Gauteng MEC for Finance
By Thabo Mosia
Thursday, 31 January 2025 – Johannesburg, South Africa – Gauteng MEC for Finance and Economic Development, Lebogang Maile, has reaffirmed the province’s commitment to township economic development, revealing that over R1 billion has been invested in township businesses through government support mechanisms.
Speaking at the South Africa-Davos feedback session on Thursday, Maile emphasised that the township economy generates approximately R200 billion annually, making it a critical pillar of South Africa’s economic future.
“Through the Township Enterprise Fund, as well as other mechanisms, including linking Gauteng township manufacturing enterprises to the Black Industries Fund, over one billion [rand] has been invested in the township economy,” Maile stated.The session was held at Ubuntu Kraal Lifestyle in Soweto, following Maile’s participation in the 55th World Economic Forum (WEF) Annual Meeting in Switzerland earlier in January. The South African delegation, led by President Cyril Ramaphosa, used the WEF to showcase South Africa’s investment potential.
Strengthening the Township Economy: Gauteng’s Investment Strategy
Maile outlined the Gauteng government’s multi-pronged approach to revitalising the township economy, which includes:
• Financial and non-financial support for township businesses
• Legislative frameworks to promote economic participation
• Infrastructure investments to create an enabling environment for small businesses
• Incentives to encourage investment in township-based enterprises
The Gauteng government aims to position township enterprises as drivers of local development, with a focus on job creation, economic inclusion, and reducing poverty and inequality.
Maile highlighted the province’s goal of attracting R300 billion in investments, reinforcing Gauteng’s role as South Africa’s economic hub.
“We are committed to building an inclusive economy that provides opportunities for township entrepreneurs and small businesses. The potential of the township economy must be fully unlocked to create sustainable growth,” Maile said.The Township Enterprise Fund and Black Industries Fund
A key mechanism for supporting township businesses is the Township Enterprise Fund, which provides financial assistance to entrepreneurs who lack access to traditional funding sources.
Additionally, township manufacturing enterprises are being linked to the Black Industries Fund, ensuring that black-owned businesses receive priority funding and support.
“This is not just about funding—it’s about creating an ecosystem that allows township enterprises to thrive,” Maile added.Gauteng Leads in Township Economy Investment
Gauteng is the only province in South Africa that has committed to spending 35% of its budget on township businesses.
The government’s procurement spend in townships has increased significantly:
• 2019/2020: R21 billion
• 2020/2021: R24 billion
• 2023/2024 Target: 35% of the total budget
This commitment ensures that township enterprises gain access to government contracts, further boosting their growth.
Township Economy Partnership Fund: Supporting Small Businesses
The Township Economy Partnership Fund (TEPF) was established to support vulnerable township small businesses that cannot access funding from private banks, government institutions, or business support programmes.
The fund plays a pivotal role in assisting micro and small enterprises by providing grants, mentorship, and business development services.
Legislation to Empower Township Entrepreneurs
The Gauteng Township Economic Development Bill provides a legal framework for promoting and supporting township enterprises.
The bill enables:
• Licensing of township-based businesses
• Regulation of the Township Economic Development Fund
• Policy guidelines for municipalities to support local entrepreneurs
By removing red tape and simplifying regulations, the government aims to encourage investment in township businesses and enhance their competitiveness.
Technology and Innovation in the Township Economy
The Gauteng Accelerator Township Economy (GATE) initiative promotes technology and innovation in township enterprises.
This initiative:
• Encourages tech-based solutions for township businesses
• Supports entrepreneurs developing digital services and e-commerce platforms
• Fosters innovation in manufacturing, retail, and logistics
Maile stressed that embracing digital transformation is key to making township businesses more competitive in the broader economy.
“Township businesses must evolve with technology to remain competitive. Digital skills training and e-commerce integration are essential for long-term success,” he said.Economic Impact of the Township Economy Revitalisation Strategy
The Gauteng Township Economy Revitalisation Strategy (2014-2019) has significantly boosted local economic activity.
Between 2014 and 2018, the Gauteng government’s procurement spend on township enterprises grew from R600 million to R17 billion.
The Township Economy Revitalisation Programme further supports:
• Small business incubators and training programmes
• Infrastructure upgrades in township business districts
• Market access initiatives for township entrepreneurs
Challenges Facing the Township Economy
Despite significant progress, the township economy still faces major hurdles:
1. Limited access to financing – Many businesses struggle to secure capital for expansion.
2. Infrastructure challenges – Poor roads, unreliable electricity, and lack of business premises hinder growth.
3. Regulatory barriers – Complex licensing and compliance requirements deter new businesses.
4. Competition from large retailers – Corporate chains threaten the survival of local enterprises.
Maile acknowledged these challenges and emphasised that continuous support is needed to ensure sustainable growth.
Building a Future-Ready Township Economy
To address these challenges, the Gauteng government is:
• Expanding access to low-interest loans and grants
• Developing industrial parks in townships
• Introducing digital platforms to support township businesses
• Enhancing vocational training and skills development
By fostering entrepreneurship, job creation, and innovation, township economies can become key contributors to national economic growth.
Global Recognition for Gauteng’s Township Economy Initiatives
Gauteng’s township revitalisation efforts have gained international recognition, with Maile showcasing the province’s economic model at the World Economic Forum.
The investment drive has positioned Gauteng as a prime location for global investors, with renewed interest in township-based industrialisation and local manufacturing.
Looking Ahead: The Road to R300 Billion in Investments
With a target of R300 billion in new investments, the Gauteng government is aggressively pursuing partnerships with:
• Multinational corporations
• Local businesses and SMEs
• Development finance institutions
As Gauteng prepares to host the G20 in April, economic development and township enterprise growth remain at the core of government policy.
“We are building an economy that includes everyone. The township economy is a fundamental part of our growth strategy,” Maile concluded.
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