News - Benefits of audit profession in transformation of township economy

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Benefits of audit profession in transformation of township economy

Source By By Sipho Livhusha (MBA, CISA), ISACA Board Director
1 year ago

The Gauteng Department of Economic Development, under the leadership of Parks Tau and former Gauteng Premier David Makhura, signed into law in April 2022 the Township Economic Bill Act (TEBA). As Black Management Forum (BMF), we were party to the Act through the submission of documents or inputs to the Act during the process of drafting the Act. It is therefore not surprising that the township economy is one of the programmes adopted. Historically, the establishment of townships was intended to keep Black people, the marginalised and customers closer to industrial areas. These dense urban settlements were not designed for business. It is therefore through TEBA that transformation in our township can take place. Our government has created funds that are worth over R800 million to support SMEs from townships to be able to operate at a level required by businesses. It is therefore essential that organisations such as BMF capacitate the township businesses, associations and chambers to operate at a level that is required. The Township Economy Act is meant to ensure the procurement of services to the public sector from SMEs grows. As BMF Soweto, we have embarked on various programmes to professionalise businesses in the township under the theme of revitalise, reimagine and agility and developing of township economy in a new normal. Townships have land, consumers, malls and many other businesses and hence the development of the township economy will lead to the development of business and reduce unemployment. We adopted a business in Soweto where the business was operating from a shack and are in process of ensuring that it gets funds and bigger professional business premises to operate from. We have also adopted the chicken farm business, which will follow the same model to professionalise the business. There is also an SME business in Soweto that produces tissue paper. We are in the process of ensuring that they are capacitated. Recently, as a country, we have had problems with illegal mining and therefore mining transformation is also a key element of the township economy. Some of the research indicated that mining is not transformed in a manner that benefits the people of the land. Through working with various professional bodies such as SAIGA, the transformation in these sectors can be realised. Auditing is essential in ensuring that business values are adhered to, and strategic objectives and goals are realised. Through tried and tested methodologies from audit and accounting, this can assist the funders to be prudent when it comes to the utilisation of resources that are borrowed from SMEs. An example is the aspiring SMEs requiring funds to run a gas business in townships such as Soweto, Mamelodi, Umlazi, etc. Proper controls must be put in place to make sure such business models are viable and are monitored from end to end, ie, planning, delivery of services, managing of service and monitoring stages. Therefore, the expertise and role of professional bodies such as SAIGA are essential in driving township economic development in South Africa. This is to add value and provide advisory capacity in tightening controls. South Africa’s taxi industry is one of the industries that contribute immensely to the South African economy through transport. This industry operates in various townships across the country. It is a multibillion-rand industry. If organisations such as BMF can work with taxi associations to professionalise the industry, it can create jobs and sustain our economy. Sports is another big industry that has its roots in the township. Big football clubs including Orlando Pirates, Kaizer Chiefs and Mamelodi Sundowns command huge support. These teams generate more revenue through supporters and sponsorship. The audit profession can help ensure the industry is more professional and various stakeholders are equipped with skills to run and manage the football industry. This may lead to more job creation and sustainability. The same goes for the boxing industry, where business owners are unable to maintain the sport financially. An audit in this regard may contribute to the effectiveness of the boxing business. Due to the impact of IT, it is very important that townships embrace the 4IR revolution to remain competitive. There is a great need for townships to be digitally transformed. Fibre technology makes it easy for businesses to process transactions anytime, anywhere. Unfortunately, the township lags when it comes to the use of technology. Those who are seeking jobs with relevant skills can work anywhere if they have internet connections. An audit can assist by performing a review when such technologies are implemented in terms of quality, time and scope. It is essential to consider audits during the entire process as it adds value to the business and ensures accountability. It is not just to produce a large number of goods and services, but quality products that both consumers and businesses can be happy about. As we are now part of the global community, our business in the townships and mining must be agile to provide products and services at the current required needs. This will also assure various stakeholders have confidence in investing in the townships. Through collaboration and partnership between the public and private sectors, we can achieve objectives where the marginalised have power and are economically sustainable through the transformation of the economy in the township and mining. This will also assist the government, whereby more jobs will be created and citizens are able to share in the wealth of this country.