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Understanding rules of the market system

TALKING BUSINESS with SAM MUNGADZE

February 26, 2016 5:11 pm by: Category: Analysis, BUSINESS, Featured, Investing, Leisure, Letter, OPINION & ANALYSIS Leave a comment A+ / A-
Samuel Mungadze

Samuel Mungadze

EARLIER this week, I drove to Sebokeng to listen to Premier David Makhura address residents of South Africa’s economic powerhouse, Gauteng Province.

The province last year contributed 35 percent to the country’s economy.

Makhura’s address dwelt significantly on how the government would focus on growing small enterprises and that is highly commendable.

He outlined a number of measures to help SMEs including cracking a whip on departments that do not pay for services within the agreed 30 day period and preferential procurement of services and products from township based firms.

Makhura explained in the first full year of the implementation of the Township Economy Revitalisation Strategy, his government had spent R1.8 billion procuring goods and services from township enterprises.

Furthermore, municipalities were spending R1.6 billion of their procurement budgets on township enterprises.

Makhura said the government had already reached the 12 percent target set for the 2015/16 financial year and were certainly gaining momentum towards spending at least 30 percent of our procurement budget on township enterprises by 2019.

Despite all this support, little or no investment has been made to improve understanding among township-based entrepreneurs of the link between time and effort.

Time that is not associated with effort is wasted.

A lot has been said about the economics of townships and the fact that about half of the urban population lives in townships – accounting for 38 percent of working-age citizens but nearly 60 percent of the unemployed.

An understanding of the structure, if any, of the township economy and the economic and financial realities and choices available is essential in developing action programmes.

Government’s role is often misunderstood, resulting in misplaced and ill-informed programmes that fail to appreciate the power of the human spirit that has allowed thousands to escape the geography seamlessly.

There are far too many people operating in the mainstream economy who used to live in the townships to allow anyone to create a new category called “township economy” when in truth geography confers no limitations.

If there is universality to human identity, then one has to look for philosophical and other dimensions in the search for solutions that can transform the townships into vibrant and promising places.

This column is inspired by my own experiences last year.

The 1873 Network, a not-for-profit organisation invited me to Orange Farm Primary School for a function in support of its diversity project.

During the visit, the school’s obsolete and redundant computer equipment struck me.

I approached several companies to rescue the school and was humbled by Accenture South Africa response. The firm donated 20 computers.

If one visit can produce 20 computers, then I have hope that the market system is capable of converting even virgin land into an oasis of activity.

Progress must start with knowledge.

Knowledgeable people often have a different relationship with time than people with less knowledge.

When one examines the relationship that township inhabitants have with time, one can appreciate the predicament.

It cannot be asserted that the time given to a person residing in Sandton and to a dweller in a township is different.

However, when one looks at how time is used in the less privileged addresses, one immediately realises it is the use of time we often refer to as “work” or “effort” that matters.

Surely, it cannot be asserted that it is the purpose of life to confer through the intermediation of the state rights to people who fail to use their time to serve mankind.

The state would soon be broke and the people who pay taxes would be aggrieved if it becomes a habit to penalise hard-working citizens in pursuit of empowerment schemes that are doomed to fail simply because it is the use of time that matters and not time itself.

Time is neutral but effort is not. Those that choose to serve humankind will be rewarded, but those that elect to wait for state actors to tax others to lift themselves up will fail as socialism has done in othercontemporary societies.

It is not “township people” who require uplifting.

What is needed is a better understanding of the rules of the market system.

 

 

 

Understanding rules of the market system Reviewed by on . [caption id="attachment_1388" align="alignleft" width="300"] Samuel Mungadze[/caption] EARLIER this week, I drove to Sebokeng to listen to Premier David Makhura [caption id="attachment_1388" align="alignleft" width="300"] Samuel Mungadze[/caption] EARLIER this week, I drove to Sebokeng to listen to Premier David Makhura Rating: 0

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