Building Ekasi Economies

“Building ekasi Economies;cash must bounce more than once and remain there” By Roche Mamabolo

 

As someone who grew up in a township, my parent’s house is just behind a shop called Sibakhulu Retail Store. I loved this shop because it was very close to my where I grew up, so I didn’t mind when my parents sent to the shop because it was literally across the street. I also loved the shop because I grew fond of the owner, Mr. Sibakhulu, a very unassuming man, quite but very hard working entrepreneur.He ran his store professionally, the store was always open on time, there was noshortage of stock, and the service from the cashiers and staff was warm.

I was influenced to be a businessman by Mr. Sibukhulu, to this day I still appreciate those memories of how to be entrepreneur a mentored by Mr. Sibakhulu. But this story has a sad ending because the other weekend when I visited home, just like most young professionals who have left the township and only go back home over the weekends to visit our parents and siblings, proving the notion that you can take the black man out of the township, but you cannot take the township out of the black man, my heart was sadden by the news that Sibakhulu Retail Store is closing down, and is replaced by Shoprite Checkers.

The Sibakhulu Retail Store is but one story that reflects the state of township entrepreneurs and the changing dynamics. One may ask why be sad when Shoprite Checkers opens across the street, I should instead be celebrating that a well-known brand is opening, but for me this is unfortunate, its like the passing away of my role model, this is the shop that shaped my passion to be an entrepreneur, if Mr. Sibakhulu can do it, I too can do it.I mean how will Shoprite act as a role-model to the future ekasientrepreneurs.On that sombre note, the article attempts to address challenges of how can we revive ekasi businesses, with the notion that if ekasi entrepreneurs thrive, it will empower ekasieconomies resulting in the bulk of the money remaining and circulating in the township, resulting in job creation and poverty alleviation.

In September I attended an ekasi Entrepreneur Conference in the township of Khayelitsha in Cape Town. This was a conference organised by ekasi entrepreneurs, hosted in ekasi, using ekasi suppliers, from catering, entertainment, andekasi entrepreneurs as speakers. This was a world-class conference that could easily be hosted in the posh venues of the Sandton Convention Centre or some classy venue in the leafy suburbs of Cape Town. The idea of the conference was to address issues that will make ekasi entrepreneurs more viable with the intention of revivingekasi economies. Besides these are places where we grew up and still reside in, it will be a tragedy if we forget where come from.

ekasi is a Zulu slang word for what we call a location or more appropriately a township. Townships are a creation of the old group areas act, which resulted in black people being forced to live away from major towns. The picture of a typical townshipconsists of huge populations, lack of space, congestion in terms of houses, squatter camps, township were never built to be places where trade could happen freely, the infrastructure, by-laws and permits were very restrictive towards entrepreneurship. Basically there was no infrastructure conducive to allow entrepreneurship to thrive, there were shop and liquor outlets but black people were meant to travel to town to buy their monthly groceries, clothes and furniture.

It is in ekasi where high unemployment is resulting in high poverty rates and other social ills. It is in ekasiwhere there is high rate of necessity entrepreneurs (entrepreneurs who live hand to mouth) and very few opportunity entrepreneurs (opportunity driven entrepreneurs who have the high impact potential to create jobs). Ekasi entrepreneurs need to be more opportunity driven, which means they have to be innovative and idea-centered. The challenged that ekasientrepreneursface includes the opening of shopping malls with major retail stores, and the proliferation of Somalis and Pakistanis operating tuck-shops in the townships. Shopping malls have adverselyimpactedlocal retail entrepreneurs. Shops that are in close proximity to the malls have seen their sales decline and ultimately forced close down. The reasons vary from local customers preferring well-known retail shops (like Shoprite checkers) instead of Sibalukhulu Retail Store.

According to Dr. Eliada Wosu Griffin-El (Senior Lecture at The UCT Graduate School of Business) the concept of economies in the context of ekasi economies can be defined in two concepts:

1)      Economies in the context of the transactions, exchanges of money for goods and services; and

2)      Social aspects in terms of relationships between people in ekasi and this result in social dialogue and cohesion.Therefore an ekasi economy is about building relationships.

Usually when we talk ekasi economies we refer to the first aspect of Dr Eliada’s definition, how to do we create more transactions on ekasi. Statistics highlight that Soweto has a GDP of more than R10 billion per annum. This is in terms of income/salaries that people in the township earn. However statistics also states that there is huge outflow of money from the township due to people purchasing goods and services in town instead of in ekasi, the shopping malls that open in ekasi also contribute to the outflow of cash from ekasi. The phrase often said is: like a tennis ball, money bounces once in the townships and then it goes out immediately. If we want to create jobs and alleviate poverty in ekasi, money has to bounce more than once in the ekasi, in fact money has to remain in the ekasi.

Job creation should be a non-negotiable matter in South Africa, and to create jobs we need to ignite and revive the culture of ekasi entrepreneurship with the intention of creating ekasi economies. In one his speeches Deputy President Kgalema Motlhanthe once said “past heroes were political struggle icons, but today’s challenges require heroes such are entrepreneurs because they have the ability to employ and empower people”. SMEs contribute about 90% to the global economy and between 60% and 70% in any given country. Entrepreneurship remains the source of hope for employment and poverty alleviation. Seth Godin said very aptly “you get what you focus on. Focus on nothing and you won’t get much”, it is important that we focus on building ekasi economies. The following are some of my thoughts as to how we can create ekasi economies:

 

1. Quality Service

So you have decided to give an ekasi entrepreneur a chance to prove himself/herself and more often you have been disappointed with the poor quality service. On a small scale, you get your wedding cake delivered late, your car taking longer than usual to get fixed, or you take your car for a car wash and some of the contents go missing, not going to mention how the taxi drivers treat their passengers, on a higher scale RDP houses built six months collapsed and needs to be fixed by the contractors. Those who have want to invest in the services of ekasi entrepreneurs often complain that the quality offered needs to be improved.  EKase entrepreneurs must provide quality service and not sub-standard services.

 

2. Training

Ekasi entrepreneurs are usually technically skilled entrepreneurs such as panel beaters, dressmakers, motor-mechanic, baker, hairdressers and IT technicians. The challenge is the lack of business skills and acumen.  They need to acquire skills such as cash management, marketing,business growth, customer care, operations and stock management. More often ekasi entrepreneur share their desire to grow into big corporations and therefore employing more people but the challenge is how and where to start.

Ekasi entrepreneurs need to learn and understand how to handle money, pay tax,and understand profit margins, break-even points and cost drivers. Most entrepreneurs tend to be allergicto cash flow numbers in such a way that they tend to confuse net profit with cash flow.  They need to understand that a business can be bankrupt even though it is profitable. Profit is state of mind, cash is king. Cash is the oil that keeps the business machinery turning. Companies that went bankrupt in most instances didn’t go bankrupt because they are not profitable, but because they failed to manage their cash flow. Cash flow is the life-blood of business, more especially for ekasi entrepreneurs because of theirinability to raise funding from banks due to lack of collateral.

 

3. Open Pitch Session

One of the observation about ekasi entrepreneurs is that they tend to copy each other’s businesses. There is an influx of the same types of businesses, such as car washes, chisa-nyama (braai-areas), hair salon, catering, cleaning services etc. Entrepreneurs who run such businesses tend to offer the same type of products/services, following the same processes and at the same prices. There tends to be little innovation. This might be caused by the lack of exposure to ideas outside  ekasi, it may also be due to lack of support for innovative ideas, and it may also be due to the fact that innovative ideas require time and investment before starting to show return on investment.For as long as there is demand for chisa-nyama, car washes, catering, such types of businesses will continue to exist and there is nothing wrong with that. There is however a need for more innovative businesses, this will not only be high impact businesses in terms of creating jobs but will also offer new solutions to current customer challenges. Basically this will revolutionise the market, ekasibusinesses needthought-leader entrepreneurs and not just market-leader products.

A radio presenter Al Boliska remarked “Do you realise if it were not for Thomas Edison, we will be watching TV by candlelight”. Innovation is important because it can change the world. In order to encourage innovation and creating idea, platforms that will increase and nurture creative ideas should be created.Open Pitch Session is one such platform,where a panel of successful entrepreneurs and experts can meet to evaluate new business ideas from ekasi entrepreneurs. No written business plans or Power Point Presentations are necessary at these platforms. Students, innovators and entrepreneurs from ekasigive a short (3‐5 minute) pitch or a persuasive overview of their idea and they are provided actionable feedback. Entrepreneurs who already own and run established businesses are encouraged to come to these platforms for more advanced advice on how best to position their business for future successes.

This is a risk‐free opportunity to develop entrepreneur’s business idea and get important feedback on the viability of their business concept.

 

4. Township incubators

One of the interesting observations I have noted is that in Pretoria, there are institutions such as CSIR, Innovation Hub, University of Pretoria, Tshwane University of Technology, UNISA, various Colleges, Statistics South Africa, Department of Trade and Industry, Council for Geosciences, Companies and Intellectual Property Commission, NYDA, GEP etc. All these institutions are all in one geographical area; basically they are in one town, The City of Tshwane. Based on the proximity, it therefore would have made sense that all the intellectual capital in one city would spread to the benefit of the all the ekasi entrepreneurs in the surrounding townships. I would be surprising to go the City of Kentucky in the states and not see a KFC outlet. There intellectual property in Pretoria should be linked to townships. MBA students from the surrounding universities should conduct their case studies with recommendations of township businesses, Innovation Hub should have initiatives where they conduct workshops in the surrounding, they should actually pioneer the Open Pitch Session since in townships and based on the ideas collected, they are tested and developed further on behalf of the ekasi entrepreneur.

“Adopt an ekasi business” initiatives should be encouraged by these institutions whereby knowledge and skill transfer is done to empower entrepreneurs; this can be through business incubators that should be opened in townships. Therefore the link is ekasi entrepreneurs through their local chamber of commerce link to the business incubator which then links to the intellectual institutions, and then information flows from one end to another through the incubator. The vast intellectual capital in the City of Tshwane should reflect and spread in the surrounding ekasi.

 

5. Ekasi entrepreneurs beintegrated into the supply chain process of major companies and mentorship.

Ekasi entrepreneurs should be partnered with big companies as part of the supply chain processes implemented. Thebe Investment Corporation, one of the big investment corporations in the country, launched a mentorship programme that sees its businesses commit themselves to nurturing 20 black small companies a year. These small companies went through the Small Business Enrichment Programme that will ensure that they are ready to be mentored and

In Watloo near Mamelodi,Samcor (assembles Ford cars)should be takeinitiatives to empower ekasi businesses and bring them through their supply chain.VW in Port Elizabeth has adopted some small business to integrate in their supply chain. This process will require a lot of preparation of the ekasi businesses to be at the required level to supply major corporations. But such partnerships are critical.

 

6. Local Laws and local infrastructure

Municipal by-laws should allow for convenient ease of doing business in ekasi. Applying for a permit or license should be done with ease and should not take long. The business registration offices should be opened in townships, if home affairs can open their offices in townships, so should the CIPC (Companies and Intellectual Property Commission) offices should be decentralised. In Malaysia business registration is not only done in one day, but in one hour, South African should consider such benchmarks. When a person registers a business, they should be able to complete a single form, in triplicate where one form is for the business registration itself, another for the SARS registration and last one for the opening the bank account. This streamlines the process and since banks have branches in townships, it will be convenient to open a bank account in ekasi. Office space and industrial sites should be allocated and first preference should be reserved for ekasi entrepreneurs. The right to freedom should give us the right to enterprise; the laws should not inhibit entrepreneurs to start their businesses in ekasi.

 

7. Mind-shift Change

If we are going to create ekasi economies, we will need to ignite the second definition of the Dr Eliada’s definition of creating a social cohesion economy first before a transaction-based economy, it is important that people from ekasi support local businesses. Not support for the sake of support, but support local businesses because they are local and are competent. Support without up-skilling local entrepreneur runs the risk of perpetuating mediocrity. It is therefore critical that ekasi entrepreneurs master the basics of their businesses. It is only through social economies that money will circulate within ekasi and will ultimately create the needed jobs. The ignition to all this is mind-shift change and provision of quality products/Services.

 

8. Leadership

Everything rises and falls on leadership. If we are going to build ekasi economies, we will need visionary leaders. Leaders from Local Chamber of Commerce need to put plans to consciously revive ekasi economy, to link academic institutions with ekasi entrepreneurs through ekasi business incubators,to connect and negotiate with big companies to adopt, capacitate and train ekasi entrepreneurs to form part of their supply chain processes.Ekasi entrepreneurs we need trade not aid. We need to start hosting events, business conferences in ekasi and speakers from outside ekasi must be encouraged to use Bread and Breakfast facilities in ekasi. If we host annual jazz events in Moretele Park in Mamelodi for instance, the suppliers of equipment, catering, security services should be from ekasi, the musicians should be encouraged to sleep over in local B&Bs. It should be an ekasi event in the true sense of the word.

 

9. Patience

Buildingekasi economies requires patience, strong leadership, vision and commitment.This is a long journey, we must be prepared to embark on this journey even if it means the benefits will not be realised in our lifetime.This is a legacy we need to build to benefit not only our current generation but to benefit future generations. An African proverb say:“If you want to walk fast, walk alone, but if you want to walk long, walk with others.” It is through partnership between ekasi entrepreneurs, big companies, academic institutions, government and the local people that ekasi economies will grow and prosper. Its in our hands, its our fate, Malcolm Gladwell says “no one who can rise before dawn 360 days a years fails to make his family rich”, we will have to work hard as entrepreneurs in order to build ekasi economies.

My vision is to see the legacy of Mr. Sibakhulu, Herman Mashaba, Richard Maponya not die in vain, they shaped our views on business, and therefore the onus to continue that legacy lies with young ekasi entrepreneurs. The past we inherit but the future we create, we all own South Africa; let us create the future we aspire. We must ensure that ekasi is alive with businesses. Steve Biko said we cannot be spectators in a game we are supposed to participate in. Its time to participate.

PS: This article was written in ekasi.



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