its commitment to building sustainable jobs for the youth, Yethu Indaba Emergency Services contributes to reducing unemployment rates and providing opportunities for the youth in South Africa. As it strives towards owning a fleet of ambulances, it will continue to provide essential emergency healthcare services and contribute to improving the healthcare industry’s standards in South Africa.

Zulu Astronaut

Sandile Radebe is the founder and director of Zulu Astronaut, a brand specialing in urban streetwear. Established in 2020 during lockdown, Radebe started the brand after losing his job as a chef. Initially, the brand began by selling T-shirts and other apparel. Zulu Astronaut’s core values are based on affirmations, manifestations and living without limitations, encouraging people to live beyond their wildest dreams. The brand aims to represent everyone, young and old, who believes in themselves and the laws of the cosmos. Zulu Astronaut consists of two members, Sandile Radebe and Andile Langa, and has received a positive reception from people since its establishment. The uniqueness of the brand and what it represents have resonated Zulu Astronaut: Sandile with customers and Radebe and Andile Langa collaborations with other influencers are in the works for this year. Radebe and Langa are excited about the future and are committed to continuing to offer unique streetwear that inspires people to live their best lives without limitations. With a focus on affirmations and manifestations, Zulu Astronaut is more than just a streetwear brand, it’s a movement that encourages people to believe in themselves and their dreams.

Zoezie Weigh and Pay A local supplier of affordable and wholesome grains, spices, oils and meats in Katlehong, the business’ inventory includes essential food items, such as maize meal, rice, sugar, sugar beans

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and split peas, which are priced from as low as R5. It also offers its own brand of products, including herb spices, atchaar, peanut butter, chilli, and pine gel. The store caters to every family’s needs for simple meals. For example, a daily supply of brown sugar, teabags, coffee, fine/coarse Zoezie Weigh and Pay: mabele and mixed Zuziwe Maphalala samp and beans can be purchased. Its mission is to expand the product range and open branches in other communities and townships. The store is open every day from 7am to 7pm, providing convenient access to affordable products for customers on a limited budget who cannot afford to buy in bulk or travel far to big supermarkets. Customers can visit the store to experience the team’s dedication to helping families stretch their budgets and feed their loved ones.

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Saluting ENTREPRENEURS Through The “I AMSTEL” ENTREPRENEUR CAMPAIGN Amstel Lager is recognising and paying tribute to entrepreneurs with an innovative campaign supporting the township economy

hat does progress mean to you? If TV and social media are to be believed, it’s about watches and cars – but, for most of us, progress is lived in the smaller moments. These are the moments that Amstel Lager seeks to celebrate in its campaign, “I Amstel”. This campaign is a tribute to the everyday hustle and the individual progress journeys of different South Africans. “The reality is that each of us wants to be the best version of ourselves, but each of us will face different obstacles as we try to realise that aspiration. ‘I Amstel’ is about the feeling that comes with taking a step forward, whether big or small,” says Boipelo Malao, senior brand manager for Amstel. In line with this, the brand launched “The Entrepreneur – I Amstel building I’ksasa Lami” (I Amstel building my future) Competition to recognise those township business owners who are on their way to reaching their goals. The competition saw Amstel partnering with four community radio stations (Kasie FM, Alex FM, Thetha FM and Jozi FM), inviting business owners to enter. An impressive 5 023 entries

A PERFECTLY BALANCED BEER Amstel is a premium beer brand known for its slow-brewed, extra-matured taste. With a commitment to innovation and progress, Amstel strives to deliver consistently high quality products for all South Africans.

were received and listeners were invited to vote for their favourite businesses. “We were blown away by the number of entries. It proves to us that entrepreneurship is alive and well in ekasi. Wherever we look, we are surrounded by people harnessing their talents and creativity to serve their communities. These entrepreneurs are not only improving their own lives, but by providing jobs and supporting their communities, they are inspiring many of us along our collective path as well,” Malao elaborates.

MARKETING AND PR EXPOSURE AND MENTORING The 12 finalists were selected after intensive prior rounds and meet-and-greets with the judges. Each contestant received over R50 000 in marketing and PR exposure to help promote and accelerate their business. In addition, each business owner is receiving mentorship from one of four carefully selected, fierce business luminaries. The incredible mentors that will provide advice and guidance, include DJ Zinhle, the brains behind

Not for Persons Under The Age of 18

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Images: Supplied

“We are surrounded by people harnessing their talents and creativity to serve their communities.” – Boipelo Malao

Era by DJ Zinhle jewellery and accessories, and Caron Williams, who established The Throne magazine. Lebogang Mothibe, better known as ShugarSmaxk, will also share the experience he has gained as the head of various media and marketing groups. Marketing and advertising expert Khaya Dlanga is another famous face eager to help the business owners. “We are very proud to be able to contribute to building entrepreneurship in South Africa

through this initiative,” Malao comments. “We know that start-up entrepreneurs often walk a harder road than many of us, and we hope that our winners will offer inspiration to other township-based entrepreneurs to keep going, no matter what.” He adds that the evolution of these Top 12 businesses as they go through the process will demonstrate just how important it is to “keep on keeping on”. “After all, each of us is a work in progress. The fact that we keep on pouring our love and passion into projects even when the going gets hard is perhaps the greatest success of all,” Malao comments. After the Top 12 receive 10 weeks of support, Amstel will select the four final winners who can look forward to even more rewards and business growth opportunities. “We are very proud to be able to contribute to building entrepreneurship in South Africa through this initiative, but we do know it’s never about perfection; it’s about progress,” concludes Malao.

Scan this QR code to go directly to the Amstel website.

For more information: www.amstel.co.za

Not for Persons Under The Age of 18

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uring apartheid, the township shebeen HAPPY ZONDI finds out became a place for quiet protest where what Taverns of the Future is patrons would often discuss politics and all about also where the police often raided to arrest shebeen queens and political dissidents. provides them with an opportunity to drive Though illegal spaces, as black people were enterprise development by enhancing kitchen prohibited from selling alcohol, bootleggers infrastructure and also enables them to enhance emerged around the township and found job creation opportunities, skills development, innovative ways to keep these social spaces going. and capacity building through its chef So while in the ‘70s and ‘80s, shebeens were training programme. used as places for political activists to discuss Director of corporate affairs at HEINEKEN politics and plan political activities, from the ‘90s, Millicent Maroga highlights the need for taverns they became popular networking hangouts for the to be welcoming safe social spaces for men country’s black professionals. and women as a key driver of their programme: Today, shebeens have morphed into taverns, “We would like to transform taverns to become they’re still popular hangouts for township sophisticated gathering places that are not centred residents, but patrons also now commute from on the need for excessive drinking, suburbs and urban city centres but rather offer to spend their weekends at their quality occasions, with favourite township haunts. Gift good food, company, Sedibeng, an entrepreneur in the and entertainment.” Beverages Tavern of the Future The inspiration for his business, programme and owner of Siga says Sedibeng, was to offer Culinary, a popular tavern in something uniquely Mexican and Alexandra township’s Eastbank unusual to the township market. “I Avenue, says the modern-day wanted to showcase various food township taverns are innovative Gift Sedibeng options and introduce a different safe, social spaces offering patrons culture to the township community unique cuisine. without moving away from the township. I interned Sedibeng, one of a group of taverners whose as a chef in Texas in the United States and businesses have been transformed through aspired to bring this knowledge back home, more the HEINEKEN programme says: “Because especially to the township,” says Sedibeng. of this programme, many changes have been Before being invited to the HEINEKEN Taverns implemented both from an infrastructure and of the Future programme, Sedibeng says the operational perspective to improve business business was doing all right, but not that great. efficiencies. These include a new toilet with sensors for our female patrons, which has resulted in a marked increase in our female patronage. We have also installed CCTV cameras to increase personal safety, and for tracking and recording of our sales, we have also introduced a POS system.” The HEINEKEN programme also offers taverners Wi-Fi access, beer taps and help with building and construction, business and diversification support and funding. The Taverns of the Future programme, in partnership with McCain Food Services, Primedia Retail, and Vodacom Financial Services, has to date enhanced and transformed over 120 taverns across metropoles and townships. Monako Dibetle, head of sustainability and communications at McCain Foods SA, says that the programme

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“More customers have meant that we’ve been able to offer employment opportunities to our surrounding communities.” This, Sedibeng adds, is what he is most proud of as an entrepreneur. Rita Zwane, an award-winning entrepreneur popularly known as MaZwane, founder of Imbizo Shisanyama at Busy Corner in Ivory Park, Tembisa, is a mentor to business owners that are part of the HEINEKEN’s Taverns of the Future programme. Busy Corner, established in 1997 on a street corner with only a single pot, gas griller, display fridge, gas paraffin stove and two employees, now has a location in Midrand Mall. Rita Zwane MaZwane says she is taking her role in this programme very seriously because she loves interacting with other business owners and wants to upskill tavern owners, current and future, with what she’s learned over the 26 years of building her brand. “I’m passionate about entrepreneurship and the township economy and believe it’s one of the solutions to SA’s high unemployment rate. The township is full of entrepreneurs who need business owners like me to guide them on how to run their businesses efficiently and successfully as I have personally walked the entrepreneurship road.”

Images: Supplied

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“THE TAXI INDUSTRY IS NOT LOOKING FOR A DIGITAL SOLUTION, IT IS LOOKING TO FORMALISE ITS ECONOMY.” – LONWABO SAMBUDLA

the idea because it limits their access to cash for small daytime expenses, for example, buying food, and because the smart card system exposed them to having to declare their incomes.

NEW FINTECH INITIATIVES NEEDED

OPPORTUNITIES FOR DIGITISATION The march of innovation in South Africa’s public transport sector is more like a taxi darting through a busy main road during rush hour than an elegant procession to a defined end point. But that’s on brand. By LINDSEY SCHUTTERS

Image: istock.com/ Graham Montanari, Supplied

Images: Supplied

stimates by Transaction Capital state that about 69 per cent of the country’s households use minibus taxis for their daily commute. The group’s data also reveals that minibus taxis use two to three billion litres of fuel per year, with an average fuel spend of R40-billion in the 2022 financial year. And a Bloomberg report in 2020 revealed that the industry employs about 300 000 drivers and generates an estimated R90-billion in revenue every year. By these estimates, this industry sector is a huge segment of the market.

THE OPPORTUNITIES FOR DIGITISATION Informal economies, such as the taxi industry, are the epitome of Africa’s technology conundrum. Minibus taxis are by far the most widely used form of public transport in the country, but receive the least – if any – government support. “What everyone gets wrong about the taxi industry is that taxi operators are at the mercy of taxi drivers,” Santaco president Abnar Tsebe explained to the innovators and investors attending the Africa Tech Week in Cape Town.

“The drivers are paid in cash and have daily targets to hit. They will drive recklessly to make those targets. Any digital solution would need to address that issue first.” An early canary in the taxi industry technology problem mine was a smart card system piloted by the South African Local and Long Distance Taxi Association (SALLDTA) in 1999 – only 12 years since the industry was first regulated by government. Net 1 Universal Electronic Payments System Technologies – then known as Applied Technologies – rolled out the system with one of the two major operators in the Soshanguve area and violence erupted shortly after launch. While it’s unclear whether the Federated Long Distance Taxi Association (FELDTA) felt pressured into accepting the new system without adequate communication, government had to step in to quell the violence after 15 people died. The technology solution was quickly scrapped after making a R13-million loss, with a SALLDTA spokesperson citing a “general dissatisfaction with the proposed new smart card system”. Taxi drivers were said to oppose

“The taxi industry is not looking for a digital solution, it is looking to formalise its economy,” says Impuma Group executive chairman Lonwabo Sambudla. Impuma’s IMS Ventures is partnering with Santaco on a new fintech initiative called FairPay, described as a “data-rich platform that integrates into SANRAL’s Automated Fare Collection System”. “Taxis operate for people who don’t have access to the formal economy. Have you ever been to a taxi rank? There is a full economy happening there,” says Sambudla. FairPay promises to stitch together the entire public transport ecosystem, including buses and trains, using the taxi rank – the de facto last mile interchange – as the central hub of operation. This means empowering the informal vendors at the rank to also accept the payment method and become agents to sell other digital products such as airtime, data bundles and electricity vouchers. It enters a sea of fintech products swirling around Africa’s unbanked and joins other failed Santaco cashless payment attempts such as OmniPay in 2005, Taxifone in 2007, TaxiChoice (a Santaco subsidiary) in 2010 and Tap-i-Fare in 2013. Announced in 2016, this new product promised a five-year roll-out window. Seven years later, and commuters are no closer to a digital solution than with any of the other previous attempts. Jamie Thurston Wyngaard, co-founder of another taxi digitisation initiative called Loop, is seeking a solution from the commuter perspective. “You can’t solve the problem if you don’t understand the system,” he says. Loop is an Uber clone that leverages GPS and smartphone integrations to offer more transparency into the expected arrival time and almost e-hailing capabilities. Both solutions are viable, but will require a change in taxi culture that extends beyond payments. Unfortunately, commuters will have to wait for the industry to get its house in order.

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TymeBank set to empower Mzansi’s business owners TymeBank, South Africa’s fastest growing digital bank, offers business banking that is designed to help business owners upscale their businesses.

At TymeBank, we don’t believe we are the gatekeepers to the economy. We’re here to enable entrepreneurs to become the economy. This means going beyond low fees. It means giving you more – and better – tools and services that will help you grow your business and actively participate in Mzansi’s future. By switching to the bank that understands what goes into building a business, you switch to the bank that has your success at its core. “The small business sector in this country is vital to economic development and job creation and deserves all the help it can get, particularly given the immense hardship of the last few years. We believe our revitalised Business Banking offering is what small business owners want, need and deserve,” says Coen Jonker, CEO of TymeBank.

Have an exclusive business bank account The TymeBank EveryDay Business account is easy to open, and it offers all the essential banking needs for your business.

TymeBank Business customers benefit from zero monthly bank fees, free debit card and online purchase transactions, as well as free bulk payments, among other benefits.

Keep business and personal separate Many entrepreneurs, especially those who have just started their business, use their personal bank accounts to receive income and pay expenses, but that is a mistake. It is essential to open a business-specific account from the day your venture opens to ensure that your personal and business transactions remain separate. A dedicated business bank account will give you a better picture of your business’s financial situation, and it makes filing your tax returns simpler as you can easily track business income and expenses. The EveryDay Business account is linked to your personal account profile, making it easy to see what money is yours and what money belongs to your business. It’s a smart way for VAT- and non-VATregistered sole traders to bank. In addition, business bank accounts typically offer tools and services

to help manage your business – for instance, with an EveryDay Business account, you can make bulk payments (to up to 30 accounts in one go) to settle your monthly bills and pay salaries. With us, you do all your banking in one place – helping you to save time that you can then dedicate to other key matters of your business.

Pay multiple business accounts at once. Your time is valuable. Use Bulk Payments to settle bills, invoices, salaries and any other responsibilities in one go. For free.

Boost your business with your own savings Various unforeseen circumstances can impact your business’s performance, such as increased competition in the market, changes in consumer behaviour, seasonality, and changes in regulation. Any of these factors can cause a drop in sales. To mitigate these, you should establish a business emergency fund.

The importance of having a savings pool was most pronounced during the pandemic, which had a devastating effect on many SMEs. Those which had no precautionary funds could not keep their doors open. Having the financial discipline to allocate a portion of your business’s income to savings every month will help you keep afloat, stay agile and deal with unexpected disruptions. The TymeBank GoalSave is an optimal tool for a business emergency fund. GoalSave is a powerful savings tool that grows your money at interest rates that increase over time.

Grow your business income by as much as 10% per year with GoalSave It works like this: you first need to be a TymeBank Business Banking customer. Doing so takes just 5 minutes, and it can all be done online. Once registered, you can access TymeBank’s highly attractive GoalSave tool. It allows you to open up to 10 GoalSave “pockets” into which you can transfer money from your EveryDay Business account. You can then earn more interest the longer you keep your cash in these GoalSaves. Just note that you cannot exceed R100 000 across all your savings pockets. Creating savings pockets for your business is as important as it is for your personal savings. In a business context, consider things like VAT, marketing expenses, office rental, etc. Creating a GoalSave for each one of these financial needs not only helps you keep your finances organised – as each has its own “bucket” – you earn interest on what you put in too. The more you save, the more you earn. It’s that simple.

Over and above the significance that savings can have during disruptions, there is another upside to saving: it can form part of an effective growth strategy. Having your own capital to invest for growth down the line makes good business sense. As a small business, you should look beyond today and have long-term goals – and plan towards these. It’s likely that these aspirations will require a cash injection. Ideally, you should aim to fund this next level of growth partly with your own capital rather than turning exclusively to credit options. Savings should be seen as an investment in the future of your business. Growing your business can be both exciting and nerve-wracking. There are so many things outside your control – economic conditions, your customers’ buying power, loadshedding, etc. However, improving your efficiency and productivity is something that you can control. Digitising aspects of your business may well be the most empowering step you can take in your early years in operation. Reviewing everything from online marketing to using digital accounting tools can significantly help you improve your efficiency and business outcomes. Even one small step towards digitally transforming your business can save you time and money, which is what every startup or small business wants and needs. To find out more about TymeBank’s Business Banking, visit tymebank.co.za/business-banking/.

TymeBank is an Authorised Financial Services (FSP 49140) and Registered Credit Provider (NCRCP 10774). Tyme Bank Limited Reg no: 2015/231510/06.

SMALL BUSINESSES MAKING BIG IMPACTS They call it “kasinomics”, and it is more than a popular book title or a school of thought for township economics; for many entrepreneurs it is a way of life. By LINDSEY SCHUTTERS

ou don’t have to travel far to see major success stories birthed in the estimated 532 townships across South Africa. Visit one of the major shopping malls, and you’ll find a Bathu sneakers outlet. The brand founder, Theo Baloyi, has a well-known story. His father sold the family car to fund his BCom Accounting tuition. His first job was s elling generic perfume out of a backpack door-to-door in Alexandra township, then his accounting career took him to international cities, and he amassed a sizeable sneaker collection – none of themlocal, though. When he returned to Mzansi, he fixed his sneaker collection problem by making a locally designed product that reflected that culture of entrepreneurship.

SPREADING THE LOVE OF COFFEE Sikelela Dibela shares the entrepreneurial spirit of the eKasi hustle culture. Born and raised in Khayelitsha, he dropped out of high school and found his way into the Vida E café kitchens as a dishwasher. He worked and moved through various accessory roles making sandwiches and muffins before learning to make coffee. “It’s only the people who make coffee that get to talk to the customers. When you’re in the kitchen and doing the other work, you only speak to your peers,” recounts Dibela about his time in the coffee franchise.

Sikelela Dibela

Dibela was consumed by the culture of serving quality coffee and his passion propelled him up the business ladder to eventually become a store manager. Then his entire life changed when he was offered the opportunity to move to London and train coffee shop staff for two years. “While in London, I had the vision to have my own coffee house that could bring the coffee culture I loved so much to the township and

“THIS COFFEE SHOP AND MY COFFEE HAVE BROUGHT PEOPLE TO KHAYELITSHA AND INTRODUCED THAT CITY-STYLE COFFEE CULTURE TO MY COMMUNITY.” – SIKELELA DIBELA

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Images: istock.com/kckate16, Lindsey Schutters, Stellenbosch University/Innovus, UNICEP

community I came from,” he explains. “There weren’t any high-quality coffee shops in the townships at the time. People only knew instant coffee and there wasn’t the culture to bring people together over a cup of coffee.” Siki’s Koffee Kafe specialises in bean-to-cup coffee, and Dibela also uses it as a vehicle to spread education about coffee. His concern with instant coffee is that you don’t know where it comes from, and the product then takes on a foreign identity. When you visit Siki’s in the garage of Dibela’s Khayelitsha home, you’re exposed to a celebration of coffee’s African heritage. One reason is that he only uses beans sourced from the continent. “This coffee shop and my coffee have brought people to Khayelitsha and introduced that city-style coffee culture to my community. The shop is a space for creatives, and we have all the things you will find in town right here,” boasts Dibela. So far, the business has spawned another café location in Cape Town’s leafy suburb of Claremont, and the Khayelitsha shop is the starting point for the township bicycle tours. An Investec study estimates the informal economy contribution to gross domestic product at just over 5 per cent and says township enterprises employ 17 per cent of South Africa’s workforce – earning an average income of R2 000 per month. That informal sector also includes waste pickers, who play a vital role in achieving the country’s environmental goals, as well as supporting their own families.

master’s degree in supply chain management at Stellenbosch University in 2021. “I’ve always thought there could be a better, more efficient way of getting recyclable material into the hands of waste pickers who sell it to make a living. And that is how the two innovative aspects of our idea were conceived,” she continues. At the heart of the solution is a smart trolley with storage compartments and a pull-assist that makes it easier to move the trolley under load. On the community side, there is an app that households can use to request a collection of recyclable material. Together these solutions add up to an ecosystem where waste pickers don’t have to sort through rubbish bins, the community is educated and plays an active role in recycling, and only true waste is sent to landfills. A key part of the smart trolley concept’s success is the community app that will require data connectivity and digital infrastructure to operate. Kayamandi has aligned its smart township ambitions with President Cyril Ramaphosa’s Smart Town agenda, a key talking point in the State of the Nation Address.

Professor Bill Tucker

KEEPING IT IN THE COMMUNITY

Chuma Lalendle

WASTE PICKING GETS SMART An idea to help those people be more efficient in their jobs is what won Chuma Lalendle and Sbahle Mgjima first place and a R20 000 cheque in the #ideasforchange challenge. The pair met at a Smart Kayamandi workshop focused on finding solutions to help the Stellenbosch township of Kayamandi become a connected, inclusive micro-economy. “I wanted to see how what I’ve learnt – the skills and knowledge that I acquired – could actually be transferred to the community I live in to uplift their livelihood,” explains Lalendle, who completed a

There is no concrete evidence of the president’s vision coming into fruition, but initiatives such as Zenzeleni – a community-owned wireless internet service provider spawned out of a University of the Western Cape computer science research group – show definite progress. “Zenzeleni shows that corporates can be socially responsible. We built the solar-powered infrastructure and the code base to manage the system, and the commercial service subsidises the price for ordinary customers,” explains Professor Bill Tucker, who oversaw the development while he was still a Computer Science faculty head at UWC. The network charges the local businesses for access and that cost covers individuals that can then more easily access the business services. The money stays in the community, and everybody can prosper instead of having to take resources elsewhere.

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“A system like that teaches people to teach and creates a peer-to-peer network where everyone is invested,” he says.

Jessica Boonstra

LOOKING AT THE BIGGER PICTURE As our world becomes ever more digital, the township economy will need to rely on interconnected platforms that aren’t necessarily an immediate fit. Jessica Boonstra, founder and CEO of Yebo Fresh (a produce and grocery supplier to township businesses), learnt the eKasi market dynamics the hard way. “We started by trying to deliver groceries to people in the township and then realised that we weren’t getting traction because we were bypassing the existing spaza shop ecosystem,” she shared with a full theatre of start-up founders at an inaugural Startup Club ZA event for the Cape Town chapter. “Even delivering to spaza shops wasn’t enough to build a sustainable business, until one of the local shisanyama owners asked me where I was buying product from. I could offer her a better deal than she was getting at the cash-and-carry and deliver to her premises. That’s when I had a business,” says Boonstra. Kasinomics is the mass market in South Africa and has evolved into a growing ecosystem of local suppliers operating on platforms and supply chain networks that have been adapted to serve the needs of the community.

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What is Bizniz in a Box (BiB)?

BiB launched in 2015 to help transform aspirant entrepreneurs, including women and youth, into fully-ﬂedged business owners who can create a livelihood for themselves and others.

The impact of BiB? BiB has ﬁnancially supported and provided training to over 700 entrepreneurs across the country. CCBSA has rolled out around 758 containers, 400 being youth.

Did you know?

Why BiB?

In 2022, fourteen young South African SMMEs won a fully equipped BiB mobile kitchen or container all worth R1,316,000 during a Youth Month competition across SA.

It supports SMMEs with upskilling through infrastructure support, working capital investments, tools and training.

BiB beneﬁciaries must have skills such as basic ﬁnancial management, bookkeeping, marketing and preparing a business plan.

FOOD TRUCKS & HAWKERS

CARWASH & TSHISANYAMA

FAST FOOD & RESTUARANTS

CATERING & BNB

GROCERIES

CCBSA has spent more than R120 million towards BiB initiatives in several townships across South Africa.

GET IN TOUCH WITH US Business owners can apply on our website https://www.ccbsabco.com, call us on 011 848 2600 or email CCBSAYEP@ccbagroup.com. Criteria: South African Citizen

Minimum of 2 years operating a business

Aged between 24 – 54 years

COCA-COL A BE V ER AGES S OU T H A F RICA A DV ER T ORI A L

YOUTH MONTH COMPETITION TO GROW SMALL FOOD VENDOR BUSINESSES CCBSA is committed to supporting township businesses

Images: Supplied

oca-Cola Beverages South Africa (CCBSA) is calling for applications for a Youth Month Competition in Gauteng, in partnership with the Department of Economic Development. CCBSA will hand over 8 Mobile Kitchens and equipment to the Value of 80 000 each and beverage entrepreneurs. This forms part of CCBSA’s objectives to stimulate the economic inclusion of youth and women in townships and vulnerable communities through its Bizniz-in-a-Box (BiB) initiative. Aspiring entrepreneurs aged 22–35 living in informal areas in Gauteng are invited to submit their applications, including a motivation for why they should be awarded a mobile kitchen, to the WhatsApp number 083 778 3297 during Youth Month. Winners will be announced at the end of June 2023. “Bizniz-in-a-Box is a CCBSA initiative aimed at stimulating economic viability and independence for entrepreneurs in the township economy,” says Pirtunia Dhlamini, CCBSA’s public affairs, communications and sustainability manager for the Gauteng region. “It supports black youth- and women-owned businesses that address the needs of their community. These small businesses play a big role in growing the township and rural economies,” she adds. BiB is now in its seventh year and has supported over 700 entrepreneurs across several provinces. CCBSA has invested more than R120-million in BiB initiatives. With the country’s unemployment rate showing no signs of improvement in the short term, coming in at 32.9 per cent for quarter 1 of 2023, according to StatsSA, and the unemployment numbers for young people continuing its upward trajectory, the BiB programme aims to help reduce youth unemployment and associated poverty levels and inequality by providing

CCBSA HOPES THAT WITH THE SKILLS TRAINING AND MOBILE KITCHENS PROVIDED THROUGH THE YOUTH MONTH COMPETITION, THE YOUNG BUSINESS OWNERS WILL DEVELOP THRIVING BUSINESSES THAT WILL CREATE MORE JOBS IN THE FUTURE. opportunities for entrepreneurs to sustain and grow their businesses. CCBSA hopes that with the skills training and mobile kitchens provided through the Youth Month Competition, the young business owners will develop thriving businesses that will create more jobs in the future.

COMPETITION CRITERIA AND PRIZES Applicants must be South African business owners aged between 22 and 35 with a minimum of two years of operation in the fast-moving consumer goods industry, for example, fast food, groceries, car washes.

Competition terms and conditions The candidate must reside and operate in the targeted areas. The candidate must be able to submit all the necessary documents as per request. During the handover of the mobile kitchen, the candidate must bring their vehicle to transport the mobile kitchen from the venue. Each mobile kitchen winner will have to register it at their local traffic department within 14 days from handover. The winners will take on the responsibility of ensuring that all their registration documents are kept safe in case of fire or theft. The winner is expected to be operational within four weeks of the winners being announced.

Prize option 1: Mobile kitchen Applicants will need to have their business operating for at least two years. They must possess a trading permit. Prize option 2: Renovation of existing structure Applicants will need to have their business operating for at least two years. They will need to have access to water and electricity. They must possess a trading permit.

Scan this QR code to go directly to the Coca Cola website.

For more information: www.ccbsaco.co

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COLLABORATION AND PARTNERSHIPS For aspiring entrepreneurs, the leap from creating a fledging livelihood to running a sustainable business requires support for the business to thrive and unlock its full potential, writes VUKANI MAGUBANE

BIZNIZ-IN-A-BOX

love our brands, and this is one way we can izniz-in-a-Box (BiB) – a Coca-Cola give back and grow the township Beverages South Africa economy,” Dhlamini explains. (CCBSA) initiative – is With the country’s unemployment providing much-needed rate showing no signs of support for young improvement and the unemployment people and women to revitalise numbers for young people and grow economic activity in continuing its upward trajectory, the the townships. BiB programme aims to help reduce “Bizniz-in-a-Box is CCBSA’s youth unemployment, poverty ongoing commitment levels and inequality by providing to stimulate economic opportunities for entrepreneurs to viability and independence Pirtunia Dhlamini sustain and grow their businesses. in the SSME sector in the township economy,” says Pirtunia Dhlamini, CCBSA’s public affairs, OPENING DOORS FOR ENTREPRENEURS communications and sustainability manager for Bizniz-in-a Box is now in its seventh year and the Gauteng region. has supported over 700 entrepreneurs across “The initiative is designed to help build and several provinces, including Limpopo, Gauteng, grow township and rural economies by Mpumalanga, Eastern Cape and KwaZulu-Natal. developing black youth- and women-owned It has provided 758 containers including 400 for businesses that are responsive to the needs of young entrepreneurs and has spent more than their community,” she adds. R120-million rand on BiB initiatives. The programme is one of the company’s The support provided fits the needs of the three pillars for its framework for economic entrepreneur’s business model and the type inclusion strategy, particularly for women and of business they are running – whether it is a youth. “The townships are our customers, they spaza shop, restaurant, salon, car wash or a

“WE WANT TO FIND YOUNG PEOPLE WHO WANT TO START THEIR BUSINESSES AND PROVIDE THEM WITH A DIGNIFIED WAY TO PARTICIPATE IN THE ECONOMY.” – PIRTUNIA DHLAMINI

fast-food outlet near a school or workplace. The infrastructure provided to qualifying candidates can comprise mobile containers, mobile kitchens, and infrastructure renovations. Entrepreneurs in the programme receive support with upskilling and working capital investments. These small businesses are formalised as part of the programme, which opens doors for them to seek additional funding to grow. “A rep from CCBSA helps the business owner determine what products and equipment they need and if the business needs refurbishment to help attract customers and gain a competitive advantage. They become CCBSA customers,” Dhlamini says. “We want to find young people who want to start their businesses and provide them with a dignified way to participate in the economy,” she adds.

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SMME S

EQUIPPING AND EMPOWERING ENTREPRENEURS

Images: Supplied

vbob Mutual Assurance Society has been providing funeral insurance and burial services to grieving families for over a century, offering support and care when they need it most. Founded in Bloemfontein in 1918, the company has grown to become Africa’s largest mutual society and prides itself on being deeply rooted in the communities where it operates. According to Malixole Gwatyu, the company’s communications manager, Avbob’s business model supports entrepreneurs who provide services to our parlours in the township and rural areas with the required infrastructure and no capital outlay. Avbob has three operating divisions – Avbob insurance offers customers a comprehensive range of funeral policies, Avbob funeral services offers a one-stop, affordable funeral service, and Avbob industries, based in Bloemfontein, manufactures coffins and funeral ware. Avbob operates on a mutual basis and ownership of the company is with its members. The company has over 350 branches across the country with a significant number of these

branches located in townships, where they promote economic activity, job creation and entrepreneurship.

ANCHORS IN THE COMMUNITY Gwatyu says these entrepreneurs become anchors in their communities as they offer support and empathy to families. He cites the example of Josephine Mahamba, who became an Avbob funeral agent in 2016 in Mamelodi and how she has immersed herself in that community. She has consoled many families and arranged hundreds of funerals in Mamelodi. “Avbob spends approximately two million rand per entrepreneur to fully equip them with all the necessary equipment and training and know-how to render a professional service to their communities,” he adds. There is a multiplier effect as the entrepreneurs employ, on average, a further eight people from the local community permanently. They also use other local business people to source services and products, such as catering equipment, house tents, printing services, flowers and transport.

“Our clients require several products and services when a funeral is arranged, some that Avbob does not provide. We refer to such services as noncore services. These noncore services that emanate from Avbob funerals continue to support and sustain thousands of entrepreneurs and their families in their respective areas,” Gwatyu explains. Through these noncore services, Avbob supports local businesses by actively seeking suppliers and service providers within townships. Through this partnership, it stimulates economic activity and promotes the growth of small businesses that are the backbone of the township economy.

“AVBOB SPENDS APPROXIMATELY TWO MILLION RAND PER ENTREPRENEUR TO FULLY EQUIP THEM WITH ALL THE NECESSARY EQUIPMENT AND TRAINING AND KNOW HOW TO RENDER A PROFESSIONAL SERVICE TO THEIR COMMUNITIES.” – MALIXOLE GWATYU TOWNSHIP ECONOMY

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HARNESSING TECHNOLOGY TO EMPOWER SOUTH AFRICA’S INFORMAL ECONOMY BRENDON PETERSEN writes that education and access are key to empowering the informal economy

he township economy in South Africa plays a crucial role in the country’s overall economic landscape. But while technology’s potential to enable and empower this sector has yet to be explored extensively, there are promising avenues for leveraging technological advancements to support its growth. By providing access to new markets, enhancing supply chain management and streamlining operations, technology can help small-scale township businesses thrive.

TECHNOLOGY AS AN ENABLER OF THE INFORMAL SECTOR The high unemployment rates and limited scalability of businesses in townships call for innovative solutions, and technology can play a pivotal role in addressing these challenges. By leveraging technology, township businesses can access new markets, both within and beyond their immediate communities. Online platforms and e-commerce can provide a gateway to larger customer bases, allowing businesses to expand their reach and increase sales.

Furthermore, technology can optimise supply chain management, improving efficiency and reducing costs. Streamlining operations through the use of digital tools can enable township businesses to compete on a more level playing field.

THE IMPACT OF COVID-19 Luvo Grey, managing director at EC Internet, says there’s been a significant shift in the adoption of internet services in informal communities post-COVID-19. “Before COVID-19, the biggest problem was convincing people that it’s better and more cost-effective to have Wi-Fi in your household than to be paying subscription fees for television. In most townships, you’re dealing with people that come from very low-income households. Those are the people who generally don’t have as much cash lying around to purchase something as unimportant to them, at that time, as internet access.” About the impact of internet access on low-income households and informal

Luvo Gray

settlements, Grey says: “Most of the content consumed on our network was coming from YouTube, Facebook and WhatsApp. Now we’re starting to see some using trading platforms, such as Easy Equities. We still see a demand for more positive recreational platforms, but we’re also seeing an increase in traffic to sites, such as Coursera where people can learn, and sites where they can trade and buy stocks online.” Grey says that 95 per cent of the users of EC Internet access the internet through their handheld devices.

THE NEED FOR ADAPTABILITY Payment platform Yoco says that in the informal market, it sees businesses of every size and therefore the needs of customers in townships vary greatly.

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T ECHNOL OGY

DIGITAL INSURANCE SOLUTION FOR MICRO AND INFORMAL BUSINESSES ONLINE PLATFORMS AND E-COMMERCE CAN PROVIDE A GATEWAY TO LARGER CUSTOMER BASES, ALLOWING BUSINESSES TO EXPAND THEIR REACH AND INCREASE SALES. This means that they need to meet customers where they are in their journey. While, for some customers, that may just mean providing fast, secure payments via a card machine, it can also evolve into customers needing more as they grow. In that instance, Yoco helps them manage stock and sales via the Yoco App. A spokesperson for the company says: “A key product for a business in the informal market is Instant Payouts, and we have seen the value of this product in driving growth for businesses that need access to their money as they make it.”

Images: istock.com/GaudiLab, istock.com/ROGER YEBUAH, Supplied

THE IMPORTANCE OF EDUCATION Cisco, the United States-based multinational technology company, has realised the importance of technology education when it comes to empowering start-ups and small, medium and micro enterprises (SMMEs), whether it be in the formal or informal sector, and created Conrad Steyn EDGE Centres to help educate and empower entrepreneurs and bridge the knowledge and skills gap. Conrad Steyn, CTO at Cisco sub-Saharan Africa, says: “The key things we saw in the current economic landscape in South Africa for start-ups and SMMEs was a lack of access to technology and skills development as well as a lack of incubation programmes and facilities. There’s also the issue around finance and obtaining credit in the South African market and access to experts and new markets and how they develop relationships with customers.”

Santam and MoyaApp join forces to bring an affordable, quality formal insurance solution to informal businesses and the township economy, writes GLORIA TAPON-NJAMO, acting CEO of Santam’s Partnership Solutions

outh African short-term insurer Santam has launched a digital insurance solution for micro township enterprises, providing these businesses with financial security and recovery in the event of a loss. The small, medium and micro enterprise (SMME) sector is an important growth engine for the South African economy. Yet the need for greater support in creating a more enabling environment has never been stronger, with recent statistics from a comprehensive study by the University of the Western Cape revealing that 70–80 per cent of local small businesses fail within the first five years.

REACHING THE UNINSURED Against this backdrop, Santam, in partnership with MoyaApp, has launched a fully digital Emerging Business Insurance solution to support the flourishing township enterprise sector. Santam has recently refreshed its strategy, which, among others, prioritises the use of digital platforms to connect with policyholders, reaching out into new market segments, including the uninsured sector, such as township enterprises, and supporting efforts aimed at narrowing the risk protection gap. Santam’s innovative entry-level digital insurance solution offers three cover options at different price points: the starter solution at a monthly premium of just R75, the standard option at R125 per month and the premium solution for R195 monthly. All options offer protection for stock and contents (due to fire, explosion, acts of nature, malicious damage and impact of objects), personal accident (the enterprise is compensated in the event of the owner’s death or permanent disability) and political riot (F4 SASRIA cover), with the value of cover for each risk increasing relative to the package. The standard and premium cover options also offer cellphone insurance for the business owner’s smartphone – an essential tool to ensure business continuity for township entrepreneurs who often run their entire operation from their phone. However, the SASRIA cover is perhaps the most important feature of the Santam Emerging Insurance solution. Each package provides up to R500 000 of cover for special risks, such as civil commotion, public disorder, strikes, riots and terrorism.

Township enterprises face many challenges, including a lack of access to finance, skills scarcity and the prevalence of crime in some areas. Being insured can have far-reaching benefits. For instance, many businesses were affected by the July 2021 riots, many of them small-scale township businesses that never reopened. Insurance solutions for the emerging market are therefore a very necessary level of protection against such systemic risks. Sadly, most township businesses simply do not have the means to withstand a loss and are forced to shut down. Most township micro businesses can’t access funding because financiers have no guarantee they can continue repaying their debt if something goes wrong, such as a fire or theft. Having access to affordable, quality, formal insurance should make them more appealing to financiers and enhance their growth potential and power to create more jobs However, most critically in the short term, it will allow them to stay in business in the event of any unforeseen risks or interupptions. AVAILABILITY The Santam Emerging Business Insurance product is available to MoyaPay clients. Businesses with an annual turnover of up to R2-million qualify for the Santam Emerging Business product. The processes, from the inception of the policy to the lodging of claims, is managed entirely data-free through the MoyaApp. Due to many emerging businesses being in rural or informal residential settings with no formal location – which insurers usually need to provide cover – the MoyaApp is able to pinpoint a person with no fixed or accurate address through an identifiable geo-mapped location finder. We are extremely proud to have developed this digital insurance solution that caters to the needs of underserved and financially excluded entrepreneurs. The Emerging Business Insurance solution is an important addition to Santam’s Commercial Insurance offering and allows us to offer quality insurance to businesses at every stage of development.

Gloria Tapon-Njamo

ABOUT SANTAM

ABOUT THE MOYA AP

UNIVERSITY OF THE WESTERN CAPE STUDY ON ENTREPRENEURS

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A DV ER T ORI A L S TA NDA RD BA NK

TURNING ENTERPRISE DEVELOPMENT POLICY INTO PRACTICAL TOOLS FOR ENTREPRENEURS Standard Bank’s enterprise development division aims to give practical force to South Africa’s Broad-Based Black Economic Empowerment Act 53 of 2003, writes NALEDZANI MOSOMANE, Head of Enterprise Development at Standard Bank South Africa

SMALL BUSINESS SEGMENT CHALLENGES

n alignment with the 2030 National Development Plan (NDP), the Broad-Based Black Economic Empowerment Act identifies small and medium enterprises (SMEs) as one of the key enablers of broad-based growth and transformation in the South African economy. As an African bank committed to driving the continent’s growth, Standard Bank has long recognised that for South Africa to achieve economic and social development, the country needs a dynamic and resilient SME ecosystem providing effective access to funding, markets and business development, especially for previously disadvantaged entrepreneurs. Economic development is a multidimensional process involving economic growth, improvement

economies such as China, or successful emerging economies such as Rwanda, or even rapidly growing frontier economies such as Ethiopia, small businesses account for the greatest segment of gross domestic product (GDP) contribution, employment and innovation. In China, for example, more than 98 per cent of all firms are small businesses with 300 or fewer employees. These small businesses contribute over 60 per cent of China’s GDP, 50 per cent of China’s tax income, 75 per cent of China’s jobs and 68 per cent of China’s exports.

in quality of life and structural transformation of the economy. As broad-based employers contributing to alleviating poverty through job creation, SMEs are particularly relevant to growth and improved quality of life. As a source of innovation and competition, they are also critical to structural transformation Whether one looks at established economies such as the United States, newer global

ECONOMIC DEVELOPMENT IS A MULTIDIMENSIONAL PROCESS INVOLVING ECONOMIC GROWTH, IMPROVEMENT IN QUALITY OF LIFE AND STRUCTURAL TRANSFORMATION OF THE ECONOMY.

Against these numbers, South Africa’s small business segment continues to underperform, held back by a lingering divide between formal urban enterprises located close to developed business hubs and less formal, historically excluded, peripheral enterprises located in townships, informal settlements or among rural communities. While South Africa has developed legislation to bridge this divide and reverse the legacy of exclusion to grow the country’s small business segment, many interventions to date have lacked practical force. Without infrastructure able to assist small businesses with the practical realities of setting up, accessing funding, developing skills, operating effectively, connecting and growing, our country’s SMEs will struggle to become the

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S TA NDA RD BA NK A DV ER T ORI A L

driving force for growth and inclusion that they are in other economies. By addressing the distance between small and peripheral township enterprises and the formal economy as well as the disadvantages of historical exclusion, Standard Bank’s enterprise development (ED) ecosystem provides the infrastructure for entrepreneurs to overcome the access, skills and resources, and finance hurdles currently challenging SME formation in South Africa.

ENTERPRISE DEVELOPMENT INITIATIVES TO THE RESCUE Most of Standard Bank’s ED initiatives revolve around addressing informality by, for example, assisting small emerging enterprises with formal business registration, building adequate payment channels, and developing business capabilities by providing access to technology and advice. The bank also creates links to other small enterprises that provide the skills and services SMEs need. While Standard Bank supports and enables all businesses across various life stages, we also understand that to achieve transformation, we need to be deliberate and focused in ensuring that black-owned SMEs transition into sustainable enterprises capable of supporting broad-based growth and driving general economic inclusion in South Africa. Many black-owned businesses face unique challenges in accessing funding, market access and resources. To mitigate these challenges, Standard Bank’s ED offering includes tailored funding solutions and developmental support mechanisms that aim to unlock opportunities for qualifying blackowned businesses with a turnover of less than R50-million.

QUALIFYING CRITERIA

Images: Supplied

Against this backdrop, businesses qualifying for Standard Bank ED support should: • Be 51 per cent or more black-owned (broad-based black individuals who are South African citizens). • Trade within South Africa with the majority shareholder a black South African citizen. • Have a total annual revenue of less than R50-million and, ideally, under R10-million. • Be represented by a director with shareholding, dedicated full-time to the business. • Be registered as valid B-BBEE enterprises with at least 51 per cent black ownership. This cannot be in the form of black beneficiaries as

Naledzani Mosomane, Head of Enterprise Development at Standard Bank South Africa

Each business owner is being mentored by one of four carefully selected, fierce business luminaries. in the case of nongovernmental organisations or nonprofit organisations. Based on these criteria, Standard Bank’s ED team is currently running needs-based business development programmes delivered by its own advisers and selected experts. Providing hundreds of qualifying businesses with the skills to grow and become sustainable. Examples include: • The Basali Development Programme – a nationwide 12-month empowerment initiative in its second year supporting 100 women-owned businesses from a variety of industries with skills development and thoughtleadership masterclasses. • The Standard Bank Western Cape Accelerator Programme – a 12-week growth course supporting 50 businesses in the Western Cape across various industries with skills development and mentorship. • The Standard Bank Enterprise Development Programme – a 12-month business development partnership aimed at supporting 10 businesses in various sectors with skills development and coaching.

The ED team also works with smallholder farmers to commercialise their operations in partnerships with internal specialist and development service providers. Standard Bank’s ED ecosystem also provides a great platform to test initiatives that have been scaled within Standard Bank to benefit small enterprises. Examples include: • A crowdfunding initiative in partnership with Thundafund, one of Africa’s leading crowdfunding platforms. This initial ED collaboration has, today, evolved into a permanent alternative funding mechanism, allowing small enterprises to create promotion campaigns and receive crowdfunded contributions from the public. • A skills development programme in partnership with Thinkubate Academy, an online business skills development platform allowing small enterprises to access masterclasses and practical learning tools covering a range of business management subjects. The academy aims to equip small business owners with the skills and tools they need to manage their enterprises effectively at every stage of their business growth journey. By looking beyond just banking to also consider how we can partner with clients to deploy the bank’s end-to-end ED support ecosystem, we can say yes to businesses more often because we are intimately involved in their success beyond their banking. A larger and more robust small business segment in South Africa will increase employment, enabling more South Africans to support themselves and their families. As such, the vision of our ED support ecosystem in giving practical force to government’s broad-based black economic empowerment legislation is to see fewer people rely on national government for welfare grants and other social services. A thriving small business sector will also broaden the tax base and increase national revenue, demonstrating the important role the private sector can play in achieving national development goals.

BENEFICIARIES AND PARTNERSHIPS In 2022 alone, Standard Bank’s ED ecosystem allocated over R30-million to 547 businesses creating 1 388 jobs. A full 220 of the businesses assisted under the ED programme were woman-owned. Scan this QR code to go directly to the Standard Bank website.

STANDARD BANK’S ED OFFERING INCLUDES TAILORED FUNDING SOLUTIONS AND DEVELOPMENTAL SUPPORT MECHANISMS THAT AIM TO UNLOCK OPPORTUNITIES FOR QUALIFYING BLACK-OWNED BUSINESSES WITH A TURNOVER OF LESS THAN R50-MILLION.

For more information: www.standardbank.com

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FINANCIAL INCLUSION NOW!

NALEDZANI MOSOMANE CA(SA), head of enterprise development South Africa, and LESIBA MATLADI, head of trader propositions South Africa, at Standard Bank South Africa, share that the economic power of the township economy is upending how businesses in the informal sector are integrated into the mainstream economy

usinesses in townships have long been overlooked and, as a result, financial inclusion remains skewed. Many people remain underbanked or unbanked. According to the World Bank, as many as 12 million South Africans do not have a bank account, and others have limited access to banking. The World Bank and other organisations have openly stated that it is essential that South Africa increases financial inclusion to arrest the use of cash, reduce inequality and kick-start financial growth. The township economy is fertile soil for South Africa’s economic growth, so it makes sense to address financial inclusion here so that township business owners and consumers can access useful and affordable financial products and services that meet their specific needs – transactions, payments, savings, credit and insurance.

THE BANKING DILEMMA The township economy is part of the mainstream economy, but often not seen as such because the money generated here is not accounted for in the formal banking sector and does not get considered when economic growth in the country is measured. This lack of financial inclusion has led to many international agencies raising concern about the number of unbanked people in the country. And South Africa’s recent Financial Action Task Force greylisting is a clear Naledzani Mosomane indictment of this.

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T HOUGH T L E A DERSHIP: S TA NDA RD BA NK

Lesiba Matladi

But the conundrum for the banking sector is that it’s difficult to determine, for instance, what services or credit options are available to people who don’t have any proof of financial earnings. Banks need to apply rules for opening a bank account before the appropriate services needed can even be determined.

Images: istock.com/SouthWorks, istock.com/monkeybusinessimages, Supplied

THE BENEFITS OF INCLUSION There is no doubt that bringing the informal sector into the mainstream economy is essential for our country’s economic growth and for individual households to be able to change their day-to-day lives. Having a bank account and financial service offerings enables people to do this and allows them to plan for a better future: to save, acquire assets and access credit. Services that businesses and people active in our mainstream economy enjoy must start to trickle down to the informal sector. We must begin to tailor solutions for businesses in unique environments where a very particular set of needs exists. As we began to move into a more digital space, Standard Bank intuitively felt that it was the perfect vehicle to tailor solutions that could help the township economy thrive. So, we looked beyond the banking component and asked how we could enable businesses and individuals within these township economies with other types of solutions. For instance, how do we look at stock-ordering for these clients? How do we enable them to get more foot flow into their businesses? The digital components allow us to bring more focus and do a lot more for and within this market segment.

WHY GET INVOLVED? There are many reasons why it makes sense for Standard Bank to get involved in the township economy. As a bank, we support the development of the communities we serve, so we are aligning our trader strategy and our enterprise development strategy to enable us to provide financial education to these clients. We want to help them improve their ability to get access to credit and other resources, and we also want to empower those township entrepreneurs to grow sustainable businesses. Businesses need to drive economic growth beyond the townships, and once they become

THE TOWNSHIP ECONOMY IS FERTILE SOIL FOR SOUTH AFRICA’S ECONOMIC GROWTH, SO IT MAKES SENSE TO ADDRESS FINANCIAL INCLUSION HERE. part of the formal banking strategy, we can then account for them in terms of our country’s economic growth. There is a huge opportunity for us as a bank to reach previously unbanked people. It is almost an untapped market and a way for us to grow our base. But more than that, it’s an opportunity for us to help foster, support and invest in the sustainable development of our economy and the growth of our local communities.

INNOVATION FOR GROWTH Standard Bank has a number of strategies to help township businesses: we are rolling out several payment solutions in July, starting in Gauteng and the Western Cape. These include an Instant Money Wallet and our MyMoBiz solutions. With these services, township businesses can accept payment from their customers wallet-to-wallet and can also make wallet-to-wallet payments to their suppliers. The MyMoBiz solution provides access to a low-cost R5 account, and we’re also enabling township businesses to order stock remotely through our partners, with delivery happening within 24 hours. Additionally, we’re also working on a lending solution. All these solutions will create a track record for the entrepreneur. We can use this tracked information to create a lending product solution for them. Other payment mechanisms we can offer include merchant devices and business skills and financial literacy training, which we hope will enable our entrepreneurs to build sustainable operations.

WHAT STILL NEEDS TO HAPPEN Government and other corporates can do many things to help develop the township economy. Improve infrastructure: infrastructure, such as roads and digital networks, really impact the ease of doing business. Bring business to the township: corporates need to think about how they can bring business into the townships. We all want to build our office parks in the suburbs, but there is probably merit in going to where most of the people who would occupy those buildings sit. We need to bring more formalised economic activity to the townships. Regulations and red tape: government needs to rethink all the regulations with which businesses must comply. We need to relax some of those stringent conditions to enable businesses to do what they need to do. Load shedding: many businesses within the township probably cannot afford a generator or an inverter. How can the banks, other major corporates and governments help enable access to alternate sources of electricity?

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18 - 20 JUNE 2023 Gallagher Convention Centre, Johannesburg, South Africa #SAITEXAFRICA

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ENTERPRISE ANd EmERgINg ECONOmIES

120+

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mUST ATTENd EvENT

Free to attend workshops

Access to the township economy

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Many advertisers are turning to spaza shops to market their brands.

IN YOUR FACE AND OUT OF HOME The out-of-home advertising medium is hugely popular in South Africa’s townships. Not only does outdoor advertising resonate in hyper-local markets, but it also contributes to the economic development of small businesses, writes GLENDA NEVILL

undreds of billions of rands are spent annually across South Africa’s townships, making it a prime target for brands wanting to tap into its serious spending power. As an in-your-face medium, out-of-home (OOH) advertising is the way to reach those millions of consumers who live, work, commute, shop and play in the country’s many townships. In the Rogerwilco The 2022 South African Township CX Report, the authors report that almost half of South Africa’s urban population lives in townships, with the number rising to above 60 per cent in areas such as Cape Town. “While unemployment is rife and household income low, in aggregate the township market represents hundreds of billions of rands of spending power. Yet little publicly available data exists to help marketers better understand how to tailor their messaging to speak to the needs and wants of this substantial audience,” they write.

THE VALUE OF DATA In chapter four of the report, Vuleka CEO Brian Makwaiba says brands will find ways to interact directly with spaza shops “because of the unique customer data that is available at these informal outlets. Understanding the influential players within the kasi economy will go a long way in enabling marketers to engage effectively with township residents”. Data collection at spaza shops is one thing. They’re also a primary location for out-of-home advertising. Spaza branding is one of the most popular types of out-of-home advertisingin townships. Makhetsi Phakoa, head of client service and sales at Proactive, a division of Provantage, says spaza

shops are central to their communities and usually situated in high-traffic areas. “As such, people see this advertising almost every day, either when they go shopping or while passing by.” So, it’s not surprising that, according to database and research company Target Group Index’s 2021 annual report: • 53.2 per cent have seen spaza branding. • 44.7 per cent use township spaza shop branding for important news or information. Provantage has launched a special Spaza Media (it is a company within Provantage) division to handle this burgeoning market. “What excites me most about this new product is being able to offer a media solution that allows brands to support sustainable businesses and uplift communities while getting an impactful message across,” Phakoa writes in a thought leader on the sector published in The Media Online. She adds: “It is not only of benefit to the brand, but also serves spaza owners, who receive consistent media rentals and a revamped storefront, while developing and sustaining black-owned township small and medium enterprises, responsible for managing rentals, store branding and maintenance – ensuring that branded storefronts look good throughout campaigns.”

A COLOURFUL BACKDROP Wall murals, street pole posters, billboards, container billboards, building wraps, spaza branding, wall wraps and even digital out-of-home campaigns provide a colourful backdrop to the bustling commercial spaces.

Lebona Moleli, whose Marketing Kraal out-of-home company operates in Gauteng townships, believes out of home impacts the township communities in three ways. “Firstly, the media owners pay landlord fees to the owners of the sites such as wall murals or spaza shops. Secondly, we use local artists to create wall murals, putting money in their pockets. And finally, artwork on the media platforms makes the townships beautiful and lively,” he says. And, he adds, there’s a major return on investment for advertisers too. “Township media, such as wall murals, are very cost-effective, but impactful Lebona Moleli in terms of reach, therefore the advertiser always gets value for money,” Moleli says. Ruchelle Mouton, group head of marketing and services at Tractor Media Holdings, says that at a macro level, “all out-of-home advertising – whether in townships or urban areas and central business districts – contributes to municipality revenue that is reinvested into community development. “Economically, OOH also contributes to landlord rentals, meaning it directly stimulates money flows into communities and enterprise development and entrepreneurship. OOH also creates employment opportunities within communities as people from the community are

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often employed in operational roles to execute, manage and maintain campaigns,” Mouton says.

Images: Supplied

THE LOCALISATION ANGLE People on the ground, and localisation, are something Provantage specialises in. Its Field Force division has 4 500 field representatives nationally, operating across informal markets, ranging from Matatiele to Kwanobuhle and everywhere in between. They have been recruited from peri-urban areas and trained to connect brands with consumers. They manage all activities involving face-to-face contact with shoppers. Localisation is an essential aspect of township marketing, says Mouton. “Out of home offers brands direct access into the heart of communities, and its hyper-local nature offers the most targeted forms of advertising available. Through a combined use of first- and third-party data, OOH offers laser precision targeting. And combined with technology, OOH offers the ability to drive contextual creative executions,” she explains. “For example, a key aspect of localisation is that you can tailor your creative to tap into the nuances of a specific location for higher brand resonance and contextual relevance. Digital OOH media allows for extreme flexibility and possibilities in localisation, ranging from seamless multiple creative execution across different locations to changing up call to actions based on regional sales data – in other words, you can push price and product promotions that are tailored to store location sales performance to directly influence purchases. “You are also able to target locations based on other relevant contextual information, such as weather triggers, distance to a store, a local event and sport scores, that allows brands to not only reach audiences in the right place, but also reach them in the right time and the right moment to shift mindsets and increase purchases.” While Tractor doesn’t mount major operations in townships, the company has leveraged its digital out-of-home network for the benefit of communities. It’s #SMEHeroes campaign during the COVID-19 pandemic was one, and another is the ongoing relationship with Missing Children South Africa. One of its initiatives is enabling the mass communication power of digital out of home to flight missing child notices within minutes of being alerted to a disappearance. As Simon Wall, CEO of Tractor, says, a sense of community, elevated by the pandemic, has changed the behaviour of the out-of-home industry. Media owners are increasingly “shape-shifting into social enterprises, using their influence, commercial strategies and resources to address socioeconomic challenges”.

IN PRAISE OF THE BILLBOARD Primedia Outdoor’s JORJA WILKINS gives the lowdown on out-of-home advertising in the townships that they have witnessed in With targeted engagement, other markets. This growth amplified brand visibility will continue over the next and a focus on community few years because of the identity, out-of-home benefits it offers advertisers, township advertising including the flexibility it opens up new avenues for allows for dynamic content. connecting with township In addition, RankTV’s digital audiences and achieving screens offer commuters marketing objectives. engaging content, while Outdoor Auditor reports advertisers can benefit from February 2023 reckon from the high dwell time the township and rural and engage for longer economy represents Jorja Wilkins with audiences. 35 per cent of the total out-of-home (OOH) GIVING BACK advertising market in terms of Activations have a significant impact on the number of billboards. Townships work opportunities for the community, on their own represent albeit mostly of a temporary nature due to 21 per cent of all billboards. their time-bound nature. The demand for Billboards are particularly impactful activations has led to the establishment of as they deliver long-lasting affinity to numerous promotions companies catering brands. Their prominent presence and for the temporary staffing requirements of large format make them memorable. various brands and organisations. Billboards offer high reach, allowing There are instances where they can advertisers to communicate with a wide result in long-term agreements, such as audience in areas where other media the establishment of kiosks and pop-up types may struggle to reach and engage shops, that may eventually lead to consumers effectively. full-termlease agreements. Moreover, billboards are praised for Furthermore, product launches and other championing brand transparency and event-based activations generate work authenticity, which is increasingly valued opportunities within the local areas where by consumers. OOH advertising they are hosted. Brands can hire promoters meets this demand by delivering and brand ambassadors from local clear and straightforward messaging communities to represent and promote to consumers. their products or services. Billboards also play a crucial role in Free Wi-Fi and call-to-action incentives. promoting public safety. For instance, such as QR Codes and USSD codes on an responsible driving communications and out-of-home structure, are excellent missing person alerts can enhance road examples of advertisers using the safety and bolster community security. environment to give back to the community. Increased customer THE EMERGENCE OF DOOH engagement drives consumers online Outdoor Auditors report digital out of or to take action. This, in turn, helps home (DOOH) growth has largely been marketers measure their success with in the primary urban areas of Gauteng the ability to track the QR/USSD over the past decade, with townships scans in a dynamic form. only representing 14 per cent of total By connecting with consumers on digital screens in South Africa. a hyper-local level and establishing However, recently we have started long-term connections within communities, to see the development of digital brands have leveraged visual messaging out-of-home taking shape in key and strategic placement to establish townships in South Africa, with themselves as trusted and relevant to advertisers recognising the opportunity these audiences. to utilise the benefits of this medium

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The National Energy Regulator of South Africa (NERSA) ensures the orderly development of the energy sector, mainly through licensing, setting and approving of prices and tariffs, compliance monitoring and enforcement, and dispute resolution in the electricity, piped-gas and petroleum pipelines industries. NERSA endeavours to be more innovative and agile in ensuring that we continue to make a valuable contribution to the socio-economic development and prosperity of the people of South Africa, by regulating the energy industry in accordance with government laws, policies, standards and international best practices in support of sustainable development. NERSA is a regulatory authority established as a juristic person in terms of section 3 of the National Energy Regulator Act, 2004 (Act No. 40 of 2004). NERSA’s mandate is to regulate the electricity, piped-gas and petroleum pipelines industries in terms of the Electricity Regulation Act, 2006 (Act No. 4 of 2006), Gas Act, 2001 (Act No. 48 of 2001) and Petroleum Pipelines Act, 2003 (Act No. 60 of 2003). NERSA’s mandate is further derived from written government policies and regulations issued by the Minister of Mineral Resources and Energy. NERSA is expected to perform the necessary regulatory actions in anticipation of and/or in response to the changing circumstances in the energy industry. The Minister of Mineral Resources and Energy appoints Members of the Energy Regulator, comprising Part-Time (Non-Executive) and Full-Time (Executive) Regulator Members, including the Chief Executive Officer (CEO). The Energy Regulator is supported by staff under the direction of the CEO.

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