The annual small-business summit held in November last year aimed to highlight the Department of Trade and Industry (DTI) Minister Mandisi Mpahlwa’s department strategy on the development and rapid growth of the small, medium-sized and micro enterprises (SMMEs) in South Africa.
The two-day summit outlined a ten-year review which highlighted that while there are many challenges facing the SMME sector, many efforts, including the roll-out of infrastructure for entrepreneurs, access to government services and improvement of the regulatory environment, will be made towards developing this sector.
DTI director general Tshediso Matona summarised the issues facing the SMME sectors as the lack of access to finance, markets and information, service delivery and efficiency, integration of services by all government stakeholders, and partnerships with the private sector.
The DTI, according to Matona, seeks to move forward in challenging the access to finance by using innovative approaches towards the private sector to finance small businesses. The DTI aims to enable direct access to finance intervention mechanisms and create partnerships with the Financial Services Charter Council to strengthen the private-sector monitoring efforts. Efforts to include the SMME sector in current government infrastructure development projects and procurement opportunities linked to the 2010 soccer World Cup are one of the ways to improve access to market opportuties. The Public Sector SMME Targeting Procurement Scheme is a joint initiative with the DTI and government, by which each government department must procure a miniumum of ten products from SMMES.
Other objectives highlighted at the event saw commitment from the DTI to facilitate the mobilisation of private-sector models for enterprise development support. Matona says that this will expand on current excellence models, like those of Sasol, Absa and Anglo American, because summit delegates proposed that these be extended to other parts of the country.
The business summit highlighted the establishment of the national small business advisory council (NSBAC), aimed at strengthening advocacy on small business issues, improving interaction with civil society and organising business gatherings for inputs to assess the impact of government initiatives.
The council was launched in November and an official media briefing was held at the DTI’s offices in Pretoria, in January, to outline the role of the committee in the SMME sector. The council comprises members from different disciplines to provide diversification of skills that can enable a holistic outlook on issues affecting small businesses.
Council convenor Thami Mazwai stressed the importance of the SMME sector in South Africa as a driving force behind the economy and said that the committee’s plans included the development of a finance plan, charter and business plan.
The NSBAC research subcommittee coordinator Dr Evelyn Rabaji said efforts into funding agencies for SMME development would be looked into and an impact assessment on the delivery of SMMEs will be researched. “It is important to inquire what the challenges facing SMMEs are and this is not a time-consuming process. The DTI has a fast-paced approach to the matter and is aware of the issues that need attention,” she said.
NSBAC Professor Gesler Nkondo stressed the importance of enter- prise training in South Africa and said that a growing economy required a balance in skills training.
The council is to deliver its first report in June this year, followed by an annual small-business summit in August. A research agenda will be developed and focus on issues affecting entrepreneurship and SMME development on a yearly basis. The council serves as an advisory board to the Minister on small business, promoting the interests of small business and fulfilling policy monitoring. This will be achieved by consulting all role-players, major institutions that can play a role in SMME development, and through focussed research driven by local institutions.
The achievements of the DTI to date include the small-business start-up fund under the banner of Khula, making a total disbursement of R329-million in the 2006 financial year, where 62% of businesses benefited in the retail and wholesale sectors, 34% accounted for businesses requiring loans of the less that R250 000, and 35% of the total disbursements benefited business located in the low-economic activity areas located outside Gauteng, KwaZulu-Natal and the Western Cape.
The Presidency, in consultation with the DTI and the National Treasury, investigated the impact of regulations and their administration on growth and employment creation. The results saw an agreement between Cabinet and the Minister of Finance that there would be a continued effort to drive reforms in the administration of taxation systems, a review will be led into labour regulations and administra- tion, the department of provincial and local government would pursue interventions to encourage local governments to support policies and practices more amenable to the development of SMMEs, and the selected sector departments would review their bodies of legislation from time to time.