White River - Although there has been progress on policy and the development of support infrastructure for SMMEs, more still needs to be done, says Trade and Industry Deputy Minister Elizabeth Thabethe.
“As we take stock of progress made so far, we acknowledge that there has been some progress, especially on policy and development of support infrastructure for SMMEs (small, medium and micro-sized enterprises).
“We do, however, still need to encourage further development and growth of SMMEs and co-operatives as a vehicle for job creation and economic development of the country,” said Thabethe on Wednesday.
She was speaking on the first day of the two-day annual Small Business Summit.
The Department of Trade and Industry (dti), she said, had amended the Cooperatives Act, where there is provision for the establishment of the Cooperatives Agency, Cooperatives Tribunal and the Cooperatives Academy for training.
The apartheid legacy had resulted in the dislocation of township and rural businesses, which has affected the development and growth of businesses in townships.
There has, however, been an increase in the number of businesses entering the market, as well as an increase in entrepreneurship at around 9.1% in 2010, although this was below the recognised standard of 11.5% per annum.
In 2010 - 2011, the department conducted a review of government SMME support measures with the intention of taking stock of interventions in the sector by government. The review proposed several interventions -- with some already being implemented -- among those being market access for SMMEs as well as township and rural business strategy.
“There is also a need to relook at and resuscitate the old industrial parks and business hives to provide for suitable business infrastructure for small businesses,” Thabethe told the packed hall, where the summit is being held.
Progress made in addressing economic challenges
Progress has been made in addressing the scope and scale of economic challenges, Director General of the dti Lionel October said.
“I think everyone will agree that the central challenge that we face as a country is that of unemployment,” said October.
The country’s unemployment rate was at around 25%.
“It’s not to say that nothing has happened in this country. Firstly in 1994, this economy had under 9.5 million jobs. Currently, we’re sitting at around 13.5 million jobs. We created four million jobs,” said October, adding that the central challenge was to grow the economy.
“We are sitting at just above 2% growth. Given our young population, we must grow at about 6%.”
The agricultural sector, said October, could contribute to addressing the problem of unemployment, which is high amongst the youth.
Other governments around the world had given much support to the agricultural and agro sector, said October. “We must build up that sector.”
“At the last Cabinet Lekgotla, government decided to prioritise the sector. It will introduce a R1.2 billion incentive,” said October.
The incentive will be for small farmers to supply big business with products.
The summit is taking place in the farming town of White River in the Mpumalanga, which is part of the three fastest growing provinces in the country.
MEC for the Department of Economic Development in Mpumalanga, Yvonne Phosa, said the provincial unemployment rate in the second quarter of 2013 stood at 29.4%. The province has a youth unemployment rate of 43%.
“The figure indicates that there’s a sizeable task ahead of fighting poverty, unemployment and inequality. Efforts need to be biased to the youth,” said Phosa.
There were currently approximately five million SMMEs in the country.
Thabethe also raised concern at the practice of South Africans renting out their businesses to foreigners.
“The scourge, which has been a sad one for us, is that of South Africans in townships selling and renting their businesses to foreigners. It does not assist us as government in our efforts to support the informal sector,” she added.
The Small Business Summit is held annually in accordance with the Small Business Act. - SAnews.gov.za
