SAITEX 2024 Opens with Key Insights on Integrating the Informal Sector for Global Economic Growth

Written By: Chetan

Chetan

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June 21, 2024 3:18 PM

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The informal sector plays a vital role in the global economy, requiring effective integration with governments and businesses to foster collaboration, learning, and growth opportunities. This was the central theme highlighted during the e-Kasi talks on the opening day of SAITEX 2024.

Fuelled by micro-enterprises spanning various sectors, the Kasi Economy, often referred to as the ‘hidden economy’, supports a third of local employment. These dynamic and innovative communities are inhabited by 11.6 million people, underscoring townships’ substantial economic power amounting to billions of rands in spending capacity.

“In terms of cross-border opportunities, businesses in the township economy definitely benefit from the insights and learning opportunities at SAITEX 2024,” mentioned Cllr Leah Knott, MMC, Department of Economic Development, in her opening keynote address at SAITEX 2024.  

Research released by Accenture Africa in 2023 revealed that South Africa’s “hidden economy” comprises over 150,000 spaza shops, contributing to an estimated market size of R178 billion.

The informal sector accounts for approximately 42% of all employment and contributes about 6% to the national GDP, totaling around R470 billion ($25 billion). Over the past five years, the informal sector has grown at a Compound Annual Growth Rate of 14.17%, surpassing the formal sector.

The Kasi Economy operates in a nearly circular manner, where businesses are established by residents and supported by fellow township citizens. More than 70% of South African households purchase from informal traders, including hawkers, small and large spazas, superettes, and mini and midi wholesalers. By 2030, small retailers in this micro-economy are projected to generate 70% of all new jobs.

Dr Sindiswa Mzamo (Global President, Circle of Global Business Women) led the talk on “Lessons learnt – what has been done to boost Gauteng’s township business”, and was joined by Nosipho Khonkwane, general manager of Gauteng Enterprise Propeller (GEP). 

Key insights emphasized the critical importance of alignment between township businesses and their environments for success and sustainability. It was underscored that there is no universal solution—some enterprises require grant funding and business development services before considering loans. Access to finance emerged as a pivotal factor for growth, with significant gaps identified, including an R86 million to R346 million shortfall in SMME funding in South Africa.

SAITEX has served as a pivotal platform for nearly three decades, facilitating the exploration of diverse opportunities within the region. It connects traders with a robust network of international and local businesses, enabling them to discover innovative products, solutions, and services tailored to their specific needs.

Industry experts delved into the latest innovations, creative ideas, and actionable insights aimed at fostering growth and empowering local township economies. Thematic sessions included eKasi talks, SMME Focus Day, and e-Commerce workshops.

A significant focus was on market entry strategies, offering guidance on essential considerations for entrepreneurs, such as the business dynamics between the UAE and South Africa. Sergio Carlos Macamo, a leading expert from the High Commission of the Republic of Mozambique, provided practical advice on navigating new export markets, addressing key aspects like customs, tariffs, and cultural nuances.

A highlight of these discussions was the signing of a Memorandum of Understanding (MOU) between the SMME Chamber of Commerce and the Embassy of the United Arab Emirates. This initiative aims to streamline business operations for SMMEs between the UAE and South Africa, facilitating smoother market access and trade opportunities for small businesses in both regions.

This significant event took place during the insightful session, “UAE and South Africa Business Case: Entering New Markets – What Every Entrepreneur Needs to Know” and was graced by His Excellency Ambassador Mahash Saeed Alhameli of the UAE.

The SMME Chamber, a key partner of SAITEX 2024, serves as the advocate for small businesses across Africa, committed to fostering an ecosystem that promotes access to markets, financial inclusion, and socio-economic opportunities.

Day 2 of the event focused prominently on SMMEs, beginning with a session dedicated to integrating women and youth into business while addressing trade barriers. Moderated by Dr. Sindiswa Mzamo, Global President of the Circle of Global Business Women, the panel featured insightful contributions from Lethabo Sithole (Amila Africa), Jacqueline Nzisabira (Regional Policy Advisor, UN Women), Nancy Sangqu (Founder, Milani International), and Mpume Zwane Langa (CEO, Afrisource and MD, Maxim Industries Africa). They explored the pivotal roles of women and youth in trade, particularly in light of the AfCFTA Protocol on Women and Youth in Trade. This protocol aims to mitigate specific challenges they face, enabling access to markets, enhancing competitiveness, and fostering participation in regional and global value chains.

SAITEX continues to facilitate robust international and local trade relationships, providing a platform for the private sector to showcase innovations, solutions, and services to thousands of buyers, retailers, distributors, and wholesalers across various trade sectors.

“It’s one thing to have a cool idea, it’s another thing to execute on it.  If you’re going to start anything, you need to be comfortable with failure,” remarked Vuyo Tofile, Managing Director of Timbaktuu, one of the emerging markets enabler workshop presenters.

Tofile founded Timbaktuu Group Africa to create innovative and seamless access to goods, services, and opportunities for underserved communities. This initiative aims to foster a more inclusive economy, empowering individuals and communities to actively participate in their nation’s economic growth.

He went on to explain that we all have this fear of starting but have an even bigger fear of failing.  “And yet my fears were course-correcting me to the path I should have been on. What I realised and learnt along the way is if you know that it works out in the end, you end up making decisions faster,” said Tofile. 

He started as an entrepreneur selling boerewors rolls, learning along the way that you can sell anything at any price you want, if you keep iterating your product and improving it over time. “But you have to have confidence when selling it at that price,” exclaimed Tofile.

Alastair Tempest, CEO of the Ecommerce Forum of Africa, led a compelling workshop on the advantages of cross-border selling through E-commerce.

“One of the big problems in Africa is the little data and research available on Pan-African campaigns,” shared Tempest.  “But you need to find what you can, and maybe even create some research yourself.” 

A notable development in cross-border payments discussed was the Transactions Cleared on an Immediate Basis (TCIB) scheme introduced by BankservAfrica.

“It is literally transforming cross-border payments in the SADC region for many businesses,” says Tempest. 

The TCIB service represents a groundbreaking cross-border remittance solution that facilitates fund clearance between South Africa and Zambia in just 60 seconds. This formal, regulated, and cost-effective service enhances convenience and accessibility for users.

Reducing remittance costs aligns with the United Nations’ Sustainable Development Goal 10 for 2030, aimed at reducing inequalities. Lowering average costs to three percent globally could potentially save remittance-receiving families an additional US$20 billion annually.

Returning for its third year, the Enterprise Development Pavilion, sponsored by the Johannesburg Convention Bureau, offered a dedicated platform for SMMEs throughout the conference to showcase their innovative products and services.

“This platform links emerging businesses, especially black-owned and women-owned enterprises, with key industry buyers, providing valuable exposure and market access. Through this initiative, we empower these businesses to flourish and shape the dynamic future of hospitality,” said Thandubuhle Mgudlwa, Chief Executive Officer, The Johannesburg Tourism Company.

“SAITEX 2024, Africa’s leading multi-sector trade exhibition, was a resounding success. The event showcased remarkable collaboration on the show floor, attracting a record-breaking attendance of over 4,900 people over three days. With more than 120 exhibitors, 18 workshop sessions, and 37 speakers, participants left inspired to address challenges and drive growth in the retail economy,” concluded Phetogo Kubheka, Event Director, Transport and Trade Portfolio at dmg events.