Despite the knocks, there’s hope for small business, says minister Ntshavheni
Small business development department is negotiating partnerships with retail giants to stock locally produced goods
Small business development minister Khumbudzo Ntshavheni believes there is hope for small business in SA. This despite many filing for liquidation during the Covid-19 pandemic.
Ntshavheni’s department is negotiating partnerships with retail giants Dis-Chem and Pick n Pay to stock about 400 locally produced goods.
But she says the goal is to provide support for 2,000 locally manufactured products, and this includes a strategy to ramp up manufacturing locally.
“Our view is that no matter how much money we pump in supporting small businesses if that is not matched in creating a market where those products and services are sold, we would not have done anything,” Ntshavheni says.
Small businesses in the country have taken a huge knock as a result of the Covid-19 economic lockdown with many liquidated over the past year. The Small Enterprise Finance Agency (Sefa) says for many small business owners there will be no Freedom Day celebrations on Tuesday. Sefa says it is looking into alternative funding models.
In the 2019/2020 financial year, Sefa approved loans to the value of R1.4bn, but it acknowledges that there is not enough support to keep businesses afloat.
Business Unity SA (Busa) has criticised the government over its failure to take economic decisions.
“The role of a government is to consult critical stakeholders but not to try to reach consensus but take decisions in the national interest as former president Thabo Mbeki did, that is why we had 5% economic growth,” Busa CEO Cas Coovadia says. He believes that the economic crisis is so bad that SA can no longer claim to be the gateway for Africa.
“We cannot claim that there are no countries doing far better than we are and are primed for investment,” he said. This is despite Ramaphosa having repeatedly said since his inauguration in 2019 that “in Africa lie the solutions to Africa’s problems”.
Ntshavheni’s response to this is that there is just not enough money for an economic stimulus package, but the government is now working on the reallocation of all budgets to help boost small business. She says she is in talks with ministers and premiers in this regard, as well as government agencies.
The Chemical Industries Education & Training Authority (Chieta), which recently managed to get retailers to stock more locally produced detergents, says a major roadblock is capital and market penetration.
“More financial support is needed in the form of both grant and revolving credit finance as SMMEs [small, micro and medium enterprises] struggle with significant cash flow challenges. Another issue is bottlenecks in access to new markets, this is also a major barrier,” Chieta CEO Yershan Pillay says.
He says for its part Chieta is increasing SMME support by 50% to a total value of R15m in the year ahead.
The Small Business Institute (SBI) says a key indicator of progress would be digital investment. It says “data, data, data, is vital.”
SBI CEO John Dludlu says: “As a country we also need to embrace failure as a feature of growth, admit it and learn from it. We hope that this work will encourage leaders to concede that it is time to re-evaluate ideological driven ideas and explore more practical growth orientated approaches.”
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