Bay chamber collaboration to unlock opportunities for township businesses

The Nelson Mandela Bay Business Chamber is hosting the first Kasi Bizconnect event on 16 May 2024 in collaboration with other stakeholders to unlock developmental opportunities for township-based businesses in the Metro. 

The event is designed for formal and informal small businesses operating in various townships across Nelson Mandela Bay.

With the government having identified the township economy as one of the potential drivers to spur job creation, social stability and inclusive economic growth in South Africa, the Chamber has partnered with the Eastern Cape Development Corporation (ECDC), Standard Bank and Kasi Talks to drive awareness of growth and sustainability interventions available to the sector by providing them with developmental information and opportunities, insights, business growth engagements and networking opportunities. 

The session will cover access to markets, supplier and enterprise development opportunities, business support services, and funding. Through this engagement, the businesses will have an opportunity to network with each other and create meaningful linkages. 

According to Roger Wilco’s 2023 Township CX Report, the total market value of the township economy is estimated to be R900 billion, with approximately 60% of the market considered formal and 40% informal. Around R150 billion in cash is spent at the estimated 150,000 spaza shops every year, which contribute as much as 5.2% to South Africa’s GDP and employ 2.6 million people.

The report further highlights that testimony to its potential, big retailers are seeking to tap into the township economy. Big brands are emulating the spaza shop model by offering smaller-format stores constructed from shipping containers in a bid to get closer to where their shoppers live.

“The township micro and informal sector, which employs many workers and traders, is often overlooked despite its importance to the economy. For instance, according to Thwala, Masiya and Lubinga (2023) report in the International Journal of Sociology and Social Policy, the food business in the informal sector is estimated to be worth R87 billion annually. It has been around for 10-20 years. The residential backroom renting sector is worth approximately R30 billion. This sector is estimated to employ 2.5 million people,” says Denise van Huyssteen, Chambers’s chief executive. 

She further adds that many of these businesses, which are born out of economic hardship and are referred to as necessity enterprises, are often not compliant with funding requirements, and their growth is generally stagnant.

Various factors contribute to this, including regulatory/legal barriers, deficiencies in the physical environment and infrastructure, locational disadvantages, limited links to wider value chains, inappropriate land use management systems, red tape and cumbersome bureaucratic processes, lack of access to finance and limited government support, crime and negative social attitudes, and the tough market environment as a result of intense competition from other small and large businesses.

“Therefore, our intention is to support them in formalising their businesses, developing their skills, becoming compliant with funding requirements, and turning their operations from necessity-based businesses to opportunity-based businesses,” says Van Huyssteen.

The Chamber is an inclusive business organisation representing businesses of various sizes, both formal and informal. “We plan to continue creating these interventions and offerings targeting township-based businesses because we recognise the importance of creating nurturing networks.”

Kasi Talks founder Siya Mandla says they are extremely excited to collaborate with the Chamber, Standard Bank, and ECDC in our pursuit of positioning the Township Economy as the pinnacle of our country’s economic growth.

“We believe that Towns, as economic zones, have a critical role in driving economic growth, job creation, and entrepreneurship promotion. It is against this background that we are hosting our first Kasi BizConnect, where township entrepreneurs are encouraged to come and network with others,” says Mandla.

“We strongly believe that the Township Economy is open for business.”

Jonty Bouw, Standard Bank’s Head of Enterprise Banking in the Eastern Cape says: “We are pleased to be working in collaboration with the Chamber, ECDC and Kasi Talks for the first Kasi BizConnect. This platform brings together local entrepreneurs and key stakeholders in constructive dialogue which will unlock opportunities for Township Economic Growth. We look forward to sharing information on our Enterprise Development solutions to address some key challenges small businesses face, which we believe will enable them to grow.”