An analysis of the role of government interventions in youth-owned Small, Micro and Medium Enterprises (SMMEs) in Kathorus, City of Ekurhuleni, Gauteng Province

Abstract

Small, Micro and Medium Enterprises (SMMEs) play an imperative role in South Africa’s economy through employment and sector creation, poverty alleviation and holistic growth. In townships, SMMEs are perceived as informal in nature even though they meet essential needs within the community and contribute to local livelihoods. The Gauteng Provincial Government (GPG) has developed several interventions aimed at revitalizing the township economy, which comprises enterprises and markets operating within the townships in the province. Given the limited empirical evidence on the effectiveness of these interventions, this study focuses on the role of government initiatives in supporting youth-owned SMMEs in Kathorus, City of Ekurhuleni, in Gauteng. The study argues that despite the availability of various monetary and non-monetary interventions from local, provincial, and national governments, systemic barriers and challenges hinder the sustainable growth of SMMEs. This is evidenced in the persistently high failure rate of SMMEs, stagnant economic growth, the increasing inequality, poverty, and unemployment rates amongst the South African society. Using a qualitative study approach, this research drew on both primary and secondary data, including interviews with participants and key informants, observations, analysis of relevant policy documents, reports and development plans. The findings revealed that despite the use of both traditional and digital communication platforms by the government, awareness and knowledge interventions remain limited among youth entrepreneurs. High levels of dissatisfaction with these interventions were reported which negatively affect youth participation in democratic processes, including policy formulation. Nevertheless, the majority of young entrepreneurs who have access to government support reported positive outcomes including saving costs, improving operational efficiencies, building reputable brands and managerial skills. Therefore, this study concludes that improving the sustainability of township economies such as Kathorus requires targeted reforms to government interventions. These include reworking regulatory frameworks and bodies responsible for SMME development, investing in improving infrastructure and digital services, expanding access to financial support and reinforcing local value chains in these areas. The study contributes empirical insight into the implementation of government support programmes for youth-owned SMMEs within township economies, thereby informing policy and practice in similar local contexts.

Keywords: Youth entrepreneurship, SMME development, Township economy, Government interventions, Kathorus, City of Ekurhuleni.