Business Day

SA hobbles small business

- John Perry Hartbeespo­ort

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.

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