President Cyril Ramaphosa said the Coronavirus pandemic has helped government in the implementation of a programme aimed at bringing the informal economy into the mainstream.
Ramaphosa said this when he fielded oral questions from members of the National Assembly during a hybrid question and answer session.
He said just before the Coronavirus outbreak, Cabinet approved the Township and Rural Entrepreneurship Programme.
“This programme is aimed at putting township and rural enterprises at the centre of economic growth.
“According to research commissioned by the Department of Small Business Development, the informal sector has a central role in the South African economy, as it accounts for 18% of total employment and contributes towards the livelihoods of millions of people.
“The pandemic has assisted the implementation of this critical intervention, which seeks to bring marginalised people and areas into the mainstream economy,” he said.
Responding to questions, the President said as part of government’s package of responses to the pandemic, government has been providing financial and non-financial assistance to the informal sector to cushion workers from the economic effects of COVID-19.
Government has also taken measures to support households that rely on income from informal businesses by topping up social grants over a six month period and introducing a special COVID-19 grant of R350 a month over six months for unemployed people.
“Financial assistance to informal businesses has taken the form of grants, loans and credit facilities that informal businesses can access to sustain their livelihoods.
“The non-financial interventions include business development support services that help informal businesses to improve their business management capabilities.
“This will assist informal businesses, should they wish, to make the transition to micro, small and medium-sized businesses in the formal sector,” the President said.
The interventions would make it easier for informal businesses to benefit from government incentives, SMME programmes and procurement opportunities.
The President said the Department of Small Business Development has introduced programmes targeted at specific sub-sectors of the informal economy.
He said over the next three years, the programmes aim to support 100 000 spaza shops and general dealers, 50 000 artisanry businesses, 15 000 hairdressers, beauticians and other personal care businesses, 50 000 vegetable street vendors and butcheries, and 10 000 informal restaurants.
“Other programmes include the Small Scale Automotive Aftermarket Support Scheme to support 5 000 informal businesses over 12 months, and the Bakeries and Confectioneries Support Programme, targeting 3 500 businesses over 12 months.
“Some of these programmes have already been implemented and are gaining traction.
“Through these programmes, which prioritise black-owned, youth-owned and female-owned SMMEs, thousands of jobs have been saved and a significant number of SMMEs have been kept in business.”