Four partnerships driving broad inclusion in South African economy
The Jobs Fund, a R9 billion fund established by the South African Government to generate sustainable employment amongst previously disadvantaged South Africans, youth and women, recently published its list of partner projects for 2019. Four of these partnerships highlight the Jobs Fund’s deepening efforts to support the growth of township and rural economies relevant to the fourth industrial revolution.
“The Jobs Fund firmly believes that supporting and strengthening economic activity in townships holds the potential to vastly improve the livelihoods of people living in these areas and should be central to South Africa’s inclusive growth and broad economic empowerment strategy,” says Najwah Allie-Edries, Head of The Jobs Fund
The Jobs Fund is, therefore, extending its existing partnership with A2L Media (Pty) LTD. Trading as A2Pay, the business provides bespoke end-to-end technology solutions to informal market traders. This includes a full point of sale and stock management portal as well as a vending platform for virtual prepaid products.
In 2012 The Jobs Fund began a successful multi-year partnership with A2Pay, providing community access to wireless retail technologies.
“Our experience with A2Pay on previous projects highlighted the extent of the competitiveness and sustainability challenges faced by township retail enterprises,” says Allie-Edries.
In response, The Jobs Fund’s 2019 partnership with A2Pay, “aims to address a broader range of inter-connected factors impacting the competitiveness and sustainability of township retail ecosystems by, specifically addressing: Business training, infrastructure and technology development, and diversifying revenue streams,” explains Allie-Edries.
The 2019 A2PAY partnership will deploy a Jobs Fund grant of R 161 million, mobilising, through the Fund’s minimum 1:1 matched funding criteria, an additional R232 million via A2Pay’s private sector partners.
The leveraged grant will allow A2Pay to provide point of sale hardware, business development support, access to a virtual products retail platform, and access to bulk stock purchasing and last mile delivery services to 4 400 township businesses across South Africa. The partnership will also provide, “full time employment to nearly 6 000 skilled and semi-skilled workers, 74 of whom will work as internal A2Pay technicians, installers, and business coaches,” says Allie-Edries.
The Jobs Fund is also once again partnering with the Phakamani Foundation, extending and upscaling an already very successful micro-lending partnership currently building rural woman-owned and operated businesses in Kwa Zulu-Natal. The 2019 partnership will increase access to funding for micro enterprises in rural and peri-urban communities in the Eastern Cape, creating micro Jobs for marginalised women.
“The approach uses a Grameen Bank model combining community development and micro credit, offering small loans to women to pursue economic activities and escape poverty,” explains Allie-Edries. The model supports beneficiaries to set up and run small businesses, generating income for household needs - and also loan repayments, which are recycled to assist other entrepreneurs.
The Jobs Fund’s 2019 partnership with Phakamani will leverage R 35 million to equally match the Jobs Fund grant, capacitating over 13 000 women with the finance, training and support to operate their own micro-businesses on a sustainable basis. “Initiatives like Phakamani’s work assisting poor South African women leverage savings to invest in income-generating enterprises are an important step towards re-focussing South Africa’s existing savings culture towards more capital enhancing investment that supports broader economic inclusion. This new partnership will also create an additional 2000 permanent jobs,” says Allie-Edries.
The Jobs Fund’s first-time partnership with the SaveAct Trust will effectively double an R11 million Jobs Fund grant through contributions from SaveAct partners, including; Misereor, the Industrial Development Corporation, GIZ Germany, and the SAB Foundation. The partnership will train and support women in rural KwaZulu Natal, Eastern Cape, Free State and the Northern Cape, “leverage their stockvel savings to establish farming enterprises,” says Allie-Edries.
The SaveAct Trust partnership is developing a digital ecosystem assisting stokvel members manage, monitor and effectively deploy their savings. Financial education will also be provided to 10 000 stokvel members. It is anticipated that over 2000 of these, “will use their annually paid out share of savings to invest in new enterprise activity,” says Allie-Edries. The success of these enterprises will be supported by relevant agricultural training. Another 100 stockvel members will also be equipped to train beneficiaries on how to sell and distribute their produce. In addition, “a further 170 participants will become part of the contract grower programme, supported by signed third-party contracts to farm and sell their produce,” adds Allie-Edries.
A second first-time partnership, this time with SmartStart Early Learning, will deploy a R74 million Jobs Fund grant to leverage a combined pool of R164 million – recruiting and supporting women and youth in the running of early childhood development microenterprises. The partnership will be a powerful catalyst for change in South Africa’s Early Childhood Development ecosystem by including the provision of operating licenses and material to support the establishment of early childhood development sites.
It is anticipated that over the next three years the Jobs Fund’s partnership with SmartStart Early Learning will establish 3 500 micro-enterprises, over 3500 permanent jobs and 25 short term jobs. In addition, 10 beneficiaries will be permanently placed with project partners and an additional 7500 beneficiaries trained in the SmartStart model.
Previously disadvantaged South Africans, especially woman and youth living outside of South Africa’s very narrowly focused formal economy, “lack the relationship, knowledge, the technology and connectivity to leverage their skills and assets for meaningful economic participation,” says Allie-Edries.
“These four critical partnerships demonstrate that by adopting an ecosystem support framework we can leverage better opportunities for South Africa’s marginalised communities – successfully unlocking new economic growth and driving much wider economic inclusion,” concludes Allie-Edries.