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Township Innovation Hubs Are Turning South Africa’s Informal Economy Into Big Business
In the heart of South Africa’s townships, a quiet revolution is underway. Once dismissed as informal or “survivalist,” township businesses are now proving to be serious players in the country’s broader economic narrative. These local enterprises, nurtured by innovation hubs like The Innovation Hub’s eKasiLabs, are reshaping how we think about economic growth, community development, and inclusive opportunity.
Townships contribute nearly 6% to South Africa’s GDP, with their economy now valued at a staggering R900 billion. At the center of this transformation are local entrepreneurs like Mapula Ramothwala and Gontse Selaocoe, who are redefining what’s possible in historically marginalized areas.
From Farming Dreams to Hygiene for Kids
In Soshanguve, just 30km north of Pretoria, entrepreneur Mapula Ramothwala runs Kool Crew, a personal hygiene company for kids aged 6 to 18. With a background in agriculture and a BTech in Animal Science, Ramothwala never imagined she’d become a business owner. But in 2019, she founded Kool Crew to address a local issue—early onset body odor in active children—and developed products specifically tailored to the needs of young people.
Her big break came through The Innovation Hub’s Cosmetic Accelerator Program, which offered mentorship, funding, and market access. “We started in our township because we identified a gap in our community and understood the need for such products,” she says.
Transforming a Dump Site into a Farm
Over an hour away in Orange Farm, South Africa’s largest informal settlement, All Day Jam was born out of a desire to improve food security and job creation. Founder Gontse Selaocoe took a former dumping ground and turned it into an organic jam-making business that’s both eco-conscious and community-focused.
He too credits eKasiLabs for helping refine his business model: “Their incubation program helped us improve operations and scale our production.” For both entrepreneurs, access to networks, mentorship, and funding turned potential into thriving business ventures.
Innovation Hubs That Do More Than Incubate
The Innovation Hub, part of the Gauteng Growth and Development Agency (GGDA), operates in 14 townships across Gauteng, supporting over 272 companies. According to James Segooa, Acting Executive Manager for Township Economic Revitalization, the biggest challenge entrepreneurs face isn’t just money—it’s business skills.
“Most entrepreneurs don’t know how to structure pricing or build a business model,” says Segooa. “That’s where we come in—with skills training, mentorship, and market access.” Their support has already created 188 jobs across just 15 of the companies enrolled in the eKasi Lab program.
Rethinking the Township Economy
Experts agree: South Africa’s township economy is not a niche—it’s a powerhouse waiting to be fully recognized. GG Alcock, author of KasiNomics, estimates that R45 billion flows through township rental markets alone. Meanwhile, President Cyril Ramaphosa recently announced a R20 billion transformation fund to further uplift black-owned and small businesses.
Still, structural challenges remain. As Bulelani Balabala of the Township Entrepreneurs Alliance puts it, “The mainstream economy still labels the township space as ‘informal’—even though it’s formal in function, just underserved.”
A Blueprint for Inclusive Growth
Entrepreneurs like Ramothwala and Selaocoe aren’t just building businesses—they’re building foundations for inclusive economic growth. By solving local problems with tailored solutions, they empower their communities and inspire the next wave of entrepreneurs.
“Believe in yourself and your business,” Selaocoe advises. “And don’t be afraid to ask for help.”
As more innovation hubs pop up and township voices grow louder, one thing is clear: the future of South African entrepreneurship may very well be written in Se Pitori, jam jars, and kids’ deodorant.
{Source: Forbes}
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