AfCFTA opens up scope for SA SMMEs and entrepreneurs - Ramaphosa
DURBAN - President Cyril Ramaphosa warned South African entrepreneurs to be the first to penetrate the local market or else they would risk losing to their counterparts from other markets through the implementation of the African Continental Free Trade Area (AfCFTA).
The president said that the AfCFTA opened up enormous scope for SMMEs and entrepreneurs.
“We should see South African businesses trading with countries like Egypt, Senegal, Ethiopia and Sudan. SMMEs should penetrate these markets. They also need to be the first to penetrate the South African market,” said Ramaphosa.
President Ramaphosa was addressing Small, Medium and Micro Enterprise (SMME) and Cooperatives supported by the Department of Small Business Development (DSBD) through a virtual seminar (webinar) under the theme “Open Engagement with a View to Rebuild an Even Stronger Economy”.
The seminar was hosted by the Department together with its agencies, Small Enterprise Development Agency (Seda) and Small Enterprise Finance Agency (Sefa) and served as an open and transparent platform to get feedback from beneficiaries on the effectiveness of programmes and also provided SMMEs and co-operatives with insight on proposed activities by government to stimulate economic growth and how these businesses could continue being part of the desired growth.
Ramaphosa said that following the announcement of a R500 million SMME debt relief scheme by the Department of Small Business Development (DSBD), funds were paid which resulted in the saving of over 23 000 jobs. He said that of the approved funding, 67 percent of the beneficiary SMMEs were black, 33 percent female and 21 percent young. The president said that it was, however, a concern to him that only 0,3 percent of the beneficiaries were people living with disabilities.
He said that Sefa has also extended the payment holidays by up to six months, with R 106 million in interest foregone and over 37 000 jobs saved.
Ramaphosa said that in other economies, SMMEs formed up to 90 percent of the formal businesses and contributed significantly to employment and the GDP. He said that, however, in South Africa, while 98 percent of SMMEs formed the formal business, they did not account for many jobs and a larger GDP.
The president said that SMMEs should play a leading role in the rebuilding of the South African economy post the pandemic as the country was moving from relief to recovery mode. “For us to be able to create at least 11 million jobs by 2030, we should focus our attention on developing SMMEs,” said Ramaphosa.
He also described the fact that SMMEs were receiving the support they needed during the difficult economic times was commendable. Ramaphosa said that the R200 billion facility was also made available to assist businesses including SMMEs develop new business processes, technology and get new equipment.
He said that the DSBD’s viability scheme was intended to drive economic recovery by also assisting township and rural businesses to be catapulted to the mainstream economy.
Ramaphosa added that there would be financial and business development assistance intended to drive entrepreneurship particularly youth entrepreneurship.
“During the pandemic, there was a drive to assist 1 000 businesses in just 100 days. That was achieved in 130 days. We now have a bigger target set for 2024, which is to support 15 000 start-ups, most of whom would be run by young people. This will be done with the support of corporates, academia and the society at large.”
The president said that a key element to the economic reconstruction and recovery plan he announced in October last year was localisation. “SMMEs and cooperatives are well placed here because they are small, fast, nimble and have great insights. Corporates need to come on-board here by buying local. We are not saying that they should just buy local but they should buy local competitive quality goods that compete with those that they import,” said Ramaphosa.
Ramaphosa said that SMMEs would be capacitated to supply these corporates since the best way to build the economy was by empowering those who were deliberately locked out. He said that 40 percent of these should be women, 30 percent youth and 7 percent people living with disabilities.
The Minister of Small Business Development Khumbudzo Ntshaveni said that as the country was rebuilding the economy post the deadly Covid-19 pandemic, they were committed to supporting SMMEs and co-operatives.
SBD Deputy Minister Rosemary Capa, Sefa chairperson Martin Mahosi and Seda chairperson Dr Joy Ndlovu also attended the seminar.
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