STARTUP SPOT | BOHLALE BUZANI | When rising costs are met with hard ceilings for profits

From Duncan Village to Mdantsane, from Zwelitsha to Dimbaza and all the way up to Mthatha, state factories and industrial parks are empty and crumbling.

Once centres of production and job creation, today they are just shells.

Their silence, echoing in the absence of a supportive ecosystem, mocks the struggles of small businesses fighting daily just to survive as food inflation and input costs climb.

Electricity, that festering wound eating at the nation's heart, soared 1,722% between 2009 and 2022 and isn't finished ballooning yet.

Food inflation has been rising faster than many realise. In 25 years, food prices in SA have increased by nearly 280%. That means what cost R10 in 2009 now costs about R38.

This year alone, beef went up by almost 29%,vegetables by 15% and grains and maize, our staple, continue to be driven higher by drought and global supply chain disruptions.

Add increasing fuel and packaging costs, and the squeeze, for small businesses, the backbone of our communities, comes from every side.

For township spaza shops and street vendors, customers are simply too price sensitive to absorb these increases. The result is smaller portions, cheaper substitutes and, in the worst cases, closed businesses.

Small-scale farmers face skyrocketing input costs for fertiliser, feed and fuel, yet they have to sell into supply chains that keep their prices fixed.

Restaurants and taverns face the double challenge of higher costs and fewer customers eating out.

Many township businesses operate without rebates or any kind of support. Some turn to illegal electricity connections simply to keep the lights on. Others cut back on staff or reduce operations.

This survival mode, crisis mode, and it is not sustainable. It limits all growth and squashes dreams of creating jobs in communities.

There is a structural problem here. There are policies and programmes in place, and many claims that small businesses are supported.

But just try accessing a rebate from a municipality. It is a maze of red tape. Procurement systems are designed in ways that exclude the smallest operators.

Meanwhile, the crumbling, vandalised industrial buildings in Dimbaza and Zwelitsha could be repurposed as co-operative food processing plants or cold storage facilities, reducing costs through scale and shared utilities.

This would support small producers and strengthen the local economy.

Small businesses need space to operate, not barriers that prevent them from growing. 

The contradictions are stark. National policy aims to reduce headline inflation, but VAT thresholds and utility regulations trap informal entrepreneurs in high compliance costs.

Supporting township producers means adjusting the VAT threshold in line with inflation and enabling municipalities to offer fair electricity pricing.

At the heart of it all are people like you and me, our neighbours and friends.

A mother selling vetkoek to feed her children and pay school fees. A young poultry farmer trying to grow from five chickens to fifty.

A caterer stretching basic ingredients to serve weddings, funerals and community events. Here, inflation is not a theory. It is a daily stress that threatens livelihoods and communities.

Township and rural economies have always adapted and persevered.

But resilience alone is not enough. What is needed now is deliberate investment, far-sighted plans and policies that enable growth.

Municipalities also need to step up, because their role is critical.

They can create lower tariff bands for micro-enterprises, streamline rebate processes and revive the old industrial zones.

They can promote co-operative energy schemes and incentivise solar or micro-grid solutions.

There are examples across the country where smart local policy has turned decline into growth. These lessons should be learnt from and applied here.

If SA is serious about building a resilient, inclusive economy, then this is a great place to start: right here.

Buzani is a business consultant and youth empowerment advocate.