Transparency, not funding, is the missing link in SA's township economy

South Africa’s township economy remains one of the country’s most dynamic yet under-optimised growth engines — estimated in the hundreds of billions of rand and sustaining millions through spaza shops, informal traders and micro-enterprises.
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Yet, despite ongoing government commitments and high-profile funding announcements, organisations like Township Entrepreneurs Alliance (TEA) argue that meaningful impact remains constrained by a critical gap: transparency.

Beyond funding: a system under strain

Programmes such as the R500m Spaza Shop Support Fund, launched in 2025, were designed to strengthen township businesses through funding for stock, infrastructure, refrigeration and compliance.

However, on-the-ground insights suggest that the issue is not simply access to capital — it is visibility into how that capital is distributed and utilised.

Without clear reporting mechanisms, it becomes difficult to track applications, approvals, geographic reach and actual beneficiaries. This lack of transparency undermines trust and limits the effectiveness of otherwise well-intentioned initiatives.

For many township entrepreneurs, repeated announcements without visible outcomes have led to growing scepticism, discouraging participation in formal programmes and slowing broader economic integration.

Reframing the role of spaza shops

A key shift proposed by organisations like the Township Entrepreneurs Alliance (TEA) is how spaza shops are perceived. Rather than viewing them solely as informal retail outlets, they should be recognised as decentralised distribution hubs embedded within communities.

This reframing highlights their potential to unlock localised economic activity, create employment and inspire entrepreneurship — particularly among younger generations. With the right support structures, spaza shops can evolve into scalable micro-enterprises that drive meaningful growth within township economies.

Structural challenges and missed opportunities

TEA identifies several recurring barriers that continue to limit progress:

  • Erosion of trust: A disconnect between policy announcements and delivery has created scepticism among entrepreneurs.
  • Lack of transparency: The absence of accessible, real-time data on funding allocation prevents accountability.
  • Limited execution focus: Inconsistent implementation and lack of intentional leadership have stalled progress.
  • Access gaps: Many entrepreneurs still face challenges around compliance, market access and operational scaling.

These challenges point to a broader systemic issue — one where funding exists, but the mechanisms to deploy it effectively remain underdeveloped.

The role of partnerships and ecosystem thinking

Unlocking the full potential of the township economy requires coordinated action across government, private sector and community organisations.

TEA emphasises the importance of meeting entrepreneurs where they are — simplifying application processes, supporting compliance and enabling access to broader markets. This includes leveraging partnerships with organisations that have established credibility and operational experience within township environments.

For corporates, this presents an opportunity to integrate township businesses into supply chains, while for policymakers, it underscores the need to create an enabling environment that prioritises execution over announcement.

A call for accountability and action

To drive meaningful change, TEA is calling for greater accountability across all stakeholders:

  • For policymakers and funders: Publish detailed, accessible data on funding allocations and outcomes.
  • For corporate partners: Collaborate with proven township-focused organisations rather than duplicating efforts.
  • For entrepreneurs: Continue building resilient businesses and communities, despite systemic challenges.

The path forward

The township economy does not lack energy, ambition or innovation. What it lacks are systems that match the resilience already present on the ground.

Transparency, in this context, is not a compliance exercise — it is the foundation of trust, participation and long-term growth.

As TEA’s work continues to demonstrate, when township entrepreneurs are properly supported and recognised, investment follows. And when investment is matched with accountability, the potential for inclusive economic growth becomes not just possible, but inevitable.


 
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