Soon South Africa will be celebrating 25 years of democracy. Yet the main concern for many South Africans is the country’s poor economic growth prospects.
To break the downward spiral and counteract the current dampened mood, South Africans must work together to address three critical pressure points: high unemployment, inequality and poverty.
Attention must, therefore, be focused on the development of sustainable human upliftment in the country’s economic model.
One area of the economy that has seen very little development over the past 25 years, and encapsulates all the pressure points, is the township. Township development provides an opportunity to make a difference in the lives of thousands of poor South Africans. This can be done by developing business models that transform and integrate opportunities into productive assets by weaving together four key pillars:
1) Sustainability: assessing whether the township’s profile and resources lend themselves to the establishment of a programme that has long-term sustainability. Not all townships would qualify. For the various projects and investments to be feasible and viable, they must be township relevant. Business and financial modelling play a key role in ensuring flexibility within this blended socioeconomic approach.
2) Support: creating a platform that provides the infrastructure for people to obtain the necessary business and regulatory back-up to assist existing or newly created businesses is necessary. The “one-stop shop” concept is an important element in the support platform. It dovetails with a training and development hub where the community is provided with the skills that are appropriate and practical to support the initiatives developed within the programme. It is critical that the platform provides both technical and hands-on people management assistance.
3) Opportunities: identifying, exploring, engaging and assessing projects or investments that can start and/or grow and develop in the township environment is important. Community members who have been trained and skilled through the support platform are employed in the programme. The investments must, for a period, be managed within a controlled environment. This oversight will provide ongoing support for businesses to grow by competing in the open market; ensuring that standards and quality are maintained.
Furthermore, these investments must also generate income into the programme to ensure long-term sustainability.
4) Infrastructure: establishing a legal entity or similar independent, two-tiered structure. It should comprise a board to provide strategic direction and governance and a management team to take responsibility for the day-to-day business operations. The board, made up of key stakeholders, will, in addition to providing oversight, assist in overcoming challenges and open access paths to leveraging scalability and replicability.
But for township development to thrive, those four pillars must be supported by the following foundational principles:
• Focusing on creating fully fledged economies that are labour-intensive and complemented by technology and human development support;
• Building on a long-term horizon, structured on social objectives and business creation, to allow government, the private sector and the community to participate and benefit in a fair and equitable manner;
• Incorporating a good governance framework that ensures that the establishment of sustainable and viable initiatives provide reasonable ongoing economic returns while addressing social ills. No doubt, it must protect and improve the environment and its resources; and
• Ensuring sufficient resources of skilled professionals who are responsible for delivering the township development objectives and who are accountable to the stakeholders.
In 2014 a comprehensive township development programme was commissioned in Alexandra township that applied these pillars and principles. It brought together key individuals of diverse backgrounds from the private sector and the community, who spent well over a year working together on a viable and potentially high-employment generator programme. After engaging, presenting and negotiating with various government departments, the initiative was halted because of government’s priorities and lack of ownership. The team’s enthusiasm and commitment continued unabated in the hope that, in time, it would be revived.
It is therefore very encouraging to hear President Cyril Ramaphosa announce that government is embarking on a stimulus and recovery plan to revitalise the economy. Part of the plan intends on disrupting the cycle of exclusion, in particular for South Africans who live in townships and rural areas. These areas remain on the periphery of economic activity and are locked out of the economy as a result of the apartheid legacy.
The president committed to the establishment of a township and rural entrepreneurship fund as well as an infrastructure fund that will enable key stakeholders to work together in creating the greatest impact in addressing unemployment, inequality and poverty.
With the general elections looming, it is time for new thinking, fresh ideas and boldness to bring greater equality through employment creation, poverty reduction and economic growth. Township development presents an opportunity to contribute towards redressing these inequalities — it’s not without challenges and complexity but we can do it, Mr President.
Dennis Jackson is an accredited consultant in the United Nations Development Programme-sponsored SDP