The township of Mabopane, north of Pretoria is like any other township in South Africa. The area was proclaimed in 1959 as a township and incorporated to Bophuthatswana in 1977. Today the population of the area is fast approaching 200 000 residents and is blighted by poverty and high unemployment. For the last 3 years, I have been leading a project to build a local enterprise center in the area. 

Using old shipping containers the center will be tenanted by local small business offering their services and goods to a captive local community. It’s been an interesting journey for which I have experienced a whole gamut of emotions. The experience has filled me with hope and excitement and many challenges and setbacks have not dimmed my optimism for what this project represents. 

This week, I met a young lady from the community. Masego is a bubble and highly driven young lady in her early twenties. Whilst the popular narrative we are fed is of young people in the townships who are hopeless, futureless, pie-eyed and prancing about aimlessly with dope coursing their veins, waiting for handouts which they proclaim as their entitlements, Masego is not your media constructed archetypal township young female. She is highly driven and innovative.

 She is pitching an idea of running a shop that offer a unique beauty services.  Eyebrow Micro blading is amongst very popular offering in the Billion Rand beauty industry. Masego seeks to bring this to her township of Mabopane. Innovative small businesses are very important for the economy. 

They create most jobs. A study in 2018 put the number of small business in South Africa to 250 000 and their contribution to formal jobs was 28%. The numbers of jobs created quadruples if you look at informal employment. Small locally based businesses begets a plethora of benefits to the community. Locally based owners are much more beneficial to the community. They experience every day how the decision impacts their neighbors, they contribute more to members of the community. Richard Maponya was very famous in Dube, Soweto where his shop was located for giving school registration fees to many students in that community and beyond. Often discounted and yet important benefit is the role played by these entrepreneurs as source of inspiration.

They serve as a powerful role model for many local young people. Sadly, small businesses are under siege. During this pandemic, I have been astounded how big corporation continue to dominate. 
One company in this country probable supplies all sanitizers and sanitizing stations in our banks. We must give preference to small locally based business. They confer more benefits than big corporations. The statistics from Oxfam are staggering. While the top 25 US corporations were on course to earn 11% more profits in 2020 compared with the previous year, small businesses in the US looked likely to lose over 85% of their profits in the second quarter of the year. Mukesh Ambani is India’s richest man; his company is called Reliance Industries, and it specializes in petrol, retail and telecommunications. Between March and October 2020, his wealth more than doubled, reaching $78.3bn, and he jumped from being the 21st richest person on Earth to the sixth richest.

 During that period, the average increase in Ambani’s wealth in just over four days represented more than the combined annual wages of all of Reliance Industries’ 195,000 employees. The current economic crisis is comparable in its scale only with the Great Depression of the 1930s. According to the World Bank, the contraction of GDP globally because of the pandemic will be close to 5.2% in 2020, and the number of countries registering per capita contractions is the largest the world has seen since 1870. Falling prices of commodities and oil, paired with supply shocks in global value chains, are also fuelling this economic crisis.

 The impact will not be felt evenly, however. In March 2020, stock markets around the globe suffered the worst shock in a century, destroying billions of dollars’ worth of financial assets. However, since then stock markets have recovered well, and with them the fortunes of the world’s richest people, who hold much of their wealth in stocks and shares. According to Oxfam, the wealth of the top 1,000 billionaires, a small group of mostly white men, has recovered to pre-pandemic levels in only nine months. In contrast, after the 2008 financial crisis, it took five years for billionaire wealth to recover to its pre-crisis highs. 

The fact that the stock market is booming while the real economy is facing its deepest depression in a century is in large part a reaction to central banks having moved dramatically to inject billions of dollars into stock markets to prevent them from crashing, while governments having moved more erratically to support their real economies. Elon Musk increased his net wealth by $128.9bn, Jeff Bezos by $78.2bn. 

The world’s 10 richest billionaires have collectively seen their wealth increase by $540bn over this period. Some of the world’s largest corporations are funnelling billions of dollars in profits to shareholders, which has given yet another windfall to the world’s richest billionaires. The irony is that whist the Lords of our modern economies are prospering the ‘serfs’ are wallowing in abject poverty. This is hardly the world we want to leave behind for our kids to inhabit. It seems to me the antidote is freely available and it’s the promotion of small locally based businesses. Small business offer the whole society benefits. We need to let many Masego’s flower and prosper as the whole community prospects will rise in tandem with them not the current prevailing environment.