Another portion of the money could have been spent on developing the informal retail sector in townships, otherwise known as the spaza shop.

Broad-based empowerment is important, and using established patterns of investment and business such as the stokvel and the spaza would yield bigger gains and help solve high youth unemployment, the biggest threat to stability.

The problem has manifested itself in a number of violent and fatal xenophobic attacks spreading throughout the country since the beginning of the year.

A common thread among the attacks is the competition for resources in resource-scarce communities. As our economy continues to provide fewer and fewer opportunities for participation by members of most impoverished, black communities, living conditions in townships are worsening each year. The economic recession, poor education standards and increasing youth unemployment coupled with an increase in people on the welfare system have resulted in a depressing, disenfranchising, volatile environment.

The retail industry is a billion-dollar industry, but when we speak about retail we focus only on the major industry players such as Edcon, Pick n Pay, Shoprite, Spar, Woolworths and Massmart. Little mention is made of the substantial contribution to the economy by the "poor cousin" that is the township spaza, which has much potential to grow, develop, create jobs and increase the economic activity in economically depressed areas such as townships. 

The spaza, or the corner shop in its refined format, stems from an entrepreneurial spirit that rose among black people during the clutches of apartheid and over subsequent years.

"Spaza" ("hidden" in Zulu) stems from them operating from homes to avoid the government regulations and restrictions on trading in townships.

The spaza shop is an important part of the broader retail market and its effect on the economy cannot be ignored.

Many people have survived retrenchment and gone on to build successful livelihoods through the spaza. Many black people were educated using money made at their family spaza shops. One of the richest, Patrice Motsepe, has said he learnt his business skills at his father’s spaza shop and so did many others who make up the first generation of black business.

A spaza will often be the shop owner’s sole source of income and may even become a family business with all family members participating in running the business.

Spaza shops offer convenience to customers as they are open for longer hours, and although they often have expensive and unstable pricing, they do satisfy daily consumer needs in a way that formal retailers cannot due to shorter shopping hours. 

Spaza shops also help to keep money inside the community.

Spazas play an important role in the economy already. They offer a steady income for those who have been retrenched, those who can never enter the formal economy as they do not have the skills or education required, and those who need access to cash to access opportunities in the formal economy. They are already bridging the gap in an economy that has little capacity to absorb unskilled workers.

Spaza shop owners could do better and be more profitable if they were educated and given knowledge of proper business practice that would eliminate costly mistakes and needless losses. If they were taught business skills they would also be better equipped to negotiate wholesale discounts and find cheaper modes to transport their goods.

Empowering spaza owners would also lessen the contest between foreign and local owners. Local entrepreneurs would be able to create jobs in the community. They could create businesses that could grow and become bigger retail shops and malls.

The government must intervene to help spaza shop owners to formalise their businesses. SA shows migrant spaza shop entrepreneurs exude business intelligence and skills gained through informal training and mentorship provided by relatives and friends.

They employ several business strategies that give them the edge over local counterparts, such as strategically locating spaza shops, frequently buying a variety of stock in large quantities, adopting strict saving practices, offering lower prices, using aggressive marketing tactics and generating loyalty by giving credit.

If the black industrialist project was broad-based and focused on developing a new crop of entrepreneurs, half of SA’s problems could be solved.