Small Businesses Need Your Help, Mr President

I am sure you understand their frustrations. I therefore urge you to start cracking the whip against culprits within government who abuse small businesses by not paying them on time. Small businesses do business mainly with government departments, and if the invoices of small businesses are not paid within the 30 days, small businesses run the risk of collapsing due to financial distress and constrained cash-flows.

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Small Businesses Need Your Help, Mr President-Surge Zirc SA
Spaza Shop Image/File Credits: Google

Part of our radical economic transformation agenda must be to turn around the picture of township economies through practical interventions such as infrastructure investment, access to funding, market access and easing the regulatory burden, writes Pule Mabe.

Dear Mr President,

Firstly, let me commend your government for placing entrepreneurship and small businesses development at the centre of your economic agenda. You will surely agree with me that 20 years since our freedom, the participation of black people in the country’s economy still leaves much to be desired.

It must trouble our collective conscience as a nation that 24 four years since the dawn of our freedom and democracy the economy of our country still resides in the hands of a tiny minority.

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Your government, Mr President, carries a responsibility to help correct this historical injustice.

Our point of departure is that small businesses can be the backbone of any economy and the main driver of economic growth, poverty reduction and job creation. A healthy small, medium and micro enterprise (SMME) sector can make a massive contribution to the economy by creating more employment opportunities and generating higher production volumes.

Mr President, our country’s high rate of unemployment and extreme inequality call for bold and far-sighted interventions. The National Development Plan (NDP) is the vehicle which seeks to address poverty, unemployment and inequality. Meeting the NDP’s growth target of 5.4% for the next 16 years would not only guarantee South Africa’s material prosperity, but would be an elevating and inspiring narrative for the country.

One of the specific targets of the NDP is to reduce unemployment to 6% by 2030 through the creation of 11 million jobs. The NDP projects that if we implement the full range of its recommendations, our economy will grow at 5% per annum, with 60-80% of this value being generated by SMMEs and expanding businesses, and that this sector will create 90%, or 9.9 million, of the 11 million new jobs by 2030.

You carry a responsibility, Mr President, to do whatever it takes to help promote access to economic opportunities for all historically marginalised people of our country in order to give practical meaning to the pledge we made during our struggle for liberation that we would never consider our mission complete and our liberation achieved, if the people of our country are still not freed from economic exclusion and deprivation.

Revitalising township and rural economies

I urge you, Mr President, to pay particular attention to revitalising township and rural economies. You know as much as I do, that small businesses and co-operatives find it difficult to flourish in townships and rural communities due to inadequate investments in infrastructure and lack of appropriate policies to protect informal businesses.

Many townships are a hive of economic activity, yet the bulk of the products and services bought by township residents are from outside. Part of our radical economic transformation agenda must be to turn around this picture through practical interventions such as infrastructure investment, access to funding, market access and easing the regulatory burden.

Mr President, many small businesses have complained that when they seek assistance from government, they are sent from pillar to post. Indeed, the approach of co-location by the Department of Small Business Development may ease some of these frustrations. Entrepreneurs will now be able to register companies, register with SARS and get business plan advice services – all under one roof.

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Mr President, as your experience in business will attest, when small businesses knock on the doors of government, they are not looking for hand-outs. They are looking for support, opportunities and market access. Government has the lever to unlock economic opportunities for small entrepreneurs.

For example, the government’s annual procurement spend is in the region of over R500bn. Imagine the economic impact if the bulk of this budget was to be directed to small businesses.

Mr President, many small businesses are burdened by red tape. We must ease regulatory and compliance burdens on the shoulders of small businesses.

Cracking the whip within government

We accept that compliance with policies, laws and regulations are necessary in any democracy. However, the reality is that some of the policies and compliance processes may have the unintended consequences of being a heavy burden that constrain the growth and development of businesses.

Mr President, many small businesses collapse because they are either not paid on time or not paid at all.

I am sure you understand their frustrations. I therefore urge you to start cracking the whip against culprits within government who abuse small businesses by not paying them on time. Small businesses do business mainly with government departments, and if the invoices of small businesses are not paid within the 30 days, small businesses run the risk of collapsing due to financial distress and constrained cash-flows.

As you are aware, Mr President, the SMME sector holds the key to our job creation and economic growth prospects. You must be heartened to note that the contribution of SMMEs to the economy continued to increase despite the increasingly difficult economic conditions. You must stay on course and strengthen the small business sector to enable it to occupy its rightful place in the mainstream economy.

I am the first to concede that the task of promoting and nurturing small businesses is not only limited to government but is a joint compact between government, civil society and the private sector.

The key responsibility of government is to create an enabling environment for small business to grow and thrive.

Mr President, the youth unemployment is a ticking time-bomb. Young people must be empowered to occupy the front trenches in the reconstruction and development of our country, rather than being mere spectators.

Given the current state of youth unemployment in our country, the question is not whether we should encourage our young people to look in the direction of entrepreneurship, but rather, can we afford not to? Your government cannot afford to turn a blind eye or postpone its intervention.

Let us mobilise the whole of government to empower businesses of our people. Creating opportunities for meaningful youth participation in the economy is a fundamental prerequisite for a prosperous society. Young people must be job creators, and not job-seekers!

Comradely yours

Pule Mabe

ANC national spokesperson (Twitter: @pulemabe)

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