President Jacob Zuma says supporting one million SMEs could help South Africa to create over a million jobs and added that the government would later this year hold a rural and township economy summit to develop critical ways to grow “the indigenous entrepreneurs”.
Delivering the budget vote for The Presidency in Parliament today Zuma said supporting SMEs has been identified as an area with large potential for employment creation and economic growth.
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“If we have one million small businesses, and each employs one or two people, we would have created over one million jobs,” said Zuma. “This is how important investment into small business development is.”
He said a rural and township economy summit will be held later this year “to among other things come up with critical ways to grow the indigenous entrepreneurs and ensure economic vibrancy in these areas where the majority of our people live”.
The government, he said, is driving a programme to revitalise township and rural enterprises. “Our National Informal Business Upliftment Strategy is making headway as it provides support to deserving informal businesses so that they graduate into formal small businesses.”
‘If we have one million small businesses, and each employs one or two people, we would have created over a million jobs’
Added to this he said the National Gazelles programme, a pilot by the Department of Small Business Development, has proved the potential of small businesses. “Forty small businesses selected for specialised attention in 2015 survived a negative economy and even grew their turnovers,” he said.
He said new regulations gazetted by The National Treasury in January this year and which came into effect last month, would help steer 30% of public procurement to small businesses and cooperatives.
He added that key support to small businesses must also include ensuring that they are not “strangled” by government regulations or red tape.
“We also reiterate that government departments in all three spheres (local, provincial and national government) must also pay SMMEs on time, as directed when they submit legitimate invoices. These are some of the interventions that will make transformation a reality for our people,” he said.
Touching on the SA SME Fund, set up under the CEO Initiative last year, Zuma said the government is “pleased that the private sector supports our drive to boost SMMEs”.
He however did not mention the government’s decision last month to not honour Deputy President Cyril Ramaphosa’s initial pledge for the government to match the R1.5-billion that the private sector has pledged to the fund.
Read more: Government won’t match private sector in R1.5bn SME fund
“We also encourage the private sector, which has a larger procurement muscle, to also embrace broad-based black economic empowerment by actively buying from black owned companies and supporting SMMEs,” Zuma added.
Featured image: PresidencyZA via Flickr (CC 2.0, resize)
