Minting new generation of investors in South Africa

South Africa is investing millions of Rands in minting a new generation of investors from small enterprises keen on township tourism that the country is targeting for inclusive economic growth.

Known as Hidden Gems, the start-ups are nurtured through grants and cheaper loans for those launching and businesses that are expanding respectively.

Firms that join the programme get 45,000 rands (approx. Sh360,000) while more seasoned ones can apply for up to five million rand (Sh40 million) “to expand and employ more people,” said Phineas Kutumela, 71, who owns a six-room Pimville Guesthouse, one of the Hidden Gems, in Soweto. Mr Kutumeal, a retired teacher of languages, runs the business with his wife.

Enterprise talked with two beneficiaries during the country’s recent tourism fair, Indaba.

Joy Mehlomakulu, the owner of Kwa Bungane, a guesthouse of seven rooms in Ormonde, near Soweto, says owning a boutique hotel is her dream enterprise. Holding a master’s degree in social work with experience in her country and the US, she launched the business in 2008 while still in employment.

“Social work is love for people and saving people,” Ms Mehlomakulu said, explaining her strength in the hospitality business. “My name ‘Mehlomakulu’ means one with big eyes, something that reminds me to always see far and have big dreams”.

Since last year a small number of Hidden Gems is being showcased at international tourism marketing fairs like the recent Travel Indaba in Durban that attracted more than 1,000 exhibitors from around the world in May.

Last year, 90 such companies took part in Indaba, a number that went up this year to 135, registering 50 per cent growth. According to South African Tourism (SAT), the country’s destination promoter, every year the numbers should grow by 50 per cent.

“Small and medium enterprises (SMES) are the bedrock of any economy all over the world,” said Sisa Ntshona, the chief executive of SAT, the organiser of the annual trade fair now in its 27th year.

He said South Africa was nurturing the start-ups because “disruptions will come from the Hidden Gems” who will always exhibit at Travel Indaba that this year injected 53 million rands into the economy of Durban in three days.

These ‘gems’ are fully sponsored during the fairs, but Mr Ntshona said appearance at the gala was only the climax since they are exposed to the rigours of good business practice.

“They are the future stars,” he said about the start-ups that will most likely benefit from the country’s search for new tourism experiences in townships and rural areas.

According to Ms Mehlomakulu, making a customer’s bed and preparing his food “means I am saving you”.

During the interview, the proprietor said she was hosting two Kenyans, one an engineer, who were in South Africa for specialised welding training in Soweto. Mr Kutumela says he invested his pension cash in the business that now employs five people.

and makes R500,000 (Sh4m) in revenues yearly.