Minister calls for broader economic participation

Tuesday, June 30, 2009

Cape Town - Trade and Industry Minister Rob Davies has called for rigorous measures to be put in place to ensure mass participation of all citizens in the economy.

Delivering his Budget Vote on Tuesday, the minister said government interventions would need to be intensified if the impact of the decline in economic activity in poor communities was to be addressed.

"It is critical for sustainable growth that all citizens are able to participate meaningfully in the economy," Minister Davies said.

He said a lack of access to finance remained a key barrier to the growth and development of small business enterprises.

The minister outlined various strategies to be implemented in a bid to address the challenge.

These would include the Integrated Small Business Strategy and several agencies that have been formed to deliver support and services to small, medium and micro enterprises (SMMEs).

Khula Enterprise Finance will remain the provider of financial support to the under-serviced market of between R10 000 and R250 000 while the Small Enterprise Development Agency (seda) will continue to give non-financial support to emerging businesses.

Minister Davies further said his department would ensure effective use of the National Empowerment Fund for financing of Broad-based Black Economic Empowerment transactions.

"This infrastructure will need to be consolidated and strengthened to meet the massive needs of SMMEs, the poor and economically marginalised, and it is extremely necessary for the state to improve resourcing of this area, which is not effectively served by commercial banks," he said.

Last year, Cabinet supported a proposal to expand Khula's mandate to provide direct lending in its target market segment and Minister Davies has advised that a decision on the matter be implemented as soon as possible.

He urged the new administration to move with speed with the promotion of cooperatives where he felt there had been insufficient progress made.

"Cooperatives hold major promise to promote economic inclusion and an appropriate effective cooperatives model for South Africa needs to be urgently developed and implemented, drawing on the success of province such as KwaZulu-Natal," said minister Davies.

With regards to the Broad Based BEE, the minister said, work on establishing an implementation and measurement framework for the policy and legislation was complete, and all that remained was the appointment by the President of the Advisory Council, as demanded by the BBBEE Act.

The Advisory Council will provide the needed strong monitoring of developments and compliance with the policy and law while it will also identify implementation challenges and recommend solutions.