Uplift SMMEs to spur growth in corporate SA, urges Sanlam Gauge

The Sanlam Gauge, which measures economic transformation in SA, has called out SMMEs as critical to spur transformative growth in every industry. In this year’s Sanlam Gauge, an overall performance score of 65% for enterprise and supplier development (ESD), was recorded for corporate SA as a collective. A relatively low percentage could be attributed to a lapse in developmental and procurement spend during the pandemic. 

Sanlam believes there must be a renewed focus on procurement, enterprise and supplier development of small black- and women-owned businesses. If supported well, there is huge potential for inclusive economic growth, which will translate to increased job creation. SMMEs have the ability to make a significant contribution to economic development and social cohesion. 

The SMME sector is central to the economy’s survival yet, we still fall short

The SMME sector has always been a special part of Sanlam’s mission to help foster a transformed Africa, where all Africans can live with financial confidence, security and prosperity. Ray-ann Sedres, Sanlam chief transformation officer, says: “We know that SMMEs are particularly powerful and efficient levers of job creation. In fact, the National Development Plan forecasts that by 2030, SMMEs will generate 90% of the new jobs required.

“We have acknowledged that the small business sector is the backbone of our economy, and yet we continue to fall short on providing the support SMMEs need to thrive. We need to make it much simpler for SMMEs to access markets, skills, and capital, and we are not referring to handouts but handups. In a country with historically high levels of unemployment, we must make entrepreneurship easier.

“Right now, just 12% of South Africans intend to start their own business ventures, according to the Global Entrepreneurship Monitor. We need to get this number up. A stronger commitment to ESD, which includes procurement opportunities, could play a pivotal role in providing real, sustained opportunities for smaller suppliers.”

Commitment that goes beyond ticking boxes

Sedres says scorecards are useful, but a commitment to the SMME sector needs to go beyond a tick-box exercise. “It’s in corporate SA’s best interests to bolster solid local supply chains through a sustained commitment to uplifting SMMEs. Sanlam is dedicated to doing just that. In 2021, R5bn of our procurement deliveries were from black-owned enterprises, half of which were owned by black women. Our procurement spend from SMMEs was R3.2bn in total.”

In terms of SMME upliftment, Sanlam has myriad initiatives under way: 

• The Sanlam Group ESD programme has supported 2,964 jobs since its start in 2013. 
• The group’s ESD has provided R146m in funding to help SMEs with post-pandemic recovery.
• Sanlam supports 26 black-owned SMEs, 15 financial planning practices, and 144 black intermediaries. R5.2m has also been invested in black broker development support.
• The group is on the brink of enhancing its Sanlam Investments’ Investors’ Legacy Range and Resilience Fund — both aimed at job creation and preservation primarily in the small business sector — with further SMME offerings. 
• These funds will shortly be joined by other initiatives in the SMME space, which have recently received board approval.
• Sanlam has supported the Association for Savings & Investment SA, with more than R50m for funding local sector suppliers. 

Sedres says: “Our country desperately needs 11-million new jobs in just eight years to live true to the 2030 National Development Plan commitment. Without SMMEs, we won’t get close to this target. And without corporate SA’s support, SMMEs cannot succeed. They’re our best lever to combat the country’s unemployment rate. They’re also the best way to solve the challenges we face as SA Inc. By uplifting SMMEs, we uplift the nation.”

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This article was paid for by Sanlam Gauge.