Government reaffirms support for rural, township economies

To improve access to information and bring economic infrastructure support closer to township and rural-based enterprises, government is expanding incubators and digital hubs to townships and rural areas, says President Cyril Ramaphosa.

“We are also ensuring that small businesses benefit from spatial interventions like industrial parks, business centres and special economic zones.”

He notes that many provinces in South Africa are coming up with innovative support mechanisms, such as the Johannesburg Development Agency’s upgrade of the infrastructure in the downtown fashion district area, which has attracted small, medium-sized and microenterprises (SMMEs) in clothing wholesale, retail and manufacturing.

“The global economy is transforming, and going green and digital. While big business is finding ways of adapting, our SMMEs are shifting ground with creative innovative businesses,” he notes.

This year, renewable-energy sector startup Lamo Solar has completed a solar photovoltaic mini-grid that has electrified 70 households in Upper Blinkwater, in the Eastern Cape.

“This project, implemented with the support of the Eastern Cape provincial government and the German Development Agency, has provided access to electricity for households who are 90% dependent on social grants at a rate cheaper than that of State-owned power utility Eskom.”

To recover the cost, Lamo Solar has partnered with the Raymond Mhlaba municipality, which sells prepaid solar electricity vouchers to the households connected on the grid, Ramaphosa explains.

Moreover, he highlights that most SMMEs already use technology products in their businesses.

“Every day, our SMMEs are demonstrating out-of-the-box thinking in business skills. This must be matched by similar out-of-the-box thinking in SMME funding at a time when we have to scale up support, but with limited, and even fewer, resources.”

Further, earlier this year, Ramaphosa announced the establishment of the Township Entrepreneurship Fund, aimed at stimulating the township economy and creating dynamic markets in high-opportunity sectors.

“Small businesses provide goods and services, and are vital drivers of economic activity. They also provide employment opportunities and sources of livelihood for hundreds of thousands of people who, for a variety of reasons, have slipped through the employment net.”

The details of the fund are being finalised by the Small Business Development Minister.

“We need to offer confidence to investors so that they want to put their capital in our SMMEs by growing the sector and improving its viability.”

Ramaphosa was addressing delegates at the third and final day of the 2019 South African Investment Conference last month. The final day of the conference took place at the University of Johannesburg’s Soweto Campus