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Zuma: Business in townships needed

May 15 2012 12:58 Sapa

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Johannesburg - Meaningful economic activity in townships and rural villages and towns is needed to fight poverty, unemployment and inequality, President Jacob Zuma said on Tuesday.

"Boosting small business in these areas is a most logical way of achieving this goal," said Zuma.

"All successful economies have, as amongst the ingredients of success, invested strongly in the development of small business as well as cooperatives."

Zuma was speaking at the Soweto International Conference on Entrepreneurship and Small Business Development, at the University of Johannesburg's Soweto Campus.

"We are of one mind in the belief that our townships should be thriving centres of economic activity and excellence, instead of the purposes for which they were established by colonial and apartheid regimes," he said.

Zuma said the government had decided to focus on growth-orientated enterprises as well as enterprises in priority sectors like tourism, construction, agriculture, cultural industries and information and communications technology.

"Our target is to support primarily the enterprises which are owned by black people, disabled persons, women as well as the youth," he said.

Zuma said all stakeholders had seen the importance of growing small business, which is the engine of growth and development.

The three key pillars of the small business strategy were financial and business development support services, procurement support and an improved regulatory environment, Zuma said.

The Small Development Enterprise Agency was set up by government in 2003 to promote a positive entrepreneurship culture and to boost small business.

"Currently we are... refining our policies to help small businesses, self-employment schemes and enterprises, and cooperatives," said Zuma.

"We know that the small business sector wants to be freed from the red tape and administrative burdens. They want government to pay suppliers on time, within the 30-day period.

"These are some of the critical interventions that we have been asked to prioritise."

Zuma said a key factor for small business is access to finance and government, under the leadership of the economic development department, has launched the new Small Enterprise Finance Agency (SEFA).

The new agency consolidates Khula Finance, the SA Microfinance Apex Fund, and the Industrial Development Corporation small business lending book.

"SEFA will offer loans initially up to R3m," said Zuma.

"By reducing the number of agencies, we estimate annual savings in excess of R20m, through cutting the duplication of costs and services. That money can be redirected to support more small businesses enterprises rather than the bureaucracy."

Zuma said SEFA would have R2bn available over the next three years for lending, and said the merger was not just motivated by cost-cutting.

"We wanted an improved service to small businesses, a one-stop shop for funding," he said.

The government would also use relationships with key partners in the world to take forward their support to small business to achieve economic growth.

"The availability and cost of funding to small businesses is vital but not sufficient. More needs to be done to strengthen technical skills and promote market access," he said.

Zuma invited small business to explore opportunities in the recently adopted infrastructure plans which would see opportunities arise from new dams, railway lines, roads, ports and smelters to be built, or ongoing infrastructur maintenance.

There are also opportunities for small businesses in the green economy, after government installed 250 000 solar geysers, with the target to install one million.

Zuma said the 11 000 graduates produced by the University of Johannesburg a year across a range of academic and vocational disciplines will represent a meaningful contribution to the skills base of our country.

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