MTBPS: Mini budget is unlikely to instil confidence among small business owners

Published Nov 2, 2023


Growing small and medium-sized enterprises (SMEs)and making it easier for them to trade was a simpler solution to economic growth and job creation than the strategies outlined by the government in the Medium-Term Budget Policy Framework (MTBPF), Garth Rossiter, the chief risk officer of SME bank and funding services provider Lula, said yesterday.

Rossiter said that to him, the MTBPF appeared to be “vague” plans that would attempt resolve the country’s immediate problems over the next three years such as the issues of electricity, loadshedding, and the ability to transport goods in the country.

These problems were also negatively impacting the ability of small businesses to trade, he said.

He said unlike previous Budgets, SME’s or companies were not mentioned once in the MTBPF, and while small businesses would prove resilient, Godongwana’s speech was unlikely to inspire confidence in the small business sector. SME’s were the “lifeblood of the economy” and a key driver of job creation, Rossiter said.

Small businesses were also dealing with a host of other challenges including high inflation, a weak rand, high fuel and food prices, high unemployment, the impacts of the national avian influenza outbreak and still unresolved impacts of the floods to housing in KwaZulu-Natal.

He said he had some sympathy for Godongwana, who had faced a tough job of juggling declining revenue and rising expenditure and trying to manage debt-to -GDP (gross domestic product) and “there is no denying it, we are in a worse position than we were six months ago” owing to stagnant economic growth, low revenue collections and rising government debt.

Rossiter said rising government debt would impact government’s service delivery and its ability to create an enabling environment for small business. Rising spending more on debt also meant less spending on services such as police, health and education, which would also be of concern to small businesses, he said.