South Africa: The corner shop is more that just a 'corner shop', it's Africa's economic heartbeat

Zawya

23-05-2025

Hundreds of thousands of township taverns, rural spaza shops, and informal salons serving tens of millions of South Africans are just as important in driving the economy as the decisions made in corporate boardrooms.
These small, informal businesses are the heartbeat of the economy, providing a vital lifeline for rural, peri-urban and township communities. From the bustling streets of Gauteng to the villages of rural Eastern Cape and KwaZulu-Natal, corner shops are hubs of activity, connectivity and commerce.
They deliver essentials every day, like electricity, airtime, data, and digital services, to people in underserved communities who might otherwise go without. They ensure that communities can purchase necessities without having to travel long distances at great expense.
And these informal stores provide employment for millions, particularly for marginalised groups like women and youth, who may not find formal jobs. By keeping money circulating in communities, they play an invaluable role in the development of underserved areas where economic opportunities are rare.
Micro traders, massive impact
The numbers in the informal sector are staggering.
According to the International Labour Organization, over 85% of employment in Africa is informal, driven by necessity, ingenuity, and resilience.
In South Africa, this translates into income for 2.5 million workers (excluding agriculture) and roughly 17% of total employment.
Trade Intelligence, meanwhile, values the informal grocery sector, including spaza shops and mobile traders, at R184bn.
According to Trade Intelligence, some 11.1 million South Africans do their grocery shopping at these stores, citing convenience and low prices.
Scratch beneath the statistics and you'll find numerous stories about how informal traders provide a thread of connection for their communities. These traders operate where banks don't go, where infrastructure is thin, and where traditional retail chains find it unprofitable to operate.
They are often the only touchpoint for a family to buy electricity so the children can study, for a job seeker to top airtime so that they can look for work, or for a student to buy data for online learning. But informal traders are not points of commerce. They're community hubs where people meet, creating a sense of social coherence.
Challenging environment
That said, despite their grit and resilience, informal traders operate in a challenging environment. Cash crime, limited access to finance, rising prices, and regulatory barriers are some of the obstacles that micro traders encounter every day. They also face growing competition from formal retail chains.
It's thus vital that South African policymakers and big business work with informal traders to help them strengthen and grow their business. From improving access to credit to strengthening supply chains in every corner of the economy, there are numerous opportunities to nurture the vibrant informal trade ecosystem.
Fintech innovation is an important lever for enabling township and rural entrepreneurs to provide better services to their communities. By bridging the gap from modern financial systems and supply chains to the informal market, we can help extend financial inclusion to every corner of the economy.
Fintech platforms bring a new digital layer to the informal sector, transforming the economics for the better. With a single terminal from a provider like Kazang, a merchant can sell prepaid airtime and electricity, accept bill payments, access capital, make cashless payments to suppliers, and accept digital and card payments from customers.
This doesn't just create convenience. It makes transactions faster and safer. Stock and cash flow become easier to manage. Traders gain the ability to earn commissions on value-add services and attract footfall by becoming one-stop shops.
All of this puts more margin and more power in the micro-merchant's hands.
The impact on the community that the informal trader serves is just as profound. A R10 airtime purchase isn't just a sale. It is a gateway to job applications, schoolwork, side hustles, and family connections. Data creates access to information. Electricity nourishes families and minds. Airtime can unlock new opportunities to create better futures.
For that reason, one of the keys to growing the larger economy lies in empowering the merchants who already serve their communities with trust, proximity, and persistence. Each one of them is a node in a grassroots economic network. Energising townships and revitalising the economy starts right here at the corner store.
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Michael Write,