Valued at nearly R1 trillion annually, South Africa’s township economy remains one of the country’s most powerful engines of local enterprise. To explore the dynamics, challenges, and untapped potential of this powerful engine, the University of Fort Hare (UFH) joined forces with the University of Bath, UK, and Lehigh University, USA, on a collaborative research initiative.
Titled “Economic Futures: The Interplay of Identities, Trust, and Governance in South African Townships”, the project is funded by the Trans-Atlantic Platform (TAP).
This week, from 19 to 21 January, the research team presented early findings from their Qualitative and Impact Protocol (QuIP) study at the TAP – South African Township Policy & Research Colloquium at Blue Lagoon Hotel in East London.
The study involved in-depth interviews with 140 enterprise owners from Khayelitsha in the Western Cape and Mdantsane in the Eastern Cape, offering rich insights into the entrepreneurial realities of these township communities.
Some preliminary findings indicate that limited local demand and intense competition are key constraints for many township businesses. Crime also emerged as a persistent challenge, affecting both operations and growth.
Despite these challenges, the research identifies essential opportunities to strengthen township enterprises. Access to quality inputs and the adoption of new technologies were identified as sources of competitive advantage, while strong social networks were found to be critical to sustainable business success.
“A large number of respondents reported increased customer numbers and profits linked to a range of positive business practices, particularly marketing through social media, good customer service and word of mouth, as well as sales tactics such as offering credit arrangements, flexible services, adaptive opening times and service designs that meet clients’ needs,” the researchers noted.
The findings further reveal that financing remains largely personal, with most operators relying on family resources, while access to formal or semi-formal financial support remains limited. The research team also observed that although strong entrepreneurial ambition is evident among many operators, it is not universal across township businesses.
The research team comprises Prof Munacinga Simatele and Prof Forget Kapingura of UFH; Prof James Copestake, Dr Aurelie Charles, and Dr Michelle James of the University of Bath; and Prof Jaimie Bleck of Lehigh University.
Beyond the presentation of findings, the colloquium brings together academics, policymakers, government officials, non-governmental organisations, and community leaders for robust engagement on evidence-based and practical solutions to support township economies.
Proceedings on the first day began with welcome and opening remarks by UFH Deputy Vice-Chancellor for Research, Partnerships and Innovation, Dr Nthabi Taole-Mjimba. The DVC noted the significance of the gathering, saying that it reaffirms the University’s commitment to producing research that transcends academic walls to impact and empower communities.
Prof Gertjan van Stam of Windesheim University of Applied Sciences gave an insightful keynote address on understanding township economies through African ways of being, knowing, and valuing.
The presentation of the research findings was followed by reflections from two Mdantsane business leaders, moderated by Prof Willie Chinyamurindi. The afternoon programme featured a roundtable discussion on governance and trust in township economies, moderated by Prof Forget Kapingura.
Day two of the colloquium features parallel panel discussions focusing on finance, informality, digitalisation, identities, migration, governance, and service delivery. Sessions include engagements on stokvels and small enterprises, digital tools for township business growth, and the role of identities in economic autonomy.
In the afternoon, the spotlight will fall on postgraduate student research, followed by a mentorship and networking session that will enable emerging scholars to engage directly with policymakers and practitioners for research and career development.
A policy round table on the final day will offer participants a vibrant platform for dialogue, reflection, and the co-creation of strategies for township enterprise development.
According to Prof Simatele, the gathering is designed to actively involve policymakers in interrogating and interpreting the findings through the lens of implementation experience.
“The colloquium is a deliberate co-production space, designed to engage policymakers in refining analytical priorities, stress-testing emerging interpretations and ensuring that subsequent phases of data collection and analysis are aligned with policy needs and the realities of decision-making,” she said.