Small business development
‘While structural reforms are necessary for us to revive economic growth, they are not enough on their own.” – President Cyril Ramaphosa, SoNA, 10 February 2022, Cape Town City Hall.
This year, government is undertaking far-reaching measures to unleash the potential of small businesses, micro businesses and informal businesses.
These are the businesses that create the most jobs and provide the most opportunities for poor people to earn a living. Government has started discussions with social partners as part of the social compact process to review labour market regulations for smaller businesses to enable them to hire more people while continuing to protect workers’ rights. A new, redesigned Loan Guarantee Scheme is being introduced to enable small businesses to bounce back from the pandemic and civic unrest.
This new bounce-back scheme incorporates the lessons from the previous Loan Guarantee Scheme. It will involve development finance institutions and non-bank small and medium-sized enterprises providers in offering finance, expand the types of financing available and adjust eligibility criteria to encourage greater uptake. National Treasury is working with industry stakeholders to finalise the scheme and will provide details soon.
Government is reviewing the Businesses Act, 1991 (Act 71 of 1991) – alongside a broader review of legislation that affects small, medium and micro enterprises (SMMEs) – to reduce the regulatory burden on informal businesses.
There are too many regulations in this country that are unduly complicated, costly and difficult to comply with. This prevents companies from growing and creating jobs. Government is, therefore, working to improve the business environment for companies of all sizes through a dedicated capacity in The Presidency to reduce red tape.
If government is to make progress in cutting unnecessary bureaucratic delays for businesses, it needs dedicated capacity with the means to make changes. President Ramaphosa has therefore appointed Mr Sipho Nkosi to head up a team in his office to cut red tape across government.
Mr Nkosi has extensive experience in business, including as the Chief Executive Officer of Exxaro Resources, and is currently the Chairperson of the Small Business Institute. The red tape team will identify priority reforms for the year ahead, including mechanisms to ensure government departments pay suppliers within the required 30 days.
The team will also work with other departments and agencies to unblock specific obstacles to investment and business growth. It will support current initiatives to simplify processes relating to property registration, cross-border trade and construction permits.
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Source: State of the Nation Address Highlights [PDF]
