FIFI PETERS: We are shifting focus now to the township economy, because many big businesses may have insurance to cover the financial damage from the looting in recent days. However, smaller businesses may not, meaning that the impact on their businesses from the looting may deal them an even bigger blow, especially those in the townships.
But here to give us colour and discuss the recent riots and the impact they’ve had on the township economy, I’m joined by Bulelani Balabala, founder of the Township Entrepreneurs Alliance. Bulelani, thanks so much for your time. Chief, can you just tell us, from your humble estimates, what the impact on the township economy has been from the recent riots?
BULELANI BALABALA: Good evening. Thank you so much for having me. The events of the past couple of days almost epitomise the nail in the coffin, because we have seen the township businesses in the past couple of months in the formal and informal sector struggling their way through, getting almost no financial relief from the government. I think I should refer back to one of the survey reports that we released in March, which was the Lockdown Township Economic Impact Survey. Only 2% of these entrepreneurs were able to meet the criteria required for the relief scheme. They would not even have responded. About 66% of these entrepreneurs never participate, I guess, because of the historical lack of support from government entities.
I think one of the most potent ones for this particular conversation is that about 80% of the pool of 6 000-plus township and rural entrepreneurs that we engaged with in the survey said they didn’t have business insurance, which further epitomises the current reality. The reality at the end of the day is if you then build in relief sort of mechanisms and products – we think of products that are reliant on historical financial data – you speak again about the bulk majority of these township and rural entrepreneurs, because the bulk of small businesses in this country and all around the world operate on debt. That already (rules) them out of accessing any bank or DFI sort of relief scheme.
That is why it then becomes incumbent on the government; we are begging them at this point to play an active role in the resuscitation, the rebuilding and the restructuring of these small businesses. This also gives them a great opportunity to remodel the township economy inclusively with the small business participants.
FIFI PETERS: What does an active role look like – especially as you say that most of these businesses that were hit don’t have insurance cover.
BULELANI BALABALA: Yes, they definitely don’t, which is why I think we’ve also taken it upon ourselves as an organisation to launch a campaign, taking into consideration that it’s Nelson Mandela month. But it doesn’t feel like it because of the events of the past couple of days, and even the events of the past couple of months. I think that we’re relying on some of our corporate partners to join us in rebuilding township businesses all across the country that would have been affected by this particular impact.
If you look at the work that we’ve done historically with some, working historically with them without the participation of government, at the end of the day the true custodians are the economic development parts of our government being able to aid these businesses which, at the end of the day, contribute to taxes.
It’s a debatable matter directly and indirectly, whether it’s through collectibles or whether it’s through the income tax and the sorts of PAYE or UIF contributing to a degree. It becomes incumbent on us to support these entrepreneurs. I mean, if you listen to the budget speech, the SONA, the State of the Nation Address, and the ministers consistently talking about how small businesses are the backbone of the economy, that all small businesses bear the brunt of the red tape in creating employment, they do not get the adequate support that they’re supposed to be getting.
FIFI PETERS: It was quite beautiful to see what was happening yesterday in Soweto, with residents actually protecting Maponya Mall from suffering the destruction experienced at other malls within townships. Bulelani, what we also saw was that it was people living in the township who were helping to destroy some of these township businesses – which was very sad. In your view, what has been the motivator or the driving force behind the unfortunate incidents here in South Africa in the past recent days?
BULELANI BALABALA: I think first and foremost it’s just to appreciate the active citizenry that we have seen all across the country – from taxi owners to community leaders, to academics, professionals and even young people across the country – literally playing their part. I think that’s the epitome of being able to stand for your community and protect it.
Then I think, just tracking it back, the culture comes back to us, the people who live within the township. It goes back to us saying it’s not Thabo, my neighbour’s problem because he’s got a shop down the road; it’s our problem collectively. I think carrying that mindset into this looting situation and all other socioeconomic problems will then unite us as a community to protect our communities.
But if you look at the challenge, which is the question that you’ve asked now – what has led us to this? It’s been a ticking time bomb. We’ve been in a position over the past couple of years where we’ve almost had a Department of Small Business that has been non-existent. In terms of the past couple of months we’ve consistently been asked what sort of relief programmes are there with the Department of Small Business. Even though the programmes are out there, there is no actual support for them. I think it’s a strange thing for us where, I mean, I’ll make a reference to doctors and organisations where, as an organisation that is non-funded we were able to reach out to 50 000 township and rural entrepreneurs. What we’ve always said to the various departments, the minister and so on and so forth, imagine if you could actually partner and work with such organisations that are on the ground all over the country, immediately you’ve got your footprint.
FIFI PETERS: Exactly, I hear you. Bulelani, the picture that you paint – if we had a stronger force there partnering with the initiatives that your organisation is currently doing, certainly we would have rosier picture and a story to tell about the township economy.
We’re going to have to leave it there for now. Bulelani Balabala, the founder of the Township Entrepreneurs Alliance.