SA hobbles small business

Afrikaanse Handelsinstituut CEO Ernest Messina has bemoaned the fact that the government stifles rather than facilitates the growth of small and medium enterprises (SMEs). He says one of the greatest impediments to economic growth and job creation in SA is the failure of the government to take the small business sector seriously.

This view is supported by the World Bank, which has said that the proportion of new businesses in SA is “well below that of other emerging markets”. This is despite the Department of Small Business Development having been established some years ago to drive this sector.

Messina claims the department is all talk and no action, but is there any small business owner who doesn’t already know this?

As aggravating factors, he cites having to deal with dysfunctional municipalities that pay late and provide poor services; the withholding of R5bn in VAT refunds by the revenue service, which hurts SMEs financially; the government’s failure to reduce red tape and create an enabling environment; and the difficulty registering a new business — 10 days in Rwanda, three to four in Singapore and three-plus months in SA.

This tardy approach by the government is made more shameful by the fact that the relevant minister, Lindiwe Zulu, has failed dismally to deliver in this portfolio (although of course merit has nothing to do with an ANC MP’s job) and that two of the cornerstones of ANC government policy are economic growth and job creation, as we are reminded by the president whenever he has an audience.

An empty vessel making empty promises.