Johannesburg – Township economies should not be seen as secondary or less important to big business, said Anglo American executive head, Andile Sangqu.
Sangqu was speaking at the Enterprise and Supplier Development conference held in Fourways on Thursday.
He highlighted some of the challenges township small and medium enterprises (SMEs) are facing and their important role in building the economy.
“Black business or township business is not small business,” said Sangqu.
Township entrepreneurs' role in the economy, despite their size, is big, he said.
To maximize the country’s economic potential, the public and private sector need to create an enabling environment for SMEs to grow. This is especially necessary in neglected areas like township and rural communities, he explained.
Structural and sustainable support programmes, in addition to investment, are needed to scale these SMEs. Further, to ensure their economic inclusion, there should be linkages between the formal and informal sector, said Sangqu.
This is achievable through cross-sector partnerships among business, government and civil society.
An interplay between business and government is the only mechanism that can ensure a thriving and sustainable township economy, which does not play “second fiddle” to formal economies, he added.
“To achieve growth, it is best to help entrepreneurs have access to opportunities in the formal economy.”
Challenges to township economies
Some challenges to overcome include access to financial capital and limited access to market and access to mentorship and skills training.
Additionally, a conducive regulatory environment, supportive of township businesses is needed. A stronger interplay between the formal and informal economy is also required, he said.
“There needs to be open opportunities for small and township businesses to participate in the formal sector value chain,” he said.
“The benefit of thriving township economy in immediate communities is the ability to create jobs,” explained Sangqu.
This is possible through skills transfer and access to internet, funding and ICT equipment which entrepreneurs would not normally have access to.
He added that greater focus should be placed on scaling these SMEs, that way “meaningful jobs” and “economic opportunities” can be created.
“Holistic and well-structured sustainable programmes can turn entrepreneurial dreams into reality,” he said. Post-investment management and help entrepreneurs overcome the challenges they face.Read Fin24's top stories trending on Twitter: Fin24’s top stories