Brics con­fer­ence will help drive SMME growth

The Star Early Edition - - OPINION & ANALYSIS - Sello Rasethaba

HUN­DREDS of small busi­ness and com­mu­nity en­ter­prise own­ers from across the Brics coun­tries will con­verge in Tian­jin, China, to­day to meet po­ten­tial fun­ders and mar­ket prin­ci­pals. The “2017 Brics Hi-tech SMME (small, medium and mi­cro-en­ter­prises) Cross-bor­der In­vest­ment and Trade Co-op­er­a­tion Con­fer­ence” will bring to­gether re­gional and global lead­ers to deepen un­der­stand­ing of trade and strengthen fi­nan­cial co-op­er­a­tion op­por­tu­ni­ties among Brics busi­nesses so that they grow.

This land­mark gath­er­ing is or­gan­ised by The Bank of China, to­gether with the Fi­nan­cial Ser­vices Work­ing Group of the Brics Busi­ness Coun­cil (China). It will start to­day and con­tinue to­mor­row.

More than 1 000 del­e­gates rep­re­sent­ing small busi­ness en­ter­prises from Brics coun­tries will con­verge at the con­fer­ence for high level net­work­ing, match making en­coun­ters, ad­vance in­no­va­tive so­lu­tions to ma­jor chal­lenges fac­ing small busi­nesses and com­mu­nity en­ter­prises and ex­plore new op­por­tu­ni­ties. Oth­ers will par­tic­i­pate via live feeds from the con­fer­ence.

The Brics Busi­ness Coun­cil was es­tab­lished dur­ing the 5th Brics Sum­mit held in Dur­ban in March 2013.

Among the ma­jor ob­jec­tives of the “Cross-bor­der Match­mak­ing” is to lever­age the role of fi­nan­cial in­sti­tu­tions as ve­hi­cles for small busi­ness de­vel­op­ment. All this, while pro­vid­ing cut­ting-edge fi­nan­cial ser­vices, prod­ucts and sup­port for Brics small and medium size busi­nesses and com­mu­nity en­ter­prises.

For South Africa, the con­fer­ence could not have come at a bet­ter time than when gov­ern­ment has re­newed its com­mit­ment to­wards driv­ing SMME growth as a pow­er­ful lever for rad­i­cal eco­nomic trans­for­ma­tion and in­clu­sive de­vel­op­ment.

When de­liv­er­ing the De­part­ment’s 20-17/18 fi­nan­cial year bud­get vote de­bate re­cently, Min­is­ter of Small Busi­ness De­vel­op­ment, Lindiwe Zulu, said they were mov­ing with re­newed vigour to en­sure an en­abling en­vi­ron­ment for new and es­tab­lished SMMEs and co-op­er­a­tives, whilst un­lock­ing their full po­ten­tial as en­vis­aged by the Na­tional De­vel­op­ment Plan.

She out­lined poli­cies, leg­is­la­tion and reg­u­la­tions that cre­ate such an en­vi­ron­ment for small busi­nesses to grow and thrive in the econ­omy.

Zulu also stated that in­for­mal busi­nesses, start-ups, ex­ist­ing SMMEs and co-op­er­a­tives have, in dif­fer­ent fora, raised the is­sue of lack of ac­cess to fi­nance as a big chal­lenge. She in­di­cated that her de­part­ment had a wide range of in­stru­ments, grants and loans avail­able to mit­i­gate this chal­lenge.

She also out­lined non-fi­nan­cial sup­port like train­ing and up­scal­ing of in­fra­struc­ture through the Shared Eco­nomic In­fra­struc­ture Fa­cil­ity pro­gramme, as an­other pos­i­tive in­ter­ven­tion to strengthen SMME sup­port.

The min­is­ter stated that op­por­tu­ni­ties aris­ing out of the R600 bil­lion gov­ern­ment pro­cure­ment spend will assist SMMEs and co-op­er­a­tives with re­spect to ac­cess to mar­kets.

The min­is­ter also an­nounced that in Fe­bru­ary 2017, the de­part­ment launched Peek – South Africa’s first dig­i­tal por­tal and e-com­merce plat­form for small busi­nesses in the crafts sec­tor. Peek links crafters and de­sign­ers into the ever-ex­pand­ing na­tional and in­ter­na­tional net­works of mar­ket op­por­tu­ni­ties. It high­lights the very best of what South Africa of­fers in the crafts sec­tor.

The de­part­ment has es­tab­lished an in­ter­na­tional re­la­tions func­tion aimed at tak­ing ad­van­tage of op­por­tu­ni­ties of­fered by South Africa’s re­la­tion­ship with coun­tries like Den­mark and or­gan­i­sa­tions such as the Global En­trepreneur­ship Congress.

Cou­pled with these in­ter­ven­tions is South Africa’s par­tic­i­pa­tion in the “B20 Cross-the­matic group on Small and Medium En­ter­prises” and “Brics’s FSWG SMME” pro­grammes.

Worth not­ing is that the G20 and the B20 SME cross-the­matic group has de­vel­oped three highly rel­e­vant rec­om­men­da­tions to the G20:

Fa­cil­i­tat­ing SMME par­tic­i­pa­tion in cross-bor­der trade – G20 mem­bers should fa­cil­i­tate SMME ac­cess to cross-bor­der trade and global value chains by sys­tem­at­i­cally in­clud­ing their voice and needs in trade agree­ments, by ca­pac­ity build­ing, and by eas­ing busi­ness travel.

Build­ing dig­i­tal ca­pac­i­ties and ca­pa­bil­i­ties – G20 mem­bers should fa­cil­i­tate SMME ac­cess to the dig­i­tal econ­omy by strength­en­ing dig­i­tal in­fra­struc­ture out­side in­dus­trial cen­tres.

Fi­nan­cial in­clu­sion

Ad­vanc­ing Fi­nan­cial In­clu­sion – G20 mem­bers should en­sure the im­ple­men­ta­tion of the G20/OECD High Level Prin­ci­ples on SME Fi­nanc­ing, the G20 Ac­tion Plan on SMME fi­nanc­ing and the G20 high level prin­ci­ples on dig­i­tal fi­nan­cial in­clu­sion, in par­tic­u­lar by strength­en­ing fi­nan­cial mar­ket in­fra­struc­ture, en­hanc­ing ac­cess to di­ver­si­fied fi­nan­cial in­stru­ments, and ad­vanc­ing dig­i­tal fi­nan­cial tech­nolo­gies.

It is clear to see that the “2017 Brics High­tech SME Cross-bor­der In­vest­ment and Trade Co-op­er­a­tion Con­fer­ence in Tian­jin, China” and re­lated busi­ness-to-busi­ness ses­sions mark an im­por­tant step for “build­ing up” SMME fi­nan­cial ser­vice plat­forms among Brics coun­tries.

An­other im­por­tant element of the con­fer­ence is to pro­mote trade co-op­er­a­tion be­tween do­mes­tic and for­eign cus­tomers by seiz­ing the op­por­tu­ni­ties brought by the Beijing-Tian­jin-He­bei in­te­gra­tion ini­tia­tive, the “Belt and Road” ini­tia­tive, the China (Tian­jin) Pi­lot Free Trade Zone and na­tional innovation demon­stra­tion zones.

It also brings into the spotlight as­sis­tance to SMMEs of the Brics coun­tries to ex­pand in­ter­na­tional mar­ket pres­ence, in­tro­duce ad­vanced ex­pe­ri­ences and tech­nolo­gies, pro­mote the trans­for­ma­tion and up­grad­ing of in­dus­tries, and im­prove in­ter­na­tional com­pet­i­tive­ness.

This is based on the com­mit­ment to­wards build­ing the “China-Europe Ad­vanced Man­u­fac­tur­ing In­dus­trial Park” and other high-end ad­vanced man­u­fac­tur­ing bases.

Meet­ing needs

The con­fer­ence will also ad­vance ef­forts of meet­ing the eq­uity and bond fi­nanc­ing needs of SMMEs and shar­ing the pol­icy ad­van­tages of Tian­jin’s “In­vest­ment-Loan Link­age” pol­icy.

The gath­er­ing will also fo­cus on such hi-tech in­dus­tries as new en­ergy, new ma­te­ri­als, high-end equip­ment man­u­fac­tur­ing, bio­phar­ma­ceu­ti­cals, elec­tronic in­for­ma­tion tech­nol­ogy and petro­chem­i­cals as well as tra­di­tional in­dus­tries such as fish­ery, agri­cul­ture and light tex­tiles.

Over­seas en­ter­prises in the Brics coun­tries, “Belt and Road” coun­tries as well as Europe, Asia-Pa­cific and Amer­i­cas are all in­vited to at­tend the con­fer­ence.

Mean­while, it is cru­cial for Zulu’s De­part­ment to take ad­van­tage of the op­por­tu­ni­ties aris­ing out of the Pres­i­den­tial Chief Ex­ec­u­tive Ini­tia­tive com­pris­ing about 100 chief ex­ec­u­tives and busi­ness lead­ers work­ing with trade unions and na­tional trea­sury.

The Chief Ex­ec­u­tive Ini­tia­tive has em­barked on a num­ber of projects that in­clude finding in­vest­ment op­por­tu­ni­ties in eight high-po­ten­tial sec­tors, in­clud­ing agri­cul­ture, tourism and small- and medium en­ter­prises. The Ini­tia­tive has also set up the South African SMME fund to stim­u­late en­trepreneur­ship and drive eco­nomic growth in the coun­try, in or­der to cre­ate jobs.

Con­versely, SMMEs in South Africa must there­fore take ad­van­tage of these ini­tia­tives in­clud­ing the Brics FSWG cross-bor­der in­vest­ment co­op­er­a­tion among SMMEs in China, In­dia, Rus­sia, Brazil and South Africa to find global op­por­tu­ni­ties and realise com­pet­i­tive ad­van­tage.

The FSWG is also es­tab­lish­ing work­ing mech­a­nisms and en­ter­prise in­for­ma­tion data­base with Brics gov­ern­ments, in­dus­try as­so­ci­a­tions, banks, and in­ter­me­di­aries.

It is im­por­tant to note that the “2017 Tian­jin China and Brics High-tech SME Cross-bor­der In­vest­ment and Trade Co-op­er­a­tion Con­fer­ence” is or­gan­ised by the Brics FAWG with the sup­port of the Chi­nese Min­istry of For­eign Af­fairs, Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy of the China, China Coun­cil for the Pro­mo­tion of In­ter­na­tional Trade and other min­istries and in­sti­tu­tions and sup­port from busi­ness or­gan­i­sa­tions of Brics coun­tries and the African Union, Association of South­east Asian Na­tions and other in­ter­na­tional or­gan­i­sa­tions. Rasethaba is chair­per­son of the Black Busi­ness Coun­cil and chair­per­son of the Fi­nan­cial Ser­vices Work­ing Group of the Brics Busi­ness Coun­cil (South Africa).

Zulu in­di­cated that her de­part­ment had a wide range of in­stru­ments, grants and loans avail­able to mit­i­gate the lack of ac­cess to fi­nance for SMMEs.

PHOTO: DUMISANI DUBE

Min­is­ter of Small Busi­ness De­vel­op­ment Lindiwe Zulu is aware lack of ac­cess to fi­nance is a big chal­lenge to SMMEs.

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