Business Unity South Africa (Busa) president Sipho Pityana announced last month that the organisation would convene a small-business working group to solicit the views of small and medium-sized enterprises (SMEs) on the challenges facing the SME sector and to seek solutions to those challenges.

In this regard, Busa would work with entities such as the Small Business Institute (SBI) and the South African Chamber of Commerce and Industry.

intends to engage with the research work done by the SBI, including its forthcoming ‘Baseline Study of Small Businesses in South Africa’.

During his keynote address at the SBI’s SME Indaba, in Bryanston, Pityana acknowledged that the SME sector had an important role to play in growing South Africa’s economy.

He highlighted that the SBI study was a “long overdue contribution to the literature and a necessary precondition to addressing the legislative, regulatory and policy changes needed to grow the sector”.

The SME sector, he added, was a “critical component of an inclusive economy”.

The SME sector employs 47% of South Africa’s workforce and contributes more than 20% to the country’s gross domestic product and pays about 6% of corporate taxes.

Despite this, Pityana lamented, the South African economy did not favour SMEs, which were often burdened with structural hurdles including access to funding, lack of access to markets, inadequate skills, uncompetitive regulatory frameworks and technological disruptions.

According to a survey conducted by the World Bank on the ease of starting a business, it takes 45 days for a local entrepreneur to meet the regulatory requirements to get a business up and running. In contrast, it takes fewer than 20 days in 130 other countries.

Since 2015, South Africa’s position in the World Bank Index on the ease of doing business has plummeted to 136 out of 190.

This illustrated the need for a concerted effort from government and other social partners to make it easier for SMEs to operate and thrive, especially if one wished to address the issue of job creation, Pityana told delegates.

In achieving this, immense growth and employment opportunities could be created in South Africa, which would fall in line with the National Development Plan, which envisages an SME sector that should create about 90% of new jobs by 2030.

Compounding the problem is South Africa’s low economic growth rate.

Owing to this, Pityana averred, the prospects of achieving inclusive growth were greater in sectors in which the poor worked and in areas where they lived, as well as where the factors of production that the poor possessed were used, while reducing the prices of items that the poor consumed would also help.

However, he warned that this would involve structural economic changes away from an economy that was dominated by extractive industries and monopolies towards one that supported labour-intensive growth geared to meeting the needs of the local and global markets.

“It also means ensuring that incomes, assets and education are improved for all South Africans and that the gap between the rich and the poor narrows.”

To achieve this, Pityana stated, government would need to make it easier for small businesses to operate

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