Speech by the Minister of small Business Development, Ms Lindiwe Zulu on the occassion of the AHI Congress, Durban
Programme Director,
Premier of KZN, Mr Senzo Mchunu
Minister of Cooperative Governance and Traditional Affairs, Mr Pravin Gordhan
Executive Head of Barclays Africa Financial Services, Mr Willie Lategan, Distinguished guests,
Ladies and gentlemen
I am honoured and privileged to be addressing you this afternoon.
In 1994, when our nation stood on the threshold of a very promising era defined by a collective commitment to the reconstruction and development of South Africa, we made a sacred commitment never to abandon our sacred mission of delivering economic and social justice for all. This commitment was succinctly captured by the late President Nelson Mandela when he opened the first democratic Parliament of a liberated South Africa in 1994. Among other things, he had this to say:
“... And so we must, constrained by, and yet regardless of the accumulated effect of our historical burdens, seize the time to define for ourselves what we want to make of our shared destiny… the purpose that will drive this government shall be the expansion of the frontiers of human fulfilment, the continuous extension of the frontiers of freedom.”
These historic words are a vivid reminder of the solemn pledge we made during the liberation struggle that we would never consider our mission accomplished and freedom achieved until all our people – blacks, workers, women, children, youth and people with disabilities - have been extricated from the crippling jaws of economic exclusion and are empowered to taste the fruits of our liberation.
Almost twenty years later, the vexing question that we must pose to ourselves is: Can we boldly declare that as a nation we had indeed seized the historic moment presented by the 1994 breakthrough to build for ourselves the kind of society that is capable of making a clean break with our ugly past? Have we sufficiently expanded the frontiers of human fulfilment?
It must trouble our collective conscience as a nation that, twenty years since our freedom, the triple challenges of poverty, unemployment and inequality still bear a largely black, rural and woman face. It must worry all of us, including the private sector, and move us into a collective radical action to transform our economy so that it responds to the needs of the
masses of our people. Anything less is an invitation to political and social instability.
I am confident that working together, we will succeed. Indeed, one of the most striking things about South Africans that continues to confound critic and admirer alike, continues to be our incredible capacity to rise together to defeat despair and steadfastly refuse to be passive participants in the process of rebuilding our country. We have learnt during the first twenty years that rather than assuming a defeatist posture in the face of daunting challenges, we must proceed with relentless determination, for obstacles in the way of progress are never insurmountable if we are united.
The Second Phase of our Transition demands that we redouble our resolve to accelerate our onslaught against economic exclusion, landlessness, poverty and homelessness. The Department of Small Business Development carries part of the responsibility to correct this historical injustice. We are determined to confront this challenge with every ammunition and enthusiasm at our disposal. Our twenty years of experience has demonstrated that the empowerment of the historically excluded and the deracialisation of our economy cannot be left to market forces. We must actively work together to create the kind of society that our founding fathers had envisaged.
My department is committed to working in partnerships with AHI and other business formations in order the effectively tackle the economic challenges that face us and to set our country on the path towards economic prosperity. One key area where our partnership can find concrete
expression is on the revitalisation of former mining towns. I wish to applaud you for the work that you have started doing in this area with the Department of Co-operative Governance and Traditional Leadership. This is the spirit that continues to define us as South Africa – the ability to rise above our ideological and policy differences in order to build a winning nation. Indeed, we must continue to work together as we jointly seek to explore solutions to the harsh economic realities that confront these towns. I am confident that working together and bringing our collective wisdom to the table, we will be able to achieve the desired results.
I see AHI as meaningful partners in the implementation of the National Development Plan. To address the socio-economic challenges facing our nation requires a collective effort. The agenda of radical economic transformation is not a project of government alone. All of us have a shared interest in achieving economic inclusion and defeating poverty, unemployment and inequality. I can boldly assert that embracing the objectives our radical economic transformation is in the interest of business and the entire society. This Congress offers AHI a golden opportunity to define its role and place in the radical transformation of our economy.
The need to support SMMEs and co-operatives is a responsibility that must be carried out by government, private sector and civil society. I am confident that as an organised formation with vast experience in business, you will continue to be willing to impart your skills to emerging black businesses. Our training must focus more on empowering our people to occupy the front trenches in the economy of our country. All sectors of society carry the responsibility to stimulate and support the growth and
sustainability of the co-operative and small business sector. As a department, our critical task is to co-ordinate all efforts aimed at developing and supporting small businesses as roles overlap in various departments and across the private sector.
Fellow Compatriots and distinguished guests, the country’s high rate of unemployment and extreme inequality call for bold and far-sighted interventions. The National Development Plan is the vehicle which will address poverty, unemployment and inequality. It sets an ambitious aim to treble the size of the economy by 2030, a daunting challenge that will require our collective contribution. Meeting the NDP’s growth target of 5.4% for the next 16 years would not only guarantee South Africa’s material prosperity, but would be an elevating and inspiring narrative for the country – ‘an optimistic new story’, as the NDP phrases it.
As the NDP makes clear, getting South Africa onto a high-growth trajectory demands that we fundamentally change our game plan and place small businesses and co-operatives at the centre of our war against poverty, inequality and unemployment. Developing a strong and growing SME community is a cornerstone of the NDP’s vision. SMEs are expected to be central to South Africa’s job creation efforts, in line with international trends. According to the National Development Plan, about 90% of jobs will be created through small and expanding companies by 2030.
Small businesses have an exceedingly high failure rate. 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.
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. As a country, we have one of the lowest rates of entrepreneurship activity in the world. We are working with the Department of Basic Education to help institutionalize entrepreneurship education from primary school level.
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 are convinced 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. We see the SMME sector and co- operatives as an economic empowerment vehicle for historically disadvantaged people.
We must direct much of our energy towards effective support to small businesses and co-operatives. This will be done through, among other things, access to finance, business skill development, market access, competitiveness, easing the regulatory burden and advancing localisation, particularly leveraging on public procurement and ensuring that small businesses are paid on time. We will remove unnecessary constraints and red tape that hinder small business growth.
The main focus of our interventions will be on women, youth and people with disabilities. Our support will seek to address issues relating to competitiveness, training and development, access to finance, business skill development, commercialisation, market access, and advancing localisation.
The challenges that await us remain daunting, but certainly not insurmountable. Let us all remain focused on the task at hand and never abandon our vigilance. The road that lies ahead is going to be long and hard. To postpone this assignment is to abort the noble task of expanding the frontiers of human fulfilment and extending the frontiers of freedom that former President Mandela spoke about in 1994.
I thank you.
