Current economic climate led to demise of some SMMEs

PRETORIA - SA's sluggish economic performance has been harsh to the small business sector, given their strong reliance on disposable cash for their survival, said Minister for the Department of Small Business Development, Lindiwe Zulu in a media briefing held in Pretoria on Tuesday.

Zulu said 2017 was a year in which her department collectively registered a significant progress and it was also a year they have confronted some major challenges, considering the daunting country's economy.

The department notes the steady decline of the country's GDP from 2.2% in (2014:Q3) to 1.6% (2014:Q4); further to 1.3% (2015:Q4); 0.2% (2016:Q3) and the recent growth of 2.0% (2017:Q3).

ALSO READ: SA, China host small business enterprises fair

Such macro-economic conditions need to be put into context when assessing the performance of the department and the small business portfolio.

The minister further said that the SMMEs sector is currently contributing an estimated 42-47% into the country's GDP and is targeting between 60-80% by 2030.

"People shouldn't be alarmed by the current sector's GDP contribution, yes it is low, but on the same level with those of the peer countries," she added.

ALSO READ: SA tells Iran to cut down the red tape on VISAS

"This year, we saw our National Gazelles programme making a visible impact in the lives and businesses of the first cohort of 40 Gazelles," Zulu expalined.

The National Gazelles Programme is one of the department's programmes implemented by the Small Enterprise Development Agency (Seda). It is a 10-year programme aimed at accelerating growth for 40 potential small businesses each year.

"It is also humbling to note that the Small Enterprise Finance Agency (Sefa) has supported almost 37 000 SMMEs and co-operatives for the period under review, resulting in over 42 000 jobs facilitated and sustained," Zulu said.

According to minister, Sefa has already funded 96% of the targeted SMMEs and achieved 72% of the expected job facilitation and strengthening.

The director-general in the department, Edith Vries has encouraged South Africans to take the corridor towards local goods spending.

Vries believes that buying from local entrepreneurs could lead to the sustainability of the SMMEs.