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Gauteng Business 2016 edition

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The 2016 edition of the Gauteng Business and Investment Guide is the premier business and investment guide for the Gauteng province and the Gauteng Growth and Development Agency (GGDA). In addition to detailed profiles of key provincial organisations, including the GGDA, the Automotive Industry Development Corporation Centre (AIDC), the Gauteng Investment Centre, the Gauteng IDZ, the Gauteng ICT Park SEZ and Constitution Hill, this edition includes well-researched economic and demographic data on the province, as well as insights into the province’s five development corridors and the new industries and development nodes in these corridors; a focus on Gauteng as a global city region; and key growth sectors for the province.

SPECIAL FEATURE Township

SPECIAL FEATURE Township Economic Revitalisation Premier Makhura boosts investment in Ndlelanhle Khuzwayo. Township enterprises, cooperatives and SMMEs that produce goods and services that meet the needs of township residents are at the heart of the Gauteng Provincial Government’s (GPG) drive to revitalise and mainstream the township economy through supporting the development of township enterprises, cooperatives and SMMEs. The Township Economy Revitalisation (TER) project is integral to the five-year plan of the provincial government that aims to radically “Transform, Modernise and Re-Industrialise” Gauteng. The intention is to build a seamlessly integrated, socially cohesive and economically inclusive City Region. This follows the staging last year by the GPG of the Township Economy Revitalisation Summit, which was preceded by consultations with more than 50 000 township entrepreneurs from 65 townships. From these extensive consultations a strategy was created through which an enabling environment and a detailed programme of action can be established. It remains a fact that the level of entrepreneurship in South Africa is one of the lowest in the world, being ranked 27th out of 59 countries in terms of the primary measure of entrepreneurship. According to a survey by the Global Entrepreneurship Monitor (GEM) in 2012, almost 4 400 small businesses closed down in South Africa due to a lack of funding. Unfortunately, the 2012 GEM survey also indicated declining levels of local entrepreneurship, from a reported 9.1% in 2011 down to 7.3% in 2012. As accentuated in the Township Economy Revitalisation Strategy, the majority of the township enterprises operate on a small scale and would certainly have suffered as a consequence of this drop in performance. The recent emergence of shopping malls in the townships has also had a negative impact on small businesses. This is one of the GAUTENG BUSINESS 2016 36

SPECIAL FEATURE reasons why the provincial government aims to partner with the corporate sector, township enterprises and local government to promote investment in the township economy and the development of township enterprises and cooperatives. The Cooperatives Banks Development Agency will work with the GPG to facilitate the establishment of cooperative banks that are owned by communities (including burial societies and stokvels) as part of promoting financial inclusion and broadening access to credit by township enterprises and communities. According to the Premier, the GPG currently spends at least 5% of its R10-billion procurement budget for goods and services that are provided by township enterprises. “We have now committed to set aside 30% of public procurement budget for township enterprises over the next five years,” he said. Seven new township hubs The key role that township hubs play in transferring skills and creating employment in the townships has also been recognised. Seven new township hubs will be established in Ennerdale, Hammanskraal, Mabopane and Reiger Park. Additionally, Industrial Parks in Katlehong, Orlando, Residentia, Khutsong and Ennerdale will be revitalised, while there will also be a strengthening of the three existing township economic hubs in Mohlakeng, Winterveld and Diepsloot. In another development, a R1.6-billion investment has been made in Diepsloot, from which about 160 township entrepreneurs who are involved in light manufacturing and other productive activities will benefit. Called the Riversands/Diepsloot SMME Incubation Hub, with state-of-art facilities, this is an exciting and far-reaching initiative. Township hubs allow entrepreneurs to concentrate on managing their business without being perturbed by having to plan and build infrastructure for their operations. Meanwhile, the Gauteng Department of Economic Development will embark on a comprehensive education and awareness campaign to empower townships businesses and entrepreneurs in terms of business formalisation and registration. The campaign is titled Qondisa Ishishini Lakho, and it aims to build confidence in township-based enterprises in addition to registering in the region of 10 000 Small, Medium and Macro Enterprises (SMMEs) across the five regions of the province to create a conducive environment for entrepreneurs and also to transform Gauteng townships from being reservoirs of cheap labour to being the pulse of the economy, where every rand generated from the township economy circulates within the township in order to benefit township residents. Revitalisation of the township economy Gauteng Premier David Makhura believes firmly that the province is committed to placing the township economy at the centre of its programme for radical economic transformation. “Townships can no longer be mere sites for the reproduction of cheap labour and for trading of goods and services that township communities do not produce,” he said. He added that in the interactions his government had with townships residents through the 2015 Provincial Township Economy Revitalisation Summit that they had “agreed on the key steps needed to radically transform our townships from their historic role as reservoirs of cheap labour into centres for productive and light manufacturing activity. Our consultations have produced a strategy through which we will create an enabling and supportive environment for existing and future township enterprises to grow and flourish”. Makhura also confirmed that the township economy is now firmly part of the government’s national economic policy. During his State of the Nation Address (and subsequent response to the debate on the Address), President Zuma indicated that “economic transformation to unlock growth also means improving the support provided to small enterprises especially township and rural enterprises which will promote economic activities at local level”. The Provincial Government has already committed more than R160-million to the township economy. In the 2015/16 financial year it allocated more than R300-million to support township enterprises and cooperatives and, at the same time, municipalities have made 37 GAUTENG BUSINESS 2016

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