The state of township entrepreneurship: A R1 trillion opportunity

THE value of the township economy is estimated at R1 trillion a year, but a new survey finds that nearly 80% of township businesses are unregistered, which excludes them from access to finance, formal markets and digital tools, that could enable them to grow.

- EDWARD WEST

According to Statistics South Africa (Stats SA), unregistered businesses are those that operate outside formal regulatory frameworks, including VAT registration, labour regulations, and tax compliance.

Stats SA finds that the informal township economy accounted for nearly 19.5% of total employment in the last quarter of 2024. For scale, South Africa's nominal GDP in 2024 was R7.3trln.

A survey by Standard Bank conducted across Gauteng, KwaZu-lu-Natal, Western Cape, Limpopo and North-West, in townships that include Meadowlands, Cosmo City, Langa, Khayelitsha, Lebowakgomo, Phoenix, among others, showed that these entrepreneurs often face up to 20 similar businesses per community, which squeezes their margins.

Fewer than 9% have access to bank loans, with most relying on personal savings or family support.

While cash remains dominant, more than 56% prefer EFT or bank transfers, indicating readiness for safer digital payments.

The survey by Africa’s biggest bank by assets, covered enterprises with annual turnovers ranging from R100,000 to R50 million, and which employed some 7500 people.