Give tax breaks to boost investment in townships, real estate mogul Mike Nkuna says
The spa industry is dominated by immigrants who pay their South African owners around R25 billion in rent per year, they told participants.
The government should consider tax incentives to stimulate investment in townships, said businessman Mike Nkuna.
The real estate mogul is executive chairman of Masingita Property Investments and owns a commercial real estate portfolio in Soweto estimated at over R 2 billion. The group owns around fifteen shopping centers across the country.
Speaking in a virtual webinar hosted by International Housing Solutions on Wednesday, Nkuna said that in addition to tax incentives, other conditions should also be considered, such as employing local residents.
He further called on the government to support bulk infrastructure for developments in the townships.
The businessman, who recently made headlines when Masingita-owned Protea and Jabulani malls were looted during the July unrest, recalled his own experience by starting out by buying “the corner store” for eventually develop shopping centers.
âTownships were originally designed in a way that precluded formal development. Some of us saw opportunities to buy a corner store, then buy houses around and change the zoning in business and later set up a mall. We made sure to design it with the store layout, for example, as if it was a development for Sandton, âhe said.
“The role of government is to be a facilitator so that we as entrepreneurs can enter a region and start doing development. We need visionaries in South Africa,” he added. .
The engine of economic growth in the townships of South Africa has long been on the government’s radar. Most recently, the new township bill was introduced in the Gauteng Legislature. Among other things, it aims to support small businesses to help enable economic recovery in the province.
Speaking at the same webinar, GG Alcock, entrepreneur and author of KasiNomics and Third World, said the retail sector has undergone dramatic changes in many townships in SA. Spaza stores were challenging large retailers, he said, with an estimated turnover of around R 150 billion per year.
In addition, Alcock said, spaza traders pay their landlords about R25 billion in rent per year.
He further cited a growth of “main streets” along popular taxi routes, with many companies relocating to these areas in search of customer access. An “enabling environment” should be created for them to do so, he said.
Lusanda Netshitenzhe, CEO of TUHF21 business incubator, echoed Nkuna’s call to support emerging township businesses, saying it could help create âeconomic hubsâ.
âThe time has come for this type of support in the townships. Much remains to be done to ensure the establishment of viable economic poles. in areas of medium density.
“The government has a role to play in this regard, so that neighborhoods dense enough to offer economic opportunities are established,” Netshitenzhe said.
âIt has to be done tastefully along busy taxi routes. Watch how Sandton was developed from what used to be a farm. Zoning has been changed to allow for densities and it is now the economic center of Johannesburg. We also want to create this in the townships. “