Small and medium-sized enterprise (SME) lobby organisation the Small Business Institute (SBI) has called on Finance Minister Tito Mboweni to speed up economic reforms, invest in infrastructure and not abruptly cut off support for SMEs.
“As the pandemic has yet to be overcome through a rigorous vaccine programme, we believe the support to households and companies should not be abruptly withdrawn; rather, we need a careful sequencing informed by measures to avert the real prospect of a third wave of infections. This plea is aimed at public and private sector role players,” SBI CEO John Dludlu said in a statement on February 23.
“We applaud the announcement by President [Cyril Ramaphosa] that support to households, via the special Covid-19 grant, will be continued for a few more months and that unemployment benefits to select firms affected by the virus will remain in place for a while. As the country continues the battle against coronavirus and to save livelihoods, this support to households and firms remains vital.”
Equally important is accelerating the implementation of long-overdue economic reforms to make the South African economy competitive, he added.
“Without a robust vaccination rollout plan, energy supply security, modernisation, investment in infrastructure and research and development, as well as speedy allocation of high-demand spectrum, any talk of economic recovery will not be credible,” warned Dludlu.
Further, he noted that, despite the constrained fiscus, it would be counterproductive to raise taxes, as this would contribute to limiting the spending power of people to buy from SMEs.
Meanwhile, the SBI also called on all social partners and the broader civil society to maintain the spirit of solidarity that was evident during the first wave of the pandemic.
“Initiatives such as #paysmesin30days should be continued and, where possible, 50% upfront payment of invoices should be considered, especially where there is a long-standing relationship between a major corporate and an SME. Our priority at this stage must be to save existing businesses,” Dludlu said.
The SBI cautioned against diverting funding towards costly new initiatives or a new set of institutions. Rather, it called on government to bolster efforts to strengthen the State’s capacity to deliver public services and fight corruption, which steals from the poor.