Big change for the township economy in South Africa

 ·5 Jan 2023

The City of Johannesburg has made it easier for informal traders to get trading permits through an online registration and application platform.

The city said that the digital application system would enable a trader or anyone wishing to become a trader in the region to register remotely once fully fledged. It said that this fulfils part of the municipality’s aim to align itself with the Fourth Industrial Revolution (4IR).

Herold Mbowane, the deputy director for informal trading, said that some other advantages include generating reports on the informal trading sector.

“The system serves as an information centre to communicate to traders in real-time via SMS and assist in bylaw management,” Mbowane said.

The city said that the policy has been in the works since 2018 and was later adopted and became a bylaw, paving the way for the city to have an organised informal trading sector.

Beneficiaries of the digital informal trading permit will now be able to register and apply anywhere at any time, and they don’t have to go to any office to register or apply for a trading permit, which will save time and money, said Mbowane.

Mbowane said the new system was fully implemented following a pilot process that lasted over three months.

Informal trading and small business as a hotspot for economic growth in South Africa have been a topic of recent discussion, especially within Gauteng.

Within the first quarter of 2022, the Gauteng Department of Economic Development welcomed the Township Economic Development Bill on 24 March. The bill sought to, among other things:

“To provide for the promotion and development of the township economy and to create a conducive environment for the attainment of that purpose; to provide for licensing of township based enterprise.”

The Provincial Portfolio Committee on Economic Development, Environment, Agriculture and Rural Development said that the bill would make business more viable and introduce a framework for township-based retail malls to partner with local township-based enterprises.

The informal/township economy makes up an estimated 17% of the country’s overall employment, according to Investec.

One of South Africa’s biggest banks, Standard Bank, has stated its interest in this part of the economy. In June 2021, the group said that the informal economy is crucial to unlocking growth, inclusion and long-term social stability in the country.

Township enterprises are the missing link required to get South Africa onto a higher and more inclusive growth path, said the bank.

In addition, John Jack, the CEO of Galetti Corporate Real Estate, the township retail sector alongside smaller strip malls, has seen a recovery trend since the pandemic.

“An estimated R150 billion in cash is spent at spaza shops in the informal economy every year, and we expect to see more retail landlords realising the opportunities available in the informal sector by funding smaller retail developments in these areas,” Jack added.

Read: Big milestone for online shopping in South Africa

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