President Cyril Ramaphosa has emphasised the importance for government to create an enabling environment for businesses to thrive.
“As part of our effort to build a new economy out of this pandemic, we must create the conditions that will enable every individual to thrive in a society that supports, nurtures and helps them to succeed,” the President said on Monday.
In his newsletter to the nation, Ramaphosa said small businesses present the greatest growth opportunity for the economy and are a major source of job creation.
“In such challenging times, when many have lost their jobs and the unemployed have found it even harder to eke out an existence, we must act with renewed urgency to support these businesses,” the President said.
He said the concentration of markets and capital in large firms limits the potential of small businesses.
“Then there is spatial inequality, which concentrates poverty in particular parts of our cities, towns and villages. Entrepreneurs in these areas find it difficult to raise the funds to launch and grow businesses and are often far away from the markets where they can sell their products.
“It is not enough simply to urge individuals to take advantage of opportunities or to encourage an entrepreneurial spirit among our youth. We need instead to deliberately build township and rural economies,” Ramaphosa said.
He said to enable these businesses to thrive, South Africa must tackle the barriers to entrepreneurship.
“When it comes to the township and rural economy, this means providing access to finance for entrepreneurs and the self-employed,” he said.
Since the State of the Nation Address in February, government has made great progress in extending support to 1000 youth-owned businesses.
“We will reach this target by International Youth Day on 12 August, despite the delays caused by the lockdown. It also means expanding access to affordable and high-speed broadband internet, and supporting new technologies – including successful aggregation platforms like SweepSouth or Kandua – which link small businesses to demand.
“It means backing areas of opportunity such as in early childhood development, the food economy and the green economy,” the President said.
The many innovative businesses that have started during this pandemic have showcased the potential of South Africans, particularly the young people, the President said.
“It is our duty as government, business and society as a whole to lend our full support to them on their journey towards self-sufficiency and financial sustainability – both to protect the jobs we have and to replace those we have lost.
“At the same time, this is a rallying cry to other young people out there to take the great leap of faith into self-employment. The best businesses come from good ideas that respond to a community need.”
President Ramaphosa said he was pleased at the combination of foresight, creativity and business acumen displayed by a number of young South Africans, who are coming up with home-grown solutions to address the contemporary challenges faced by the country.
He said a number of young people have started small business ventures because of personal circumstances, such as losing their jobs, and others, who were previously unemployed, are now seizing the opportunity provided by the pandemic to create their own income.
He said South Africa’s economic recovery cannot wait until the Coronavirus pandemic is over. “Our economic recovery needs to start now.”
During the lockdown, government has extended support to Small, Medium and Micro Enterprises (SMMEs) in the form of loans, grants and debt restructuring.
The COVID-19 UIF Relief Scheme has now disbursed R26 billion to more than six million workers across all types of business.
“The R200 billion loan guarantee scheme is being adjusted to make it easier for applicants to receive funding quickly. Through the work of the Department of Small Business Development and its agencies, the Presidential Youth Employment Intervention and other initiatives, we are placing the township and rural economy at the centre of our reconstruction effort,” the President said.
Government aims to support township businesses with skills development and access to markets and infrastructure. This will be done through the Township Entrepreneurship Fund.
“Although its launch has been delayed by the lockdown, we will put it front and centre as we now begin the arduous task of rebuilding our economy,” the President said.