Hyperlocalising the Value Chain: The Multiplier Effect in Township Economies
Posted by Floyd Baloyi (Community Manager) 
on
17 December 2025, 12:50
SAST
Abstract
The structural legacy of South African townships as "dormitory towns"—labour reserves with limited internal economic logic—has created a persistent phenomenon of economic leakage.1 Income generated by township residents is predominantly spent on goods manufactured and retailed by entities outside the township, resulting in a net capital outflow. This article argues that the "SPAZA Supply+" model, by establishing a closed-loop, hyperlocal supply chain, serves as a mechanism for Township Import Substitution. By integrating local manufacturing, logistics, and retail (spaza shops), the model plugs economic leaks, accelerates the local multiplier effect, and fosters endogenous community development.
