Impact of COVID on the township economy

More than three quarters of township entrepreneurs suffered a blow during Lockdown stages caused by COVID-19 in South Africa, with lack of income, businesses closing down and facing struggles to maintain a normal lifestyle under the abnormal circumstances.

UNISA Press and Township Entrepreneur’s Alliance (TEA) have collaborated and put resources together in conducting the Lockdown Economic Impact Survey. A common concern and a goal to understand how the COVID-19 pandemic and consequently the national lockdown affected the township economy in particular, the formal and informal micro enterprises. The results of this survey are not intended to be used in any scientific or academic publication.

The survey was solely intended for individuals who are running business activity in the township. The aim of the survey was to understand the experiences of township entities during the lockdown, as well as how the lockdown might have impacted (positively or negatively) their economic activity. The study focused on three specific areas, namely; the economic activity of enterprises; financial implications and obligations of enterprises and finally the socio-economic impact.

The entrepreneurs who participated in the survey are mostly African youth across the country. The Impact of the Lockdown caused them to not be able to fully operate their businesses and some had to continue their operations from home. The entrepreneurs that do live in the townships, are either owners or renting dwellings within the townships, many have responsibilities of extended family members 3 to 6 people in their households.

The type of enterprises span across many business categories, most traded in the services industries followed by transportation, tourism and the retail industry thereafter. The liquor business accounted for the smallest percentage of business activities in the township.

“Despite the uncertainty of the current situation, most entrepreneurs are still determined to continue with their businesses even during COVID-19 as most don’t have any other option available to them but to make it work.” Says, Bulelani Balabala, founder of the Township Entrepreneur’s Alliance (TEA). This impact wasn’t just on the entrepreneurs and their families but also on the people these enterprises employed as most of the enterprises employed between 2 and 5 people.” Continues Balabala.

The statistics showed that most of the entrepreneurs felt that there should be a more co-ordinated central point/body should be used to access relief funds for township businesses, more than half of the entrepreneurs felt left to defend for themselves and felt that enterprises should not fend for themselves in accessing relief. Many entrepreneurs were not optimistic about the government’s relief intervention to assist township businesses.


Township Entrepreneurs Alliance (TEA)

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