How Stella plans to help economy get groove back
Cutting red tape first step in plan
The minister of small business development is adamant small enterprises can contribute 1.5% to the national economy by putting the right small enterprise development ecosystem in place.
Stella Ndabeni-abrahams said if the country puts the right frameworks and partnerships in place for SMME growth, the economy can tackle several burning issues at the same time.
“First, we must cut red tape. Red tape reduction and regulatory amendments generally cost nothing or very little and have significant impact. We need to look at licensing costs and the ease of small business registration and reporting requirements.
“We need to make the skills development system work for SMMES. Currently, only 37% of skills levy-paying small enterprises take up Seta [Sector Education and Training Authority] offerings.
“We need to reform the Compensation Fund and simplify the tax regime, which is hugely costly for small firms,” she said.
President Cyril Ramaphosa took many by surprise in February when he announced the appointment of business veteran Sipho Nkosi to lead efforts to cut red tape to allow for a seamless way of doing business.
Nkosi is chairman of Sasol and the Small Business Institute.
Ndabeni-abrahams also said one of the priorities for her department is to address the SMME credit gap, estimated at between R350-billion and R500-billion.
She said the department was investigating ways to strengthen SMME bankability through recognising moveable collateral and through more innovative credit information systems, which should include tapping into local knowledge systems like stokvels.
• See pages 14&15