Inclusion takes centre stage at township economy revival imbizo
- In the space of just over a week, businesses and facilities in parts of KwaZulu-Natal and Gauteng were looted, burned and destroyed, during a violent rampage that left more than 300 people dead.
- The Presidency said the country could lose R50 billion due to lost output, after about 3 000 shops and 200 businesses were hit by rioters.
- For Association of Black Securities and Investment Professionals, the unrest was a catalyst for an overdue conversation about how South Africa's townships were left behind as the rest of the country's economy grew.
The importance of ownership in rebuilding South Africa's township economy was a major area of focus at a Black Securities and Investment Professionals' imbizo, as the country begins its recovery following devastating looting and destruction to property.
In the space of just over a week, businesses and facilities in parts of KwaZulu-Natal and Gauteng were looted, burned and destroyed, during a violent rampage that left more than 300 people dead. The Presidency said the country could lose R50 billion due to lost output, after about 3 000 shops and 200 businesses were hit by rioters, leaving 40 000 businesses to deal with the costly consequences.
For Association of Black Securities and Investment Professionals (Absip), the unrest was a catalyst for an overdue conversation about how South Africa's townships were left behind as the rest of the country's economy grew.
"For us, it was a point of concern for a very long time and we've always been meaning to have this conversation to say, 'how do we unlock the potential that we know resides, in the township economy?" said Absip President Polo Leteka on Saturday.
South Africa's townships are home to 60% of its population. And combined, they are worth an estimated R300 billion, according to Rori Tshabalala, CEO and founder of business model research and development firm, Chapter One innovation.
Tshabalala was one of the speakers at the imbizo on Saturday, which included Bidvest Bank chairperson and former CEO of the Stokvel Association Andile Mazwai.
Mazwai said it was clear that the country's segregationist past continued to be entrenched in townships. He explained that, for instance, the incomes of people who live in townships go towards consumption. And even though social grants can help augment their salaries, that increase also goes into consumption and can't stretch into savings and investments.
"If you find that your money is short and you want to go and borrow, you now have income that you've borrowed and you still consume it and it only makes your consumption even more expensive and this is your life in the township. Work, consume, repeat," he said.
However, people in the suburbs have it better. Their income is primarily from work as well, but they are also able to invest after they consume and those investments allow them to grow financially. As a result their income is made up of labour and investment returns.
"We must be honest enough to understand that we here, in this panel have allowed this inequality, when I say us, it's our ilk," Mazwai said.
He added that the inequality had been allowed to continue, entrenching the exclusion and no one had a right to be shocked by the unrest that took place.
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"In fact, this has been forewarned by an African proverb, 'the child who is not embraced by the village, will burn it, just to feel it's warmth', and this is where we find ourselves today," he said.
Mazwai said the unrest had forced South Africa to come up with a solution for an issue that is referred to as a "land issue", when it was actually an issue about productive assets. The problem was that there were very few people in the country who owned assets that generated income.
"Here is an instance where a lot of productive assets were destroyed by... people who had not been embraced by the system and they burnt it just to feel it.
"This today is the opportunity for us to feel confident, to have conversations with owners of productive assets about how do we now democratise the ownership of those productive assets?" he said.
For Tshepo Moloi, CEO and founder of stokvel platform StokFella, the riots came with a harsh lesson that had changed the way the company would approach doing business in townships.
After collecting R2.1 million from a 100 people in a franchising stokvel in 2020, the group acquired a franchise and recently followed it up with a second one in Soweto, which was unfortunately looted.
"One of the things that we realised, this was a community-invested store where we employed 14 people from the community. But the store was still looted. It's because we did not involve the same community in the conversation around ownership, and it speaks to dignity," he said.
He added that residents needed to be involved in conversations about how their economies can be grown, and also be given a clear understanding that they might not see a return on investment immediately, but that the businesses were creating employment for their relatives and other community members in the value chain.
"As a result, there is peace in the land and everybody gets to eat," Moloi said.
The imbizo also discussed possible changes municipal bylaws and the establishment a development fund to foster the growth of the township economy.