Tomorrow we will deliver our first budget speech. We will use that occasion to give concrete meaning to our commitment to set the country on a course of radical economic transformation.
We have been encouraged by the outpouring of support and goodwill that we continue to receive from organisations, the general public and the business sector since the President announced our establishment. In particular, we wish to thank all organisations and individuals who have been calling for the establishment of the department.
We are aware that we carry the hopes and expectations of a nation on our shoulders. We are clear that our country expects us to make urgent and decisive interventions to grow the economy. We know that to launch an effective onslaught against the triple challenges of poverty, unemployment and inequality requires radical and bold steps.
As a newly proclaimed department, our core delivery units will be constituted by programmes that will be migrating from the Department of Trade and Industry and the Department of Economic Development. Our key mandate is to enhance support to small businesses, informal businesses and cooperatives, with emphasis on programmes that would advance entrepreneurship amongst women, people with disabilities and youth, to effectively contribute to job creation, economic growth and economic inclusion.
The second phase of our transition demands that we redouble our resolve to accelerate our onslaught on the triple challenges. It must trouble our collective conscience as a nation that, twenty years since our freedom, the participation of black people in the country’s economy leaves much to be desired. This is largely a result of constraints and obstacles placed in the way of black and women economic empowerment.
We carry a responsibility to correct this historical injustice. According to the National Development Plan, about 90% of jobs will be created through small and expanding companies by 2030. The sad reality is that South Africa has one of the lowest rates of entrepreneurship activity in the world. We have a collective responsibility to inculcate a culture of entrepreneurship in our country. We will lead a massive entrepreneurship drive in order to create a nation of entrepreneurs.
In the months that lie ahead, we will look carefully at legislation and policies that, in the view of the small business sector, are creating barriers in the development and growth of SMMEs. We will do this in consultation with all stakeholders. We will focus on creating an enabling environment for small businesses to grow and thrive.
We will work with all our partners to address, among other challenges, the lack of access to markets and procurement, lack of access to finance and credit, low skills levels, lack of access to information. We will also make it easier and faster to register businesses by ensuring that all services are provided under one room.
We have no doubt that economic growth and job creation will come from policies that allow small businesses and co-operatives to thrive and grow. SMMEs have the potential to be the main driver of economic growth, poverty reduction and job creation. I am informed that in South Africa, small businesses contribute to about 50% of all employment opportunities in South Africa and to about 45% of GDP.
Researchers tell us that the failure rate for new businesses is around 70% to 80% in the first year, and only about half of those who survive remain in business for the next five years. To reverse this trend requires decisive interventions from our department with support from stakeholders.
Our specific interventions with regard to cooperatives will seek to:
- Increase the supply of non-financial support services to cooperatives
- Create demand for cooperative enterprises products and services
- Improve the sustainability of cooperatives
- Increase the supply of financial support services to cooperatives.
Our small enterprise development strategy hinges on three key strategic pillars:
- Increasing supply for financial and non-financial support services
- Creating demand for small enterprise products and services
- Reducing regulatory constraints on small enterprises.
In the course of discharging our mandate, we will engage and consult with the labour movement, business sector, government across all spheres as well as state-owned enterprises.
All of us have a responsibility to ensure that all our people are empowered to taste the fruits of our freedom and democracy in their lifetime.
Enquiries:
Cornelius Monama
Cell: 082 578 4063
