By Viresh Harduth, vice president: New Customer Acquisition (Start up and Small Business) at Sage Africa & Middle East
In his first mid-term budget policy statement as Finance Minister, Malusi Gigaba painted a worrying picture of the South African economy. In February, GDP growth projections for 2017 was put at 1.3% but Minister Gigaba today revised this down to 0.7%. The country battles a massive debt to GDP ratio and a record high unemployment rate, at 27.7%.
In light of this, it’s worth reflecting on the role that business builders and small business owners play in job creation and economic development. As the biggest provider of jobs in South Africa, small businesses are well-positioned to equip more youth with the skills, confidence and tools they need to start their own businesses. Coupled with the digital tools that are freely – or cost-effectively – available today, more people should be empowered to start their own businesses and help the government in its efforts to reduce unemployment and grow the economy.
While no tax relief was announced, it was encouraging to note the establishment of a R1.5 billion SME fund by Gigaba. The fund will focus specifically on start-ups, and while we don’t yet know what support it will provide to new businesses, we’re hopeful that it will make it easier to start and run a business through reduced red tape, a supportive business ecosystem, and including small business representatives in policy discussions.
Small businesses are already under pressure from higher energy prices, which have forced some companies out of business. If the sector is to survive and thrive in tight economic conditions, it’s crucial that the public sector considers the combined impact of higher taxes, higher energy and water tariffs, and spending on projects such as the nuclear build programme, comprehensive social security and the National Health Insurance (NHI) on the cost of doing business in the country.
In South Africa, skills are in short supply and high demand. As one of the biggest skills developers in the country, business builders should work closely with the government to address barriers to growth and discuss how they can become partners in empowering more people, alleviating poverty and boosting SA’s competitiveness. We believe that entrepreneurs hold the key to a more equal and prosperous South Africa, and we will continue to be the voice for entrepreneurs.