Fixing the economy one spade at a time

Wednesday, October 16, 2019

Armed with a passion for entrepreneurship, a knack for a good conversation and a love for small business, Small Business Development Minister Khumbudzo Ntshavheni is set on helping this sector to succeed.

It has been a few months since Ntshavheni took her oath of office in May, becoming the second Minister in the stand alone portfolio - formed in 2014 to look into the development of Small, Medium and Micro Enterprise Businesses (SMMEs) and co-operatives.

“The fact that I come from an entrepreneurial background has played an impact in terms of getting me to understand the department fairly quickly,” she says.

Ntshavheni is well aware of some negative public sentiment that the department has not adequately assisted small business since its establishment.

However the department is turning a corner on the matter with interventions made in the fifth administration. The department is keen to focus on the implementation aspect which the Minister admits, has been lacking.

Further adding impetus to the need to assist small business, the Minister has embarked on a series of engagements with pioneers and stalwarts of entrepreneurship and the township economy to gain a sense of what is required by industry.

Recently the Minister engaged respected black business leader and founder of African Bank, Dr Sam Motsuenyane at his Winterveldt, Pretoria, homestead.

Challenges including access to business essentials like water rights, the payment of small business on time for services rendered, as well as funding were flagged by the business pioneer.

The meeting between the two mimicked a gathering of old friends peppered with laughter and frank discussion.

Ntshavheni was inspired by the business tenacity and experience of the 93-year-old who in his day fought to make it in business and succeed despite the tough apartheid laws of the time.

Currently, the department is looking to implement new legislation that will go a long way in aiding business. The country has experienced a wave of attacks on both South African and foreign nationals.

“We cannot allow people to continue to sell illegal and counterfeit goods. We have decided that we are going to regulate what sectors are South African protected and what sectors foreign nationals can play in - but they must be licensed,” she said.

This licensing she said, will also help business people to access incentives provided by government.

“We are going to regulate how trade in our country takes place. It will protect not only South African business but also the economy,” she said.

The department has already put its shoulders to the wheel, with the State Law Advisor already in the process of drafting the enabling legislation.

The legislation will address the participation of foreign nationals in certain sectors of South Africa’s small business landscape, while work is also underway to create a small business ombudsman.

Recently the Department of Small Business Development announced its decision to establish the National Small Business Advisory Council (NSBAC) which is intended to advise the Minister on several matters.

Representing and promoting the interests of the SMME sector including cooperatives, the advisory body will advise Ntshavheni on strategies to identify market failures affecting the sector.

It will also advise her on steps to be taken to create access for SMMEs and cooperatives into value chains among others.

Nominations to serve on the body closed earlier this month. Those who will serve on the council will do so on a part-time basis for a three-year period commencing on 1 November 2019.

While a lot of spade work remains to be done, the Minister is proud of achievements made by the sector, particularly in the manufacturing sector.

“I am very impressed yet disappointed that we’ve not supported our SMMEs in the manufacturing space as much as we should have,” she said in an interview with SAnews.

However, incubation hubs like Furntech, are doing their bit in order to help entrepreneurs.

Located in several provinces around the country, Furntech is the country’s centre of excellence for the furniture industry. The incubator is supported by the department’s Small Enterprise Development Agency (Seda).

“I’m impressed with what our people are doing, most of them have had no opportunities to be marketed. They have not had opportunities to be supported by their own government to meet certain standards for export purposes for example. We want to change that,” said the Minister.

Proudly South African, which came about from the 1998 Presidential Job Summit convened by President Nelson Mandela, has consistently called on citizens to support local businesses.

The non-profit organisation which was established with the purpose to fight poverty, inequality and unemployment, has consistently highlighted the importance of manufacturing as a job driver in the economy.

In the same vein, government has consistently urged business to retain jobs despite the tough economic environment.

 In return, companies like Lasher Tools, a leading manufacturer of hand tools, has heeded this call in an economy which saw unemployment rise by 1.4% to 29% in the second quarter of 2019.

 “We have never retrenched in Lasher’s history. There have been times when we’ve had to retrench but we have instead opted for short-time, operating the factory for four instead of five days,” says the company’s Marketing Manager Albert Louw.

Short-time involves the reduction of working hours for workers at the company’s three factories, two of which are located in Johannesburg and one in KwaZulu-Natal.

Lasher Tools originally started off manufacturing two products. Today the company produces a range of 1200 products including spades, rakes and wheelbarrows widely used in homes and industries like mining and construction.

This is an impressive feat for the 90-year-old local company which is also a member company of Proudly South African.

It is expected of member companies of Proudly South African to make a meaningful contribution to building the country’s economy and also to help alleviate unemployment. Companies are also expected to help job retention efforts.

To date, the company has a staff compliment of 879 employees.

This is despite moves by other local companies to have their manufacturing done at a cheaper price oversees.

This environment is further compounded by the sale of cheap imports.

Constantly applying elbow grease in its resolve to remain proudly local, Lasher Tools has previously appealed tariffs on cheaper imported products which were of a poor quality and won.

In 2015, the International Trade Administration Commission of South Africa (ITAC) imposed anti-dumping duties on wheelbarrows originating from outside the country after the company submitted an application on behalf of the Southern African Customs Union (Sacu) region.

While imported products continue to be cheaper, the company has appealed to consumers to purchase locally made products which tend to be priced above cheap imports.

The company has bemoaned the skipping of tariff codes which result in an uneven playing ground for locally produced goods.

Not only are locally produced goods of a higher quality, the sale of locally manufactured products benefits the economy.

 “The first thing you benefit from is the value of the product, the second thing is that money spent on that product stays in the country and generates more jobs, allowing for factories to grow and by default [allow] employment to grow,” says Louw.

Proudly SA’s Public Relations Manager, Deryn Graham says it is crucial for South Africans to support local companies like Lasher.

“What we saw during the company’s factory tour was job creation in action. It’s an amazing local company which is currently running its factories five days a week,” said Graham who toured the company’s Wadeville factory recently.

Louw told SAnews that the company which also exports tools to 38 countries, including Madagascar and Australia, is committed to creating a further 400 new jobs.

“All we want to do every day is to make sure that we help the economy to grow and sure it’s not a sexy product, it’s a spade,” he says.

But just how difficult is it for consumers to buy local?

“It’s very easy to make ‘buy local’ choices. If you don’t see a Proudly South African tick which says the company is a member company, you can at least check if the product is made in South Africa. If it is made in South Africa, it is creating jobs. If you buy something made in another country, [that] is a job created in another country,” said Graham.

While challenges in the manufacturing sector cannot be resolved overnight, local companies are responding to government’s call for all hands on deck to grow the economy, despite the flagging of energy availability, among others.

Meanwhile, the Minister is confident that next month’s Investment Conference will highlight government’s commitment to improve the environment for business to thrive.

The second annual conference, which will be presided over by President Cyril Ramaphosa, will feature a dedicated session on small business.

 “We will have a full leg that focuses on small business and start-ups. Small businesses are effective suppliers of big business,” said the Minister.

Ntshavheni is part of the Inter-Ministerial Committee organising the three-day conference which will get underway on 5 November at the Sandton Convention Centre, in Johannesburg.

While running a business in South Africa or any other country in the world is not as easy as falling off a log, the Minister has encouraged entrepreneurs to never give up on their dreams.

“You have not learnt anything in business until you fail, you must fail and then rise,” she said.

The Minister who admits that she would go back to her entrepreneurial roots in a heartbeat, has also urged entrepreneurs to never be shy to take risks.

 “You must be willing to let go and leave your comfort zone. You also need to put yourself out there and ask for help,” she said.

One can clearly see that with a can-do attitude and not being afraid to call a spade a spade, government and business are moving the economy in the right direction, one shovel at a