Welcome to KwaZulu-Natal’s (KZN) version of Dragons’ Den!
In Japan venture capitalists in this reality television programme are not called “dragons” but “tigers;” “sharks” in the US version and “lions” in Finland and Romania. Since the US has already claimed the name “sharks” we have to find another name: perhaps we can go with “sardines?” named after KZN’s annual “sardine run?” But then the sardines have to eat the sharks!
Today there are no sharks at this Funding Fair: only people with bankable projects and entrepreneurs with deep pockets and we are swimming in the same school towards sustainable growth and development.
A warm welcome from Provincial Treasury to our partners from:
- DeLoitte - KZN,
- Rob Smorfitt from SME Finance
- the Department of Economic Development and Tourism,
- Trade and Investment KZN
- Our business angels and venture capitalists, debt funders, project promoters and entrepreneurs.
Aligned priorities
The KZN Funding Fair brings us another step closer to our vision encapsulated in the Provincial Growth and Development Plan, namely: “By 2030 KwaZulu-Natal will be a prosperous province with a healthy, secure and skilled population, acting as a gateway to Africa and the world.”
It is also in line with Provincial Treasury’s mission of empowering our people through an equitable distribution of financial resources and strategic leadership in areas of financial and fiscal management and corporate governance.
It is important that we all sing from the same sheet when talking about sustainable growth and development. Finding sustainable solutions for growth holds the potential to help reduce poverty, foster development and preserve the environment. However, sustainable development is not about the environment or the economy or society. It is about striking a lasting balance between all of these. These objectives are interdependent and thus equally important.
A dynamic sustainable growing economy creates jobs and higher incomes, benefitting both government (more financial resources to provide more and better services and improve the well-being of citizens) and individuals (building their own wealth).
This framework has been created in the National Development Plan and Provincial Growth and Development Plan, also aligned with the Millennium Development Goals.
Provincial Treasury’s budget also has to be a delicate act of balancing social responsibility and stimulating the economy to progressively realising our goals:
- Job Creation
- Human Resource Development
- Human and Community Development
- Environmental Sustainability
- Providing Strategic Infrastructure
- Good Governance and Policy
- Spatial Equity
Partnerships
These goals cannot be achieved by government alone. We need partners. Therefore today is about government and the private sector’s commitment towards sustainable economic development: it is about connecting people, markets and values. We have to build economic foundations, grow businesses and invest in people to take KwaZulu-Natal forward.
Achieving more for less
Sustainable economic growth and development is also about achieving more with less. In 2050 about 9 billion people will be living within the resource limits of our planet. We have to think at least 50 shades of green to reduce our ecological footprint.
Let us try to leap-frog the developed world’s wasteful technologies and achieve less resource-intensive growth.
Importance of growing Small, Medium and Micro Enterprise (SMMEs)
We have good reason to grow our SMMES, they:
- power most economies in the world
- are the biggest contributors to job creation
- are important innovators, continually bringing new products to the market.
They have to play a pivotal role in unleashing KwaZulu-Natal’s growth potential and job creation.
High failure rate
While SMMEs are certainly the backbone of many world economies, the failure rate in South Africa is high. A Finmark Trust study conducted in 2010 ascribed the high failure rate of SMMES to a lack of an enabling environment:
- Access to finance
- Business readiness
- Insufficient skills.
Financial education
One of Provincial Treasury’s initiatives is our partnership with the private sector through the KwaZulu-Natal Financial Literacy Association to bring financial education to our citizens, including entrepreneurs. Knowledge about drafting and pitching of business plans and keeping financial records is essential. So is information about start-up funding.
Access to finance
In the 2013 Outlook on Latin America’s the Organisation for Economic Development (OECD) states that financiers are traditionally reluctant to enter the high-risk arena of small businesses, particularly those in the concept or start-up phase, resulting in many innovative entrepreneurs with the potential to reach high growth, never getting off the ground.
This was also singled out as one of the big challenges that SMEs faced by the recent Business Partners Limited SME index report.
Bankability
Understandably lenders will not lend money or invest in projects if they are not considered bankable and offer them value for money. Similarly there are many funding agencies looking for bankable projects to invest in, while there is a huge demand for development funding from entrepreneurs.
However, in many instances the project initiators don’t have the skills and experience to develop and sell their projects. They sometimes don’t know how to identify and approach funding institutions. The latter on the other hand does not know our Province and its tremendous potential. We are very keen to play match maker today.
Happy partnerships
Opportunities are there – but sometimes you have to look deeper as Sun Tzu reminds us in the Art of War:
“There are not more than five musical notes, yet the combinations of these five give rise to more melodies than can ever be heard. There are not more than five primary colours, yet in combination they produce more hues than can ever been seen. There are not more than five cardinal tastes, yet combinations of them yield more flavours than can ever be tasted.”
We have brought our funders and entrepreneurs together in one room and may you find awesome combinations!
