Entrepreneurs big and small inspire hope
“The economy looks more resilient than we thought,” said Jeff Gable, Absa’s chief economist and head of research, one of the keynote speakers at the Absa Jewish Achiever breakfast last Friday, 5 November.
“We thought it would take a long time for the economy to recover, and we thought the initial damage from COVID-19 was larger than we had anticipated,” he said
Though different sectors would have had different experiences, it was anticipated that overall, the South African economy would get back to where it was pre-COVID-19 not in 2023 or 2024 – which had been the earlier projection – but by the first half of next year.
However, Gable said there were still some “chunky challenges” facing the economy, most notably vaccine hesitancy, persistent inequality, and rising interest rates globally.
“We have seen an awful lot of jobs disappear,” he said. Data reveals that jobs have been lost across all age groups, placing huge strain on vulnerable communities.
“An enormous amount of the youth are unable to put their skills to use,” he said, pointing out that in the 25 to 34 age group, data showed that South Africa had gone from “terrible to diabolical”.
Economic growth, stability, and recovery rested largely on the population becoming fully vaccinated, Gable said.
As South Africa exited the third wave and eased social restrictions, the number of new daily infections is at its lowest since the outset of the pandemic. “That’s fabulous news, but does it mean we are three waves and done? Lessons from elsewhere in the world suggest not,” he said.
Only about 30% of the South African adult population is fully vaccinated, with little more than half the population having had at least one jab. “We still have a long way to go, sitting at only 150 000 vaccinations per day in South Africa,” Gable said. “This is because of vaccine hesitancy not because of a lack of vaccines.”
Because of this, a fourth wave seems like a very real possibility for the country, and with that further restrictions on economic activity.
Howard Sackstein, the chairperson of the Absa Jewish Achiever Awards and the SA Jewish Report, welcomed this year’s nominees, judges, and VIPs to the 22nd annual awards.
The awards, Sackstein said, celebrated people in the community who had found hope in the time of darkness, opportunity in a time of despair, and those who steadfastly believed that the best days were still to come.
Though it had been an indescribably tough year on all fronts, many lessons could be learnt, and there was lots to be hopeful and positive about, he said.
Sackstein delivered his rousing speech on the dusty streets of Kliptown, saying that though there was still much to be done, and communities remained vastly different from one another, South Africa was for all who lived in it, as stated in the Freedom Charter signed only a train track away many years ago.
Ronnie Mbatsane, the managing executive at Absa Retail and Business Banking, said Absa, the title sponsor of the awards, valued its relationship with the community.
The bank saluted the men and women in the community that “kept the candle burning and flourished against all odds” during the pandemic.
Absa celebrated those in the community who excelled in business, entrepreneurship, and continued to make a difference in society in spite of the pandemic and the effect it had on the economy.
Entrepreneur GG Alcock, the author of Kasinomics and Third World Child, spoke about the multi-billion rand informal economy made up of a multitude of small businesses. “In the shadows of Sandton and elsewhere, there’s an invisible army, another economy which should inspire hope and belief,” he said.
“It’s made up of small people doing big things, transforming the continent and economies. While there’s doom and gloom around, COVID-19 has shown us the amazing resilience of these businesses in this space.”
Alcock cited numerous examples of these everyday people performing everyday miracles in the economy. Gogo Delicious, for example, makes 3 000 amagwinya (vetkoek) – the croissant of Africa – and sells them for R1 each in downtown Johannesburg every day. She also sells about R500 worth of polony and cheese slices, tea, and coffee, making about R3 500 a day.
“She has been doing it for 10 years with her husband. They wake at 02:00 in Soweto, and carry 20 litre drums of dough that they prepared the night before, grab a taxi, and by 03:00, they are on the streets of Jozi selling.
“They represent this fast-food sector that exists – worth R50 billion a year – which has about 150 000 traders,” he said.
“She is an entrepreneur. These are the people who drive our economy,” Alcock said.
He spoke about the roaring ikota trade. An ikota is the hamburger of the township, and consists of a quarter loaf of bread which comes with polony and cheese, slap chips, with extra add-ons including an egg or a Russian sausage.
One woman in her 30s, a university graduate, recognised the need for township fast-food and started a franchise called Sphahlo Paleis. She now has six branches in the centre of Pretoria and Braamfontein in Johannesburg, and sells about 4 000 ikotas a day.
“She has a fleet of youngsters with electric scooters who shoot through the streets delivering ikotas to the high court, businesses, and government departments. She’s an inspirational person who represents this invisible economy, young entrepreneurs who have complete confidence and belief in these spaces,” he said.
One man started by selling chicken, potatoes, and packaging to 31 ikota outlets in Soweto using his late grandfathers bakkie and storing his goods in his grandmother’s back room.
“In mid-2019, he was turning over about R25 000 a month selling to 31 outlets. Today, he sells to 81 outlets and turns over R980 000 a month.”
“He typifies a spirit and a sense of hope for the future of what South Africa can represent outside of the formal economy and outside the depressing economic figures,” Alcock said.
The impressive spaza sector led mostly by Somali traders in places like Khayelitsha in the Western Cape have “transformed the township retail space”, he said, comparing them to the entrepreneurial, resilient early Jewish merchant traders.
“The informal economy typifies entrepreneurial zeal. They get no support from the government and from most financial institutions yet every day, they’re out there.
“We have to change our perception of misery and unhappiness. Most of these entrepreneurs are incredibly proud, and we should give them the dignity, respect, and admiration they deserve. There is real hope.”