Nearly 80% of township businesses operate unregistered, Standard Bank report reveals

NEARLY 80% of surveyed businesses are unregistered, excluding them from finance and formal opportunities, according to Standard Bank's inaugural Township Informal Economy Report.

- DIEKETSENG MALEKE

STANDARD Bank's inaugural Township Informal Economy Report reveals that despite contributing nearly a trillion rand to South Africa's economy and creating thousands of jobs, almost 80% of township businesses remain unregistered, locking them out of formal financial services and growth opportunities. HENK KRUGER Independent Newspapers

(HENK KRUGER Independent Newspapers)

According to Statistics South Africa (Stats SA), unregistered businesses operate outside formal regulatory frameworks, including VAT registration, labour regulations, and tax compliance. These businesses are often not incorporated as legal entities, which prevents them from accessing finance, formal markets, and digital tools that could support their growth.

Despite these constraints, the township's informal economy remains a vital part of South Africa's labour market, accounting for nearly 19.5% of total employment in the last quarter of 2024. Recent estimates place its value at nearly a trillion rand, a significant figure when compared to South Africa's nominal GDP of R7.3 trillion in 2024.