What’s Going On with the Township Economy Since Covid Started?

VMLY&R South Africa recently hosted a webinar with Township Entrepreneurs Alliance founder Bulelani Balabala where he explained why now is the time to form meaningful relationships that benefit both small business owners and your brand. Here are some of the key take-outs.

By VLMY&R staff writer

  • Township economy

It’s been more than a year of South Africa’s 21-day national lockdown. Sure, we’re no longer running laps in the passage or trying to perfect Gogo’s umqombothi recipe, but we all have our “good” mask that comes out on special occasions and starting the braai early to be home before curfew has become the norm – as have pay cuts, job losses and business closures. And, as usual, township communities have been hit the hardest.


Fallout by Numbers

Township Entrepreneurs Alliance (TEA) partnered with UNISA to do a survey into the impact of Covid-19 on SA’s township economy. Working with 7 883 rural and township entrepreneurs, the Lockdown Township Economic Survey compares the pre-pandemic landscape with where we find ourselves today.


Unsurprisingly, many of the stats make for grim reading: 67% of informal enterprises were unable to operate at all during lockdown levels 5, 4 and 3. 75% of small businesses experienced a drop in sales, forcing some to close. To the astonishment of none, the government’s Covid relief plans proved to be a masterclass in overpromising and underdelivering – 43% of township entrepreneurs did not even bother applying as it looked to be an exercise in futility since many business owners were in debt, rendering them ineligible. 77% were left struggling to survive off less than R5 000 per month and 60% were unable to meet their personal and business financial commitments – leading to more debt. See where this is going?


But South Africans are nothing if not resilient – and township entrepreneurs have that resilience triple-distilled. The pandemic has also forced the emergence of “survivalist businesses” – started by former employees who, after being retrenched, had to explore another path. As these new entrepreneurs enter the economy, they – like existing small business owners – face a whole new set of challenges, compared to the landscape pre-Covid. And it’s here that opportunities for meaningful partnerships come to the fore.


Digital Divisions

It’s no secret that the pandemic has accelerated the digitisation business like a dropped GTI on the freeway. But in a world where meeting requests come standard with a Zoom link, township entrepreneurs with limited data access have hit a whole new barrier to doing business. In the TEA survey, digital exclusion topped the list of challenges reported by township, followed closely by lack of information and resources and access to digital marketing. Building operational hubs or training centres that are physically located close to where these business owners are creates an enabling environment for them to be able to grow and develop.


Procurement Paradox

The path to uplifting township communities is paved with good intentions – and cracked with missed opportunities. Many a well-intentioned business has funded projects that benefit township communities – but deep, lasting impact happens when they go a step further and use lose local township businesses to supply goods and services for these projects. By supporting local business, you’re boosting the township economy and accelerating change from within. Enlisting a third party who has experience and trusted relationships within the community in question can ensure that both the customer and the township supplier get maximum benefit from the deal.


Shared Spaces

Access to premises is a major hurdle facing township entrepreneurs that can be addressed relatively simply by businesses which already operate within the townships. There’s no need to find budget for construction or fight your way out of an avalanche of red tape – by opening a section of existing office or retail space to local businesses, you’re empowering entrepreneurs and building solid brand equity in the community.


Mentoring, Market Access & Marketing

The upheavals that have come with the pandemic have affected every business for better or worse – and let’s be honest, in most cases, it’s been for worse. Assistance with marketing and market access is a big help for township businesses, but again, there’s room to go deeper: Many township entrepreneurs don’t have access to the information and resources to help them reimagine their business proposition. Offering the skills to capitalise on that expanded market reach fosters long-term independence. But rather than long-winded incubator programmes, actionable, bite-size tips that can be implemented right now are what these business owners need.   


Ultimately, it’s about partnership: Working together to create a relationship that benefits your business as much as it benefits the township businesses you’re working with – all towards the common goal of building a thriving economy.

...Read More