JOHANNESBURG - The medium-term budget policy statement presented to parliament on Wednesday by finance minister Tito Mboweni largely overlooked the plight of small businesses, a company that funds the sector said.
Mboweni painted a rather bleak picture of the country's prospects, slashing the gross domestic product (GDP) growth forecast for 2019 to 0.5 percent from the 1.5 percent predicted in February, in a presentation made two days before Moody's will announce whether or not it will maintain South Africa's last investment-grade credit rating.
While some of the measures Mboweni announced to shore up the economy were welcome, "he seems to once again have ignored the productive part of the economy being the SME (small and medium enterprise) business owners who together account for over 50 percent of employment and over 50 percent of of GDP in South Africa," said Karl Westvig, CEO of Retail Capital which has provided over R3 billion to more than 15,000 SMEs.
Mboweni presented the medium term budget a day after Statistics South Africa said unemployment rose to 29.1 percent of the labour force in the third quarter of the year, the highest in more than 11 years.
"If job creation is a strategic imperative for South Africa and the SME sector is responsible for 60 percent of jobs, then surely we should be spending more to stimulate this part of the economy?" Westvig said.