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An area that could have received more attention in
Finance Minister Tito Mboweni's mini budget, delivered on Wednesday, is the
small business space.
This is the view of Karl Westvig, CEO of SME funder
"With a declining economy, in small and medium
enterprises (SMEs) need to work harder than ever before to ensure their
survival, especially with up to 80% of small businesses failing within their
first five years," said Westvig.
Westvig believes that given the size of SA's
economy, a R1.4bn investment from the CEO Initiative's SME fund is relatively
small and will have limited real impact.
It has been a trying year for small businesses
across the country.
According to Westvig, the mini budget is "largely
geared to government departments and allocation of spending, and has not
applied sufficient support to the SME sector, which is a large driver of
employment and GDP growth".
Westvig told Fin24 Treasury should be
"committing more capital to support the private sector business funders
who have access to these SMEs, and have the technology to deliver more
efficiently and effectively".
Westvig says many of the non-bank lenders have
innovative models to support them, but require larger balance sheets to have
more impact. In his view, government could fill the role as guarantor.
Jabu Mabuza, co-convenor of the CEO Initiative, says
over the past two years, government, labour and business have made progress on
various initiatives to support growth in the economy.
This includes the establishment of the R1.4bn SME
Fund to invest in the SME sector; a Youth Employment Service (YES) aimed at
providing employment opportunities to one million young people; and various
investment initiatives in sectors such as agriculture, tourism, manufacturing
and healthcare. “We agree with the minister that difficult choices are required in order for
our country to prosper in a sustainable way," says Mabuza.
"Business remains committed to continue
working with the government and labour to do what is necessary for us to create
an environment that is conducive to achieving inclusive economic growth that
benefits all South Africans."
Neil Robinson, CEO of social enterprise Relate
Trust, says the crux of the mini budget is executing the plans that have been
"The problem is that in the past there have
been good plans, such as the NDP – they’re there – but they haven’t been
utilised properly, and if that’s done with the full inclusion of the entire
populace and the economy, it can only but get the economy going in the right
direction," he says.
He added that in addition to the youth, the elderly
– who in his view remain a "massive part of the economy" – must be
given more chances, as well as ongoing opportunities to gain social cohesion
and develop the country's future youth.
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