WATCH: SMME's will receive a more enabling environment - Gigaba
Economy / 21 February 2018, 3:18pm / Staff Reporter
CAPE TOWN - Finance Minister Malusi Gigaba in his maiden Budget Speech today said that small and medium sized enterprises (SMME’s) will receive a more enabling environment and market access.
This echoes Gigaba’s sentiments in the Medium Term Budget Policy Statement last year where he said that SMME's face several constraints.
This also comes after government announced that a fund will be created to support SMMEs to stimulate innovation.
The fund, which will be allocated R1billion in 2019/20, will provide wholesale funding to private and public sector incubators.
It is believed that by creating an enabling environment for SME’s, it will go a long way in helping businesses grow and also contribute toward the overall success of the country.
In order for SME’s to thrive, the red tape has to be removed.
Speaking at the AHI SME Indaba in September last year where he discussed SME’s being the driving force of the South African economy, Dr Zweli Mkhize, ANC Treasurer General said that SME’s contribution to the South African GDP accounts between 52%.
However, Mkhize said that one of the biggest challenges that SMME’s face is the 30 day invoice. This is is when government pays creditors within 30 days of receipt of invoice.
Corporate communications manager at the Tourism Business Council of South Africa (TBCSA), Kagiso Mosue today told Business Report that SMME development was critical to advance the broader objective of transforming the tourism sector and advance the momentum through incentives, among other tools, to ensure that small and emerging tourism businesses had access to market and develop become tomorrow’s big businesses.
Gigaba was very clear on governments position on SMME's during his budget speech on Wednesday.
“SMMEs and black-owned companies find it very difficult to participate in procurement opportunities as a result," said Gigaba.
For that reason, Gigaba said that government is in the process of reviewing all of these with a view to ending them in the majority of cases.
He added that payment of suppliers on time is regulated by the PFMA and MFMA.
Gigaba added that next week, the Director-General of National Treasury will issue a directive to all government departments and public institutions, instructing them to pay suppliers on time, or be charged with financial misconduct.
This will then be monitored by accounting officers and National Treasury.
He also said that government is rolling out a strategic procurement framework.
This framework will provide a different approach of procurement, based on each commodity.