Gauteng’s new township act in full swing; here’s what’s been done so far

The Gauteng Township Economic Development Act is in full swing, despite earlier threats to challenge the bill in court. The act, which requires the provincial government to spend 40% of its procurement budget with township-based enterprises, aims to transform townships into fully-fledged commercial zones.

Mathopane Masha, the Gauteng provincial government’s director for inclusive economy, answers some questions about the bill passed unanimously in the Gauteng legislature on May 29.

It’s nearly two months since the act was signed into law; what has happened since then? 

There are certain things the bill prescribed that must happen within six months of it becoming an act. One is that we must declare and gazette what we call township enterprise zones, which is what we are already doing. 

The act specifies that we must establish the role of municipalities in enabling the implementation of this legislation. 

We’ve also published request for information (RFIs) in a lot of areas. We are looking at getting as many potential partners involved in the implementation as possible.

In terms of the financing mechanism for township enterprises, we have already advertised applications for the township partnership fund. We made a call to anybody in the public who wishes to apply to do so, and the team is going through proposals and should be able to start disbursing the funds soon.

There were civil organisations and political parties who threatened to challenge the act in court on the basis of discrimination against foreign nationals. Has this been the case? And how has the act been received?  

The clause in the original bill that referred to that aspect is no longer in the act. What is clear in the act is that it is privileging black people in terms of the BBBEE legislation. 

Nobody has notified us of any court action. Instead, we have had a lot of organisations — including those that represent the interests of foreign nationals — proposing how we can collaborate in implementing the act. Our interpretation is that there has been a widespread buy-in from different communities regarding this legislation. 

It is projected the proposed structural interventions in the act can double the size of the Gauteng economy within a decade and cut unemployment by two-thirds. How will this be achieved?   

There are a lot of programmes in the pipeline that we will be implementing. 

One of the problems we face, for instance, is that individual SMMEs in townships don’t have the means to meet contractual obligations in terms of procurement demands. For example, if the department of health says “I am looking for 1-million loaves of bread every day for the next two months”, chances are, a township-based enterprise will not be able to supply that.

However, if you flip the script and do procurement aggregation, where multiple enterprises in the township cluster together and supply [products and services] as if they were an individual entity, then you are able to create opportunities. 

As a province, we are going to be implementing our BBBEE policy, which has the potential to unlock about R17bn worth of investment in township-based enterprises, in the next few weeks.

How critical will the BBBEE legislation be in doubling the size of the economy?  

We want to get to a point where we are classified as level 1 BBBEE. To reach this level, we need to be able to achieve certain targets, including procurement obligations. This will give us a leeway to access more resources and create more opportunities as well.

We have agreed that 40% of everything we procure henceforth will come from township-based enterprises, meaning the implementation of BBBEE becomes critical because you develop the skills for these guys to be able to access these opportunities. If you do projections based on that, there are huge opportunities we are opening up.   

Are there any large-scale projects where this legislation is being implemented?  

In the Tshwane automotive special economic zone that we are constructing with Ford, we have already implemented some of these strategies. For example, 45% of the value of the project has already been localised, we are contracting local SMMEs around Mamelodi and surrounding areas, and the impact has been huge.

So, if you target all the projects we will be focusing on, including Lanseria, the Vaal and many construction or large-scale projects, you can already see we have a case to develop skills and create opportunities.

The act makes it mandatory for provincial and local governments to support township businesses; will those given support be regulated?        

The whole regulatory framework we are introducing comes from what we call an enablement perspective. This seeks to enable access to a lot of things which, under normal circumstances, wouldn’t happen because of regulatory requirements, but also relates to some of the criteria in terms of accessing some of these support services.                        

How can the public assist the Gauteng provincial government in implementing the act?   

In Gauteng, we don’t want people to just shout from a rooftop; we need partners in the game. Anybody who is looking for partnerships to ensure that we implement solutions must come forward.  

Let’s all get our hands dirty and ensure that we contribute towards the development of our township economy and create jobs for young people.

This article was paid for by the Gauteng department for economic development.