Small business is key to inclusive growth

ESTABLISHED almost five years ago, the Department of Small Business Development has made tremendous strides in its efforts to place small businesses and co-operatives at the centre of the national economic agenda.

By creating an enabling environment for small businesses and co-operatives, we will be able to achieve inclusive economic growth and sustainable employment.

Under the stewardship of Lindiwe Zulu, the department’s programmes continue to prioritise economic inclusion, job creation and poverty eradication. This is critical because joblessness and poverty constitute some of the most obstinate remnants of the apartheid legacy we all seek to undo.

The department – together with its agencies, the Small Enterprise Development Agency and Small Business Finance Agency – has been at the forefront of creating a vibrant culture of entrepreneurship and enterprise growth.

Transforming the economy to benefit the majority is a social and economic imperative. The triple challenges of unemployment, poverty and inequality bear a disproportionately black and rural face.

While national unemployment is at 26.7%, a breakdown of the 2017 figures by US agency Quartz (2018) shows that for black South Africans it is at a staggering 31.4%.

Inequality is stark as, according to figures from Oxfam (2018), the top 10% in South Africa shares 50% of all income while the bottom 50% shares 12%. Blacks are predominantly in this bottom 50%.

In its short period of existence, the department has already demonstrated its commitment and vision to fulfilling the objectives of the National Development Plan.

Global Entrepreneurship Monitor 2017 research indicates that 25.9% of business owners exited because of a lack of access to finance. It is this disturbing picture that the ANC government seeks to change.

Since 2014, the department and its agencies have supported more than a million enterprises through various financial and non-financial incentives. This has saved thousands of small businesses from inevitable collapse and, in the process, saved thousands of jobs.

The number of small and very small enterprises has shown an upward trend from 2014 to 2016. According to the Companies and Intellectual Property Commission data, there has been a 58.4% increase in company registrations between 2014/2015 and 2016/2017.

These figures show that Zulu’s persistent call to build a nation of entrepreneurs rather than job-seekers is increasingly finding resonance.

The contribution of small businesses to total employment increased from 62.09% in 2014 to 63.98% in 2016.

As a result of our policies, the small business sector has proved relatively resilient despite the difficult economic conditions in which it has been operating.

If the government proceeds along the same trajectory, the National Development Plan target of 90% of the 11 million jobs coming from small businesses is a realistic and achievable goal.

Monama is national communications manager in the Department of Information and Publicity based at Luthuli House