Small Business Development Minister Stella Ndabeni has revealed that South Africa will champion the cause of the establishment of a G20 Micro, Small, and Medium Enterprises (MSMEs) and Startup Working Group.
The Minister was delivering remarks at the inaugural Global SME Ministerial Meeting in Ekurhuleni on Wednesday.
The sector currently enjoys inclusion in the G20 through the Startup20 Engagement Group.
“For the MSMEs, we will bolster support efforts to support market access, access to capital and ensuring that MSMEs are recognised as strategic actors, not policy afterthoughts.
“This is why we are advocating for the establishment of a dedicated G20 MSME and Startup Working Group to be formally included in the G20 declaration in November. Let this be one of the key legacies of our collective efforts as we make history,” Ndabeni said.
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The Minister emphasised the importance and role that MSMEs play in reaching even the marginalised.
“MSMEs are not just participants in our economies. They are engines of inclusive growth. They are anchors of community resilience and they are incubators of innovation.
“They generate livelihoods in the places where people live, particularly in marginalised… areas such as the townships and the rural areas. They are agile and adaptable in a world that is volatile and fast changing.
“But they are also vulnerable, especially if we do not enable them to adapt to new global standards, digital technologies and climate smart markets. It is up to us, as policymakers, to ensure that they are effectively enabled through policy and targeted ecosystem support,” she said.
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Ndabeni called on delegates at the Ministerial Meeting to share best practice and to forge new strategic partnerships at multilateral and bilateral levels to “strengthen our country level SMME support ecosystems”.
“Global value chains are rapidly changing, with trade protectionism threatening markets and MSMEs, especially in developing and least developed countries. This is something we need to be upfront about… and find practical ways to soften the impact,” she said.
Turning to the issue of funding for MSMEs, Ndabeni acknowledged the challenge facing entrepreneurs, particularly those in developing countries.
“Fintech has brought tens of millions of entrepreneurs and SMMEs into the formal financial system and digital matchmaking platforms are now connecting entrepreneurs with more appropriate funding instruments.
“But the small business and startup funding gap remains extreme. By example, Africa has 18% of the world’s population but receives less than 2% of global venture capital flows. This has resulted in the continent moving to tech hubs elsewhere to register and commercialise their intellectual property and we ought to fix that,” she said.
Ndabeni said although the South African government is working to assist small business, the funding gap is estimated to have reached some $20 billion.
“This despite our effort as government to de-risk credit extension through guarantees and blended instruments. The funding need is enormous.
“This [meeting] must propose solutions to this question of capital access. Here is the call to action: Let this ministerial meeting mark the beginning of a bold new global compact for MSME development, one that expands access to markets, unlocks affordable finance, accelerates digital inclusion and ensures that women, youth and underserved communities are not spectators but architects of economic transformation,” Ndabeni said. – SAnews.gov.za
