Minister Lindiwe Zulu
Photo by: Duane Daws
The Free Market Foundation (FMF) has called on government to give Small Business Development Minister Lindiwe Zulu more power to screen legislation that could possibly negatively impact small businesses in future, as well as intervene where other departments are failing to pay, or delaying payments to, small businesses for services rendered.
Speaking at the 2016 Stakeholder Consultation on the review of the National Small Business Act of 1996, FMF director Leon Louw said a review of the Act was “absolutely appropriate”.
The summit forms part of the overall consultations with small, medium-sized and microenterprises (SMMEs), cooperatives and private and public sector stakeholders, soliciting inputs that will inform the review of the Act.
Louw added that the Department of Small Business Development (DSBD) had to establish a unit that would sign off on all socioeconomic impact assessments to take proper account of the implications for small businesses.
He further stated that there was a growing need to “beef up” its culture of sensitivity towards small business.
Meanwhile, Louw said Zulu had the “most difficult portfolio in government”, as the DSBD “controlled nothing”, but had to persuade other government departments "to not harm small businesses".
Zulu, meanwhile, told stakeholders that the DSBD was working with other departments to ensure that small enterprises were taken into consideration in government projects.
However, she noted, the question remained if SMMEs were aware of what was available and how they could access opportunities. “It might be good for us as a department to communicate with SMMEs when another department needs their services.”
She added that there was also a need to have a conversation about the structure of the economy of South Africa and to establish if it was “conducive to really assisting SMMEs and empowering black people”.
Data suggests that there are about 2.18-million privately-owned businesses in South Africa, with 2.15-million being SMMEs.
Of these, 1.5-million are value added tax or corporate income tax registered and can, therefore, be classified as informal. Only 150 000 businesses are medium-sized enterprises, while 450 000 are small businesses and 1.3-million are microenterprises.
In total, these businesses employ 7.3-million people and generate about 42% of the country’s gross domestic product.
Meanwhile, Zulu pointed out that some 250 000 new businesses are registered every year.