Townships hold billions

TOUGH: INFORMAL SECTOR WORTH R900BN

- Liesl Peyper

South Africa's township economy is estimated to be worth nearly R900 billion, yet almost 80% of businesses remain unregistered, which means they cannot access finance and other opportunities.

This is according to Standard Bank's inaugural Township Informal Economy Report, based on research conducted deom March to May this year.

Some 250 township-based businesses across Gauteng, KwaZulu-Natal (KZN), Western Cape, Limpopo and the North West were surveyed, covering enterprises with annual turnovers ranging from R100 000 to R50 million.

According to Statistics South Africa (Stats SA), unregistered businesses are typically those that operate outside of formal regulatory frameworks, including registration for value-added tax [VAT], labour relations, and tax compliance. These businesses are often not incorporated as legal entities.

While 60% of township businesses reported growth, many face stagnation or decline due to rising input costs, limited market access and poor financial planning.