The ability of small and medium enterprises (SMEs) to achieve sustainable economic growth fundamentally relies on a transformative and inclusive framework with all role players.
This view is shared by the UN and, more recently, the World Economic Forum in Davos, which highlighted that entrepreneurship is the solution to job creation and sustainable economic growth in Africa.
With over two-thirds (13.4 million) of South Africa’s current employment created by SMEs, the sector’s contribution to the economy equates to over 60 percent. According to the Department of Trade and Industry (dti), an estimated 2.8 million SMEs contribute between 52 percent and 57 percent of gross domestic product (GDP) and provide employment for about 61 percent of the workforce.
The narrative from this picture points to much needed collaborative efforts with all stakeholders, including private sector and government, to create a socio-economic transformative framework that supports the recommendations made by the National Development Plan.
Certainly government efforts such as the signing of the Brics (Brazil, Russia, India, China, South Africa) treaty and the recently announced differentiated tax structures, the simplifying of existing infrastructures and improving of public governance and more importantly the elimination of bureaucracy, will go a long way in championing a culture that fosters an environment for businesses to thrive.
However, while the country is setting its hopes for job creation and economic growth, based on the latest findings of the 2014 Nedbank Small Business Index, most business owners are planning to keep their staff compliment constant over the next 12 months, as they continue to experience financial pressure. Among the top reasons cited for this was the lack of adequate work (29 percent) and affordability of salaries and wages (25 percent). The index aims to provide critical insights into the perceptions, behaviour and expectations of the small business sector.
So is enough being done to support this sector? Is the current partnership intent between the government and the private sector working? Can South Africa meet the challenge of building thriving SMEs to fuel economic growth and create jobs?
As a bank for the entrepreneur and a supporter of small business, Nedbank continually strives to make a difference in this sector, through funding and Banking and Beyond solutions that offer interventions and resources to businesses through the various growth stages.
To date, the bank has contributed over R20 million towards enterprise development initiatives, skills development and training of entrepreneurs. Training and development, particularly in rural communities, is vital not only to champion economic activity and social cohesion, but also to help alleviate the burden on urban communities such as Gauteng, Western Cape and KwaZulu-Natal.
Nedbank believes that transformation begins with the true empowerment of communities. The Imbizo programme, launched in 2005 in partnership with Nedbank, Old Mutual, Mutual & Federal and Wiphold – a black business partner – seeks to understand the needs of various rural communities, and explore new ways of doing business with these communities. This is envisaged to ignite economic activity in primarily rural markets, with emphasis on building sustainable communities through commercial and corporate social investment activity to improve livelihoods.
The programme is active in 18 sites across four provinces with a much greater reach planned over the next three years.
Nedbank continues to invest in various interventions such as the online networking and resource portal “SimplyBiz” and Small Business Friday™, in association with the National Small Business Chamber. In addition, Nedbank has launched a number of new products and services.
Additional business support is complemented by “Business Accelerator”, a Talk Radio 702 programme hosted by Pavlo Phitidis, a business development specialist who profiles and advises small business owners on how they can accelerate their businesses to the next level.
Nedbank hopes that in the long term, other key role players will adopt the same principle by doing their fair share to transforming our society and the economy.