South Africa

Mbali makes R80,000 per month selling braaied chicken next to the road

Informal economy expert GG Alcock says many people underestimate the size of small enterprises in townships.

Speaking at the BizNews Conference in Hermanus, Alcock told the story of “chicken dust” seller Mbali.

Chicken dust is essentially a 1-kilogram spiced chicken roasted on a charcoal braai on the side of the road.

“Mbali sells 1,000 chickens a week. She buys them for R50 per chicken and sells them for between R110 and R120 each,” Alcock said.

After all her costs are accounted for, she makes around R20 profit per chicken. That means she makes R20,000 per week, or R80,000 per month, with her fast-food business.

Alcock said Mbali is one of around 50,000 informal economy fast food businesses selling products in townships. They generate around R90 billion annually.

These fast-food businesses are only a small part of the booming informal township economy.

There are around 45,000 licenced taverns that serve food and alcohol, which generate R110 billion per year.

That means the fast food and alcohol sector in the township economy generates R200 billion annually.

Alcock said these businesses are booming for two reasons:

  • People who live in 1-bedroom backrooms in townships down want to cook food in those rooms
  • Load-shedding makes it difficult to cook food, which drives people to fast-food alternatives

Many other township economy sectors generate billions each year and sustain entrepreneurs.

For example, the spaza industry comprises around 100,000 shops, which generate R187 billion in revenue annually.

“Nielsen figures show the spaza shop sector is growing by 24% year-on-year. This is much higher than the formal sector, which grows by 14% a year,” he said.

Alcock said many spaza shops are growing their product range and compete effectively against big retailers like Shoprite and Boxer.

He said the informal economy mirrors the formal one in many aspects, operating differently but powering sectors like mechanics and herbal medicine.

“We need to rethink how businesses, government, and individuals can contribute to supporting these entrepreneurs,” he said.


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