/ 9 December 2016

​VTSDs: Small business is the way to big things

Small Business Development Minister Lindiwe Zulu made a compelling case for the role of small businesses in the the growth of the economy at the Bokone Bophiriwe VTSD Economic Lekgotla last week in Mafikeng
Small Business Development Minister Lindiwe Zulu made a compelling case for the role of small businesses in the the growth of the economy at the Bokone Bophiriwe VTSD Economic Lekgotla last week in Mafikeng

The beer you down this festive season may be made from maize produced by the hands of small businesswomen operating from villages, townships and small dorpies.

DSBD Minister Lindiwe Zulu has adopted the Women-in-Maize as one of her department’s flagship empowerment programmes.The women from 11 co-operatives are part of the Women-in-Maize project, an ambitious multi-million rand project run by the South African Breweries (SAB) in partnership with the department of small business development (DSBD) and the Agricultural Research Council (ARC).

Zulu told the Bokone Bophirima Villages, Townships and Small Dorpies (VTSD) Economic Lekgotla that the Women-in-Maize programme seeks to empower 5000 women’s maize farming co-operatives over the next five years.

She said this will increase the inclusion of co-operatives owned by black women in the SAB’s supply chain, develop the skills of female farmers, improve food security and stimulate local economies by increasing procurement from local suppliers.

“I urge entrepreneurs to find creative ways of seizing the opportunity presented by the private sector supplier development programme,” said Zulu.

Zulu said Women-in-Maize is expected to address challenges that often confront emerging smallholding farmers in rural and township communities. These include lack of access to markets, entry into big business supply chains, access to finance and participation in the formal economy.

The Women-in-Maize project is expected to produce an annual yield of 13 000 tons of maize. This amounts to approximately 9% of SAB’s total maize requirements.

“Small businesses are the heartbeat of our economy and engine for economic growth and job creation. If we want to turn around our economic fortunes, we need to redirect our collective energies towards building and growing a small business sector,” Zulu told the VTSD Lekgotla.

The DSBD’s mission is “to create a conducive environment for the development and growth of small businesses and co-operatives through the provision of enhanced financial and non-financial support services and leveraging on public and private partnerships.”

The DSBD’s role

Through the National Informal Business Upliftment Strategy (Nibus), the DSBD seeks to uplift informal businesses and render support to local chambers, business associations and Municipal Local Economic Development offices to deliver and facilitate access to upliftment programmes.

It focuses mainly on designated groups, which include women, youth and people with disabilities, in townships and rural areas across the country.

Nibus, which targets entrepreneurs in the informal economy, advances government’s priorities of speeding up growth and transforming the economy to create decent work and sustainable livelihoods through inclusive growth.

But the department faces great odds, especially with SMMEs identified as the main job creators in an economy faced with an unemployment rate of 26.6%, according to Statistics SA.

The high youth unemployment rate and lack of jobs in general is driving many into the entrepreneurial space, where there are even bigger challenges, especially so for township and rural small business.

According to the World Bank, “600-million jobs will be needed in the next 15 years to absorb the growing global workforce, mainly in Asia and Sub-Saharan Africa.”

Zulu told the Lekgotla that her department is determined to lead an integrated approach to the promotion and development of small businesses and co-operatives.

“Our vision is to see a radically transformed economy through effective development and increased participation of SMMEs and co-operatives in the mainstream economy,” she said.

According to the Banking Association of South Africa, “small and medium-sized enterprises make up 91% of formalised businesses, provide employment to about 60% of the labour force and total economic output accounts for roughly 34% of GDP.”

“Small businesses are the heartbeat of our economy and engine for economic growth and job creation,” Zulu told the Lekgotla.

“If we want to turn around our economic fortunes, we need to redirect our collective energies towards building and growing a small business sector. It is exciting and encouraging to see that there is a universal appreciation that at the heart of any economic plan must be recognition of the role of small businesses and co-operatives,” she said.

Zulu said there is acknowledgement across the globe that small business and entrepreneurship development is a vehicle for stimulating economic growth.

“We have examined countries that have excelled in propelling economic growth and concluded that these countries have achieved higher growth rates, created wealth and higher earnings per capita through a mind-set of lifting one another up,” she said.

In order to unlock the potential of SMMEs and co-operatives, Zulu said, the department is focusing on public sector procurement, building market access into private sector value chains, simplifying the policy and regulatory environment, access to finance, and support to township and rural economies. This, she said will drive the development and sustainability of the small business sector.

Zulu said as part of a concerted to ensure co-ordinated support to small businesses and co-operatives, the DSB is entering into transversal agreements with other government departments and government agencies across all spheres.

“The critical benefits of transversal agreements is that they will assist us to avoid duplication, utilise scarce resources optimally and give concrete expression to co-ordinated and integrated governance and service delivery,” she said.

“We remain convinced that if we are to sustain the growth and development of SMMEs and co-operatives, we need to ensure a co-ordinated and integrated approach across all spheres of government. For this reason, our department is focusing on strengthening its working relationships with provinces and municipalities.”

Opportunities

Zulu called on the provincial government to open opportunities for small businesses and co-operatives in the mineral mining, tourism and agricultural sectors.

Bokone Bophirima is home to the famous Sun City Resort, the Pilanesberg National Park and two Unesco World Heritage Sites, the Vredefort Dome and Taung Skull.

According to Stats SA the number of tourists visiting the country increased by 14% from 731 248 in August 2015 to 833 638 in August 2016.

In his state of the province address, Premier Supra Mahumapelo said the provincial government has initiated a process of researching the total tourism portfolio of the province, which should be completed within the 2016/17 financial year.

While the tourism sector remains a critical arm of the provincial economy, SMMEs still find it hard to survive in this sector dominated by big business.

“Government fully is aware that small businesses and co-operatives find it difficult to flourish in underdeveloped areas such as townships and rural communities due to lack of adequate investments in infrastructure and lack of appropriate policies to protect informal businesses,” said Zulu.

She said the DSB strategy of developing township and rural enterprises is aimed at intensifying government’s support to township and rural enterprises to ensure their sustainability and competitiveness.

“At the heart of our strategy of revitalising township economies is effective partnership between provincial and local governments. It is a matter of concern that our townships are a hive of economic activity, yet the bulk of people who buy in townships do not come from townships but are brought from elsewhere,” she said.