By Devon Rogers
A few days into our wonderful stay at Cape Town, our class discussed South Africa’s economic future, and paid special attention to the details laid out in the article “What economic future, South Africa?” Through the reading, we found that a large portion of South Africa’s economy relies on the service sector to maintain any sort of stability. In fact, the majority of South African businesses come from the service sector, with few businesses creating products that are sold in international trade. Because of South Africa’s lack of involvement in the global economy, it continues to be a weak economy. In class, we discussed the foreseeable problems for South Africa, and found that many contributing factors to the weak economy (unemployment, economic disparities, lack of education, etc.) can be attributed to the economic hardships in the country. However, while many have lost hope that the South African economy will improve in the near future, the citizens of the country continue each and every day to provide for themselves and their families. Specifically noticeable in the various markets, many citizens have turned to entrepreneurial activities in order to support their financial needs.
In order to better understand our class discussion and connect these lessons to actual experiences, I decided to speak with these local entrepreneurs. The previous day we walked through various markets in order to get to the Hop On Hop Off City Bus tour. Thus, I decided to return to these markets and hear the varying opinions of different vendors.
After speaking with several small business owners at various markets in Cape Town, it is clear that their financial stability relies on the tourists that purchase and utilize their products. One vendor specifically mentioned that without the tourists, he would have no business. He stated that many locals do not want the products that many vendors sell, so it is crucial he receives business from tourists. Because tourism drives a large portion of Cape Town’s economy, I was not surprised by his remarks. Additionally, all of the vendors I spoke to would agree they have little hope for the future of the country’s economy, but they are hopeful in terms of their own financial wellbeing. They discussed how the government has played a little role in their successes, which I found to be very enlightening in terms of our discussion in class about the economic issues of the country.
What I found to be the most rewarding and educationally enriching portion of these conversations, however, was listening to honest experiences by each citizen directly. Hearing their own thoughts and ideas about their country’s economy and some of their frustrations lead me to reflect on the true determination each of them faces on a daily basis. These entrepreneurs were not given a hefty loan by a national bank to begin their work, but all of them started with a product and found successes through their own finances. For me, this was the most valuable lesson I learned in terms of South Africa’s economy. Essentially, these entrepreneurs are creating their own economy amongst themselves with their businesses. They use the banks as a place to keep their money, but feel no loyalty or need to invest their money into the economy because they do not see any sort of return. This may be part of a vicious cycle because the economy cannot improve without the support and interest of its citizens. If these vendors have no trust in the economy, then they will only continue to improve their own businesses and further their own successes, without adding anything directly into the country’s economy.
So, what does this all mean? If the market vendors feel no loyalty to their country’s economy, then it creates tension among the South African government and its people. Animosity already exists, and without any implications of improvement for the future, then lots of these vendors and their families will lose more hope. As more entrepreneurs feel detached from the country’s economy, a larger gap will unfold between South Africa and its people. These kinds of broken relationships may cause huge issues for the future of the country, which is why I believe fixing these relationships should be a priority of the country if it hopes to eventually play a role in the global economy. It would be impossible to establish relationships with other countries if South Africa does not have the backbone and support from its own business owners and entrepreneurs. Therefore, the economic leaders of the country must take a step back and address these issues primarily. By answering the following question and investing in the success of its people, the economy will have more potential for a bright future.
What is the incentive of entrepreneurs to invest in the South African economy if the vendors in the market are seeing no return and are basically sustaining themselves already?
