In my mind’s eye…
4 years ago I “found myself” deep in the rural village of Nkandla in KZN (and no the former president Zumas house is not in Nkandla). Around me were informal shops, goats, schools and happy kids running around. The backdrop was that of a world that doesn’t exist.
It was a mere 35km’s from town but had taken my friends and I 3.3 hours to get there. How did these people live?
- Street Vendors – R3 billion, 27 million consumers (R3000pm for the 500000 vendors)
- Traditional Healers – R6bn industry with 85% of South Africans relying on them
- Kota ( A bunny chow-like food) – The cheese alone makes Parmalat R200 million pa
- Goat Selling – + R300 million trade the hub of which is in Msinga
Documenting, banking and taxing these industries will bring in revenue and also unlock a lot of value that comes with being professionalised. Even if it is not a traditional bank.
There’s a false perception that we tend to have that we can “hide” from government or we can “retain our advantage” by staying out of “the system”. This notion is completely false if one just looks at the physical evidence but also if you look at the data. The benefit of owning the legal rights and patent rights to our indigenous knowledge will go a long way in laying down the building blocks of generational wealth.
The race for the first cashless economy is currently underway and at the very front is Sweden and [wait for it…] Somalia!! One out of innovative brilliance and the other out of pure necessity. Very important to note then is that either way it’s coming! The perfect response is certainly not wishing it away, or wishing we will be invisible when “they” come looking.
Taxing any industry has shown without exception to attract a lot of criticism. Whether it is people interested in valuing the item or those interested in protecting your rights, there certainly is far greater value unlock than if you were just going on about your non value add activities. That is economic inclusion, economic empowerment. It is hard to argue for any form of regulation, government support and or further assistance and subsidies for areas that are not subject to tax. Either way, hiding and hoping is definetly not the answer.
Digital money is the answer as most of these people are unbanked and following models like they have in Sweden, China, Kenya and Somalia shows how we can apply these technologies in especially the direst of circumstances. Time spent on Social media in South Africa stands at 2h 48min, in the top 15 globally ahead of countries like the USA, India, China, Spain, Germany, South Korea, Canada etc. An opportunity!! And if you think that’s scary, check this picture out. With a 67% mobile user penetration, it means you are more likely to be able to have a video call with an impoverished person than any aid is likely to send lifesaving medication or food! We can deliver cell phones better than aid. So lets use them even more to climb up.
A few of my thoughts and an invite to the conversation. Please.
Let’s modernise, not necessarily Westernise.