Will the real South African economy please rise up.


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      sylvia hammond
      Keymaster

      This post was not planned for Heritage Day, but it turns out to be very appropriate. Please don’t misunderstand me – there is no doubt that as a nation, we have persistently high levels of unemployment, poverty, and inequality.

      But this afternoon I participated in an online meeting as part of the Food and Beverage Education & Training Authority (Foodbev SETA) & Gordon Institute of Business Science (GIBS), University of Pretoria project. There are two programmes: the International Executive Development Programme (IEDP), and the International Management Development Programme (IMDP).

      One of the co- participants on the discussion panel was our fellow member of skills-universe – Kwathelani Calvin Nembidzane. Calvin was representing the National Small Business and Cooperative Association (NSBCA).

      In his presentation of the effects of COVID-19, Calvin explained how – in Limpopo where he is situated – small businesses have been growing. This is particularly food suppliers, and particularly bakers supplying bread. When everything came to a halt as a result of the COVID-19 shutdown, food was needed by the local community, and small businesses started up to meet the demand. Other businesses repositioned themselves with the services that they were providing, so that collectively the community set about meeting their own needs.

      Calvin sees enormous potential for employment growth in the area, as each small business expands, it becomes possible to take on a learner, with the very good likelihood that the position will become permanent as the business grows. But the skills development processes need to support this type of operation. Mentors and coaches may be able to make more of a contribution than a formal programme – that the small trader does not have time to attend.

      But Calvin is very clear about limitations to growth, such as the lack of banking facilities – but also very wary about banking institutions that see only the opportunity to pull people into credit arrangements – people who were previously free of debt, and managing on a cash basis becoming saddled with debt, and additional interest payments.

      In conversation with Calvin, it becomes very clear that there is an enormous amount of activity in his local rural area of Limpopo. Traditionally activities have been on a cash basis. Despite not having formal banking, traders and business people carry on their operations very successfully. It would be a retrograde step, for a bank to come in, and encourage people to take on debt. That may benefit the bank, but not necessarily the local traders.

      Now – why the title to this post? How much of this cash-based informal economic activity has been visible? To South African Revenue Services (SARS)? To Statistics South Africa (StatsSA)?

      So, I wondered – StatsSA do produce figures of the expanded definition of unemployment – that is those people who are no longer looking for employment, are added to the formal unemployment rate. It seems to be worth asking (do any members have research on this): are the people who are no longer looking because there is no formal employment available? But that does not mean there is no informal activity.

      StatsSA do also report on the informal sector. But are they picking up all the people, who are “making a plan” – finding a way to put some food on the table? For example, the woman at the station/street corner, who is preparing and selling food – and has two people helping her – how are they accounted for?

      My conclusion and proposal – we need to think in terms of home-grown African rural solutions, and not imposed Western solutions.

      Co-incidentally, University of Johannesburg (UJ) is running an advertisement of a project undertaken by the Electrical Engineering students. Please review it, as it looks like exactly what is needed to support rural development.

      https://universityofjohannesburg.us/4ir/2020/09/technological-innovations-put-rural-village-on-the-map/

      The solar project demonstrates the contribution that educational institutions can make to development of sustainable rural communities.

      Now, skills development providers – what projects can you undertake in rural areas?

      Happy Heritage Day to all.

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