How Township Economies Can Be Repositioned As Strategic Drivers Of Inclusive Development

Township economies are at the centre of the doctoral thesis by Dr Kholekile Herbert Ntsobi (2025), “Developing an Intervention Framework to Accelerate Key Programmes for Economic Growth in South African Townships: A Study of Hammarsdale”, which explored how township economies can be repositioned as strategic drivers of inclusive development. Using Hammarsdale in KwaZulu-Natal as a case study, the research highlights how the township’s deindustrialisation, factory closures, and relocation of major companies have deepened unemployment and poverty, despite existing policy interventions.

Research Problem

South Africa’s township economies are central to the national development agenda but continue to face structural challenges such as weak infrastructure, poor access to finance, inadequate skills, and policy fragmentation. While Local Economic Development (LED) programmes were designed to address these challenges, their impact has been limited due to weak coordination between government spheres, insufficient resources, and failure to integrate township-specific needs into planning. The study was therefore undertaken to establish a baseline understanding of LED implementation challenges in Hammarsdale, identify incentives to attract major companies, explore effective policies for sustainable growth, and develop a practical intervention framework to accelerate township development.

Methodology

A mixed-methods research design was applied, rooted in pragmatism. Quantitative surveys with 260 business owners were complemented by qualitative interviews with municipal officials, business stakeholders, and community leaders. Statistical analysis and thematic analysis were used to triangulate findings.

Key Findings

• Business profile: 67% of businesses were male-owned and 32% female-owned, with most operating on a small scale and generating annual turnovers below R500 000.
• Sectors: Transport, logistics, and manufacturing were identified as dominant industries.
• Policy awareness: Most entrepreneurs had limited awareness of LED policies and reported few tangible benefits.
• Constraints: Inadequate infrastructure, poor digital connectivity, limited access to finance, weak municipal capacity, and insufficient training hinder business growth.
• Gender and youth disadvantage: Women and youth-owned enterprises were disproportionately affected in terms of revenue and access to support.
• Policy misalignment: Lack of coordination between national, provincial, and local policies undermined effective implementation.
• Governance challenges: Political interference and inconsistent municipal support weakened LED outcomes.

Emerging Themes

• Policy Alignment and Inclusivity – Need for integrated, context-specific LED strategies.
• Infrastructure and Utilities – Basic services and digital connectivity as preconditions for growth.
• Capacity Building and Support – Entrepreneurship training, mentorship, and municipal support are essential.
• Access to Finance – Financial barriers remain the largest obstacle for township entrepreneurs.
• Governance and Political Dynamics – Political instability and poor communication weaken LED delivery.

Proposed Framework: ITEDCF

• The study introduced the Integrated Township Economic Development and Communication Framework (ITEDCF). Its main components include:
• Policy Review and Communication – ensuring transparency and accessibility of LED policies.
• Infrastructure Development – improving transport, ICT, and industrial spaces to attract investors.
• Entrepreneurial Support – training, incubation, mentorship, and procurement opportunities for local businesses.
• Public-Private Partnerships (PPPs) – mobilising investment and collaborative resources.
• Youth and Women Empowerment – targeted support to enhance inclusivity and sustainability.

Contributions to Knowledge

The research contributes theoretically and practically to the study of township economies. It provides empirical evidence of gaps between LED policy and practice, advances discussion on integrating technology, innovation, and communication into township development, and proposes ITEDCF as a scalable model for revitalisation. It also highlights the socio-economic importance of supporting youth and women entrepreneurs who are often excluded from mainstream economic activity.

Conclusion

The study concluded that Hammarsdale’s economic stagnation stems not from lack of potential but from weak LED implementation, poor policy coordination, and inadequate entrepreneurial support. If properly integrated and supported, township economies can evolve into hubs of industrial and entrepreneurial growth. By adopting the ITEDCF, South Africa can better align policies, mobilise resources, and create enabling environments for township enterprises. In doing so, township development can significantly contribute to achieving the National Development Plan (NDP) 2030 and the African Union’s Agenda 2063 goals of inclusive and sustainable growth.