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Industry request President Zuma to call a small business indaba
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10 June 2014

President Zuma will deliver his State of the Nation address on Tuesday 17 June.

By all accounts this will be the President’s toughest address to date: Unemployment, especially under the youth remains stubbornly high, economic growth has been seriously affected by the recent strikes, the economic performance of our business sector has been lackluster further affecting the government’s ability to raise funding for infrastructure, and we face further credit downgrades.

Government is well aware that storm clouds are gathering and in response have identified the National Development Plan as a means to address youth unemployment and improved economic growth.

On Monday, as part Youth Day celebrations Deputy President Cyril Ramaphose said that youth unemployment is probably the single most critical challenge facing South Africa today when he spoke in the Northern Cape on Youth Day at the Commemoration of the 38th Anniversary of June 16 1976. “More than a third of young South Africans in the labour force are unemployed. In every province, the unemployment rate among youth is more than double that of people over 35 years of age.” Mr Ramaphosa adds, “The youth are particularly vulnerable to unemployment, poverty, inequality and low skills levels. If South Africa can effectively address youth unemployment, not only will the country lift millions of South Africans out of poverty, but it will also place the economy on a trajectory of sustainable, inclusive growth.” In the last five years alone, R2.7bn has been set aside for youth entrepreneurship finance and support.

The Southern African Institute for Business Accountants (SAIBA) believes youth unemployment can be addressed by the development of the Small Medium Enterprise sector.

“Key to our economic development and growth is the development of the SME sector in South Africa. In comparison to other developing nations South Africa has not done enough to unlock the potential of our SME sector. Red tape, limited access to infrastructure such as sanitation, electricity, and transport makes it difficult of SMEs to flourish and create employment. Many entrepreneurs are also subject to poor education and therefore are not always aware of the opportunities available to them” says Professor Dovhani Thakhathi, President of SAIBA.

Thakathi therefore welcomes the establishment of the Small Business Ministry by President Zuma. “The National Development Plan put small businesses at the centre of our 2030 vision. Small businesses hold the key to create sustainable jobs and can place the economy on a trajectory of sustainable growth”, commented Professor Thakhathi on the eve of the State of the Nation Address.

Stiaan Klue, Chief Executive of the SA Institute of Tax Professionals (SAIT), agrees with Professor Thakhathi. “We need to go a step further. Government needs to reduce red tape in the processes required to create and run a small business. We need a national accord – Government, educational institutions, large business and the Banks need to join the struggle and close the fragmented gap in uplifting and facilitating sustainable small businesses”.

Klue believes that the responsibility for the development of SMMEs cannot be pin-pointed at present, and appears to currently lie somewhere between the Ministry of Finance and the Ministry of Trade and Industry. “This division of responsibility is not desirable, and SAIT welcomes Government’s announcement on the introduction of the Small Business Ministry as a central repository. The concept of this important Ministry was first mooted to the public at SAIT’s annual Budget Breakfast in 2013, and it has the potential to fundamentally benefit the South African economy from the grass-roots level and upwards.”

According to Professor Thakhanthi, “What we need is a small business indaba that will develop a white paper. We need all stakeholders to sign a small business development accord.”

Professor Thakhathi believes that the indaba must set as its main objective “making South Africa the most small business-friendly country in the Southern hemisphere”. “With co-operation between government, big business, educational institutions, banks and the various business chambers we can really get small business to grow.

According to Thakhathi the indaba will lay the foundation for building a business culture in South Africa based on the following key principles;

  • Create business certainty for SMEs by adopting polices to make it easier for SMEs to access labour, capital and technology,
  • Create a regulatory environment that small business can understand and influence,
  • Ensure that government programs for SMEs are accessible, properly funded and effectively communicated,
  • Deploy educational and training programs that are future oriented and addresses the changing needs of SMEs,
  • Create long-term growth opportunities for small business through government and big business procurement.


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