Z Mkhize: Absa Small Business Centre launch

20 July 2007

eThekwini Municipality Deputy Mayor, Cllr Logie Naidoo
Chief Executive Officer (CEO) of SEDA Incubator, Mthunzi Nyandeni
Deputy President of the Durban Chamber of Commerce, Mr Clive Manci
Chairperson of Provincial Advisory Board Absa KZN, Mr Nhlanhla Gasa
Absa's Executive Management
Distinguished guests
Ladies and Gentlemen

It is a great honour to join you in celebrating the launch of this advisory
centre. In just few days ago, we celebrated the 89th birthday of former
president Nelson Mandela. What makes today and his birthday so special?

During the difficult times of apartheid, Nelson Mandela advocated
reconciliation through bonding together, peace - through co-operation - and
prosperity - through economic integration. He fought very hard against the
systematic strategy which was aimed at excluding the majority of our people
from playing a meaningful role in government.

Although we have achieved political liberation, with peace becoming an
immutable aspect of daily life, unemployment and poverty remains the biggest
challenges.

Unemployment is not a natural disaster like a hurricane or an earthquake,
something that happens to us out of the blue that society then deals with badly
or well, as the case may be. Rather, unemployment is a social phenomenon.

Millions of people out of work means, quite simply, that we have failed to
organise our society in such a way that full employment is secured. Because it
is a problem of our making, not a natural condition, there must be a solution,
if only society is willing to take the steps necessary to find and implement
it.

The solution is entrepreneurship. Before I speak further, let me ask: What
is entrepreneurship and who is an entrepreneur? Entrepreneurship is nothing but
the conversion of an idea into an opportunity. An entrepreneur is someone who
sees an opportunity, an unmet human need, and moves to create an enterprise
around that unmet human need, thus connecting human needs with human labour. It
should thus be clear that weak entrepreneurship can only lead to a build-up of
unmet human needs and high and rising unemployment. In time, a weak
entrepreneurial culture will mean a weak and stagnating, if not a declining,
economy.

We must therefore make our greatest developmental effort in the area of
entrepreneurship development. The provincial government is now keenly aware of
this. And, accordingly, we have implemented a number of policy measures, and
will expand a number of programs to promote and support entrepreneurship in
this province:

* We have embarked on a campaign to change the current mind-set of our young
people to one that would embrace entrepreneurship through district information
sessions.

* We are exploring the possibility of including entrepreneurship training in
our school curriculum.

* We are building into our new provincial Black Economic Empowerment (BEE)
strategy a robust skills development component, with the youth in mind as the
main beneficiaries.

* We are reviewing the provincial government's procurement policy, as part
of its BEE strategy, with a view to significantly increasing the levels of
government procurement from emerging black enterprises, including
co-operatives.

* We are considering creating a provincial empowerment fund to fast-track
broad-based BEE in the province.

All these and many other initiatives of government point to one thing: the
government is committed to the development of entrepreneurship and of a vibrant
small enterprise and co-operative sector, and will leave no stones unturned to
achieve it. Failure in this respect cannot be an option.

Partnerships

But government alone can only do so much. There is a big scope for the
private sector large firms. They have a big role to play in the areas of
training, mentoring, and fostering youth-owned small enterprises through
appropriate linkages and partnering. They can also procure preferentially from
youth-owned small enterprises.

The banking institutions must also come on board and extend financial
support to small, medium and micro enterprises (SMMEs). This sector is fast
becoming very competitive and generates returns for all stakeholders.

I have no doubt that this partnership with Absa Bank will permanently
heighten entrepreneurship activity. It is an opportunity that all communities
must seize with both hands. The majority of our people were born in an era when
the political and social environment stifled black people's entrepreneurship.
The sad result has been a stunted entrepreneurial development, with all the
obstacles such as lack of skills, lack of finance, and insufficient access to
markets.

This gathering is a testimony to the fact that we have begun to rise to the
occasion – together we are tackling head-on the challenges of entrepreneurship.
It is very important to realise that the times have changed and so has the role
of government. Government's new role, even while adopting our 'developmental
state' approach, is to promote, facilitate, and support entrepreneurship.

One Stop Shop – Integrated Business Support Centres

The valuable experience that we have gained over the past 13-years has made
all of us realise that government's target of halving unemployment by 2014; and
the province's ambitious aim of achieving an economic growth rate of 8% by 2010
is dependent on a partnership with the private sector.

This partnership is for the upliftment and development of the community. The
fifth South African Employment report released in April this year estimates
that there are only 600 000 formal businesses compared to the estimated 2,1
million self-employed people in the country. The report was based on Statistics
South Africa's figures. It further notes that there is an urgent need to assist
the self-employed to enter the formal economy. The lack of access to relevant
and understandable information and advice are some of the challenges which are
being faced by the small enterprises.

Other areas where challenges are being experienced include lack of training
in financial management, lack of access to markets, finance, physical
infrastructure, and appropriate technology.

Because we value the contribution of SMMEs, the Department of Economic
Development, Integrated Business Support Unit has already established four
Service Delivery Networks around the province in the form of One-Stop-Shops.
These centres will provide information and business support to emerging
entrepreneurs. This, among other things, includes information on how to start
new businesses, expand existing operations, accessing various financial schemes
and marketing opportunities locally and internationally. The launch of this
One-Stop-Shop today and forms part of government's efforts aimed at are
bringing services closer to the people.

The department will ensure that only highly skilled people are employed in
these centres. As the department we will continue to provide a wide range of
support services to emerging enterprise to ensure their competitiveness, growth
and contribution to the campaign to reduce the levels of unemployment and
poverty.

No in a distant future we will see this sector making a tremendous
contribution to the province's economy. Last year, the department in
collaboration with an Indian company, National Small Industry Corporation
Limited, conducted an SMME feasibility study. This study recommended the
establishment of the Technology Demonstration Cum Training Centres (TDTC). Nine
TDTCs and two Business Incubation Centres will be established to fast-track and
broaden skills base and economic participation in the province. This will also
include the training of more than 370 emerging entrepreneurs and assistance of
100 to access market – a move that is expected to generate 1250 job
opportunities.

2010 World Cup

With the 2010 Soccer World Cup event looming large on the horizon, there are
endless opportunities. It is a mark of entrepreneurship to see the business
opportunity that the 2010 event represents. As the excitement about the 2010
Soccer World Cup event reaches a feverish pitch, it is all too easy to forget
that it is only an event – one that will last only a month. The 2010 World Cup
event represents an enormous opportunity for all communities to ramp up their
entrepreneurial activity. However, without taking certain steps now to ready
our communities for 2010 and beyond, the chances are that the 2010 World Cup
event would be just – an event involving 22 soccer players on the filed plus a
referee and his two assistants.

Conclusion

This gathering serves as a reminder to all of us today that we must continue
to respond with greater commitment and urgency to the social and economic needs
of our communities.

Today we are responding to new situations and new challenges that are
emerging 13-years since we achieved democracy.

Today marks the start of a long journey towards the betterment of life for
all emerging entrepreneurs. I trust that the effect of this advisory centre
will be felt across eThekwini Municipality in the next few months.

I invite all entrepreneurs to utilise this service. The power to create and
re-create is in your hands. Together, we will succeed to free many of our
communities from the shackles in which they have been held for many years.

Thank you

Issued by: KwaZulu-Natal Provincial Government
20 July 2007