BUSA presses for SMEs to be paid quicker

Wednesday, March 16, 2011

Pretoria - Business Unity South Africa (BUSA) has suggested a 30-day timeline for the payment of small and medium manufacturing enterprises (SMEs) by other businesses, while also calling for better co-operation between the two.

BUSA also called for maximum outsourcing and subcontracting opportunities.

"BUSA suggests a 30-day timeline and appeals to all organisations to implement this wherever possible," spokesperson Masego Lehihi said on Wednesday, adding that the country had one of the lowest entrepreneurship activity rates globally.

"Ensuring greater consistency in paying SMEs on time, in shorter cycles, and opening opportunities for them to provide manufacturing inputs to larger manufacturers will be a valuable step in encouraging vigorous entrepreneurship," said BUSA.

Consistency must extend across the board between all levels and sectors and is critical for small business development.

"If the stimulation of a culture of entrepreneurship receives support across society, small business will be promoted. Self-employment will then become a much easier accepted alternative," said Lehihi.

Self-employment is likely to make a greater contribution in reducing unemployment, assisting the economy to create more jobs. 

Government has branded 2011 as the year for job creation, as was stated in the State of the Nation Address (SONA) delivered by President Jacob Zuma. He announced several initiatives to boost job creation, including the setting up of a R9 billion jobs fund.

A FinMark recent report indicates that 43 percent of all private sector jobs in the country are created by SMEs. 

BUSA said most countries reduced unemployment via substantial efforts to encourage self-employment, a valuable lesson that South Africa must capitalise on. 

"A strengthened SME sector will also encourage greater competition, ultimately ensuring that the South African economy will compete better for investment on the global stage, especially in relation to our BRICS counterparts and numerous other key emerging markets," said Lehihi.

It has also established a Task Group on SMEs that will take further efforts to promote entrepreneurship.

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