Township and Village Enterprises (TVEs) are market-oriented state-owned businesses operating in small and medium-sized towns and rural areas. Entrepreneurs such as local businesspersons and farmers, primarily sustain these types of enterprises. TVEs are run by arms of the central government, such as regional and local governments based in small and medium-size towns and rural areas. Their origin dates to the late 1970s in China. 

These enterprises play a significant role in transforming a country’s economy by starting from rural areas. 

Historically, China is known as a country whose economy was largely dependent on an agrarian and peasant-based society for many centuries. Before urbanisation and industrialisation transformed the country, most of the population lived in rural areas and depended on agriculture as their main source of livelihood. Farmers played a crucial role in transforming China’s economy into one of the world’s largest economies it is today and remain the backbone of food production. 

Through the introduction of market reform initiatives such as TVEs, power and authority were decentralised giving arms of central government some level of independence and flexibility to promote a balanced development while keeping agricultural production at heart, particularly in terms of food security and cultural heritage. 

Although TVEs in China were mainly operated in non-agricultural sectors, such as manufacturing, construction, transport, and services, including agriculture in the equation could mean well for Namibia since it’s the second-largest contributor to Namibia’s GDP and exports. 

Agriculture is the primary source of employment for about 70% of the population in Namibia. This gives Namibia a big competitive advantage over other countries. 

TVE status in Africa and Namibia

On the African continent, a few countries such as Ethiopia, Kenya, and Nigeria have similar initiatives intended to promote rural development and local enterprises to improve the well-being of their citizens. 

The Ethiopian government has promoted rural industrialisation through various programmes, including establishing small and medium-sized enterprises (SMEs) in rural areas. 

The Kenyan government has several initiatives to support rural enterprises, such as the Kenya Industrial Estates (KIE), which provides financial and technical support to small businesses in rural areas. 

In the case of Nigeria, the country has various programmes designed to boost rural economies, including the National Directorate of Employment (NDE), which supports small-scale enterprises in rural areas. 

As for Namibia, the approach to rural revitalisation seems to be slightly off frequency. It is worth remarking that there are efforts from the government and concerned stakeholders to empower rural communities such as subsidising small businesses (i.e. small-scale farmers) to transform the livelihood of communities and attempt to boost economic activities in small to medium towns and villages. 

These are noble ideas; however, they seem to exert a little effect in promoting rural industrialisation. 

Additionally, financial institutions that were designed to assist SMEs, have transformed into commercial banks charging exorbitant rates.  Namibia does not have TVEs in place, nonetheless, she seems to have noble initiatives to revitalise rural areas, however, more should be done to realise significant economic value from these underutilised areas. 

Why should Namibia establish TVEs?

Namibia, a country with a relatively small population of about three million people, with a promising and hopeful future, endowed with abundant natural resources ranging from wildlife, minerals, natural gas, oil, marine life and many more, yet the majority of her inhabitants are faced with devastating and life-threatening challenges such as malnutrition, unemployment, increased rural to urban migration, gender-based violence and many other social ills. 

Establishing TVEs could be the answer to addressing these social ills to reduce diet-related diseases, create employment, reduce rural-to-urban migration through providing services in rural areas that could be one of the main causes for people to flock to towns and cities, and potentially lessen GBV and other related social ills. 

Introducing TVEs in Namibia could shorten the distance between the producer, retailer and the final consumer. 

The government could establish TVEs in zones where local businessmen and farmers can bring their produce at minimal costs and where retailers and the final consumer can buy depending on affordability. These business activities have the potential to create jobs for local people in rural areas, inflation may well be kept at bay since not only money, could be effortlessly accessible but plenty of food would be supplied at affordable prices, striking a balance between demand and supply. 

Local government may also generate tax revenue from these business activities, which could be reinvested in public services and infrastructure development in rural areas and reduce rural-to-urban migration, bridge the income gap between urban and rural dwellers, and reduce social and economic tension. 

When the local government introduces market initiatives such as TVEs to generate funds to finance their activities and operations, this could reduce the burden of fiscal decentralisation and inter-governmental transfers in terms of financial resources on the central government to always allocate funds to assist local governments. 

The formula for TVE establishment is to conduct market research, consult local businesspersons and farmers as widely as possible in rural areas, consult experts, formulate policies to serve as guiding tools for the entire operations and functionality of the enterprises, construct infrastructure, and hand over to local government for entrepreneurs to sell their produce. 

What feeds TVEs?

Local entrepreneurs such as farmers and businesspeople produce food and other goods for sale to retailers and final consumers at TVEs. This is how TVEs subsist through agricultural and other entrepreneurial activities in small to medium-sized towns and villages. Hence allowing local farmers access to means of production and markets that are not far from their farms (TVEs) where their produce could be sold would greatly improve the livelihood of every Namibian. 

Eventually, this could decentralise services and contribute to food security. This repositioning may perhaps ensure the availability of good quality, healthy, and affordable food to everyone in the country in a more sustainable way. It would further give people a variety at lower and more affordable prices. The more food there is, the less expensive it becomes, placing the public in a position where they can afford to bring food to the table. 

When farmers are empowered and assisted to access domestic and international markets, healthy food will be plenty, and the government will generate tax from such economic activities which assures certainty for the future. 

*Lazarus Masule Jamu holds a Master’s in Project Management from Yunnan University of Finance and Economics, China.