Small business, specifically the Enterprise Development Agency, was allocated R480-million by Finance Minister Tito Mboweni in his budget this week. The funds are intended to expand the small business incubation programme and to launch a small business innovation fund.
The fund will receive R3.2-billion over the next three years to finance small business intermediaries such as fund managers and incubators.
These intermediaries are intended to support start-up companies and small businesses by focusing on innovation. A treasury official told the Mail & Guardian the fund will be publicised once a framework has been put in place. He said money had been put aside because treasury understands that, “for the economy to kick off, small businesses need to be given money”.
The chief executive of Business Leadership SA, Bonang Mohale, said allocating funds towards supporting small businesses is a step towards building a sustainable economy.
“We are emboldened by … Mboweni’s attention to small and medium enterprises [SMEs] because this is where jobs are created. The almost R500-million allocated to stimulating SMEs is a good start but nowhere near where we ought to be,” he said.
With the latest unemployment rate, measured at 27.1% in the fourth quarter of 2018, “business wants to be part of building the country’s new dawn”, said Mohale.
SMEs should focus on “products and services that are export-orientated for which they can name their price.
“It [seems] SMEs will help us, even in service delivery, because these are people who are artisans and electricians [who can] help us in the current problems that are keeping us up at night,” he said.
“The sewage is pouring into the Vaal [River] and we are bringing soldiers to do [the work that] local municipalities should be doing in the first place.
“It recognises that only half of our municipalities have an engineer and the rest do not have an engineer, which talks to the dangerous and unsustainable project of cadre deployment,” Mohale added.
Mboweni said, in the next three-year period, R61.4-billion would be allocated to public employment programmes, estimated to have created more than four million jobs of varying duration over the past 10 years.
The aim is to create a further two million jobs by the end of 2020-2021.
The clothing and textile competitiveness programme is to receive R600-million from Mboweni’s budget.
It is expected the programme will support 35 500 existing jobs and create 25 000 new jobs over the next three years.
Tshegofatso Mathe is an Adamela Trust business journalist at the
Mail & Guardian