Empowering youth entrepreneurship
DURBAN - The KwaZulu-Natal Youth Business Development Fund initiative has inspired the other provincial government to launch similar mechanisms to empower youth entrepreneurship.
KwaZulu-Natal Premier Sihle Zikalala said the Eastern Cape and Northern Cape Provincial Governments have also launched similar programmes that sought to address youth marginalisation. “The total number of applications that were received and processed was 2 246. Of these, 448 were shortlisted for due diligence, and 55 were ultimately awarded grants totalling R71 401 486.14. This means that we have exceeded our limit by nearly one and a half million rands,” said Zikalala.
The premier said that none of this amount would be deposited to the entrepreneurs accounts but would instead be directed to equipment and instruments that would enable them to run their enterprises better and productively. He encouraged all unsuccessful applicants not to give up as the most defining characteristic of all successful entrepreneurs was never giving up coupled with their consistent ability to learn from failure. Zikalala said some the unsuccessful youth businesses that showed potential would be placed in a business development programme where the gaps and shortcomings identified would be addressed preparing them to benefit in the future.
Zikalala said their funding was limited to R70 million and the need, as expected, proved to be overwhelming.
The KZN Growth Fund Trust was chosen as the fund manager to administer the fund.
ABSA partnered with the provincial government to make the programme a success, sustainable, and impactful.
In his State of the Province Address(SOPA), Zikalala said that through government’s engagement with the private sector, ABSA pledged to allocate a R70 million loan dedicated to further support youth-owned enterprises that may required more funds than what government had allocated from the seed funding.
Premier Zikalala urged more partners in industry to work with the provincial government and all deserving youth owned businesses to ensure that these enterprises succeeded, become profitable and sustainable. He said that established businesses could apart from contributing to the fund, contract these SMMEs, procure goods and services from them and share skills with them through business incubation.
Small business development seen as the cornerstone of sustainable development, inclusive prosperity, and social cohesion. It was also seen as the answer to the country’s high unemployment and underemployment rates.
The 2019 SME and Entrepreneurship Outlook report on OECD countries revealed that SMEs accounted for about 60% of employment and between 50% and 60% of value added and are the main drivers of productivity in many regions and cities.
Zikalala said there were promising news about entrepreneurial activity in South Africa, which for a very long time has received unfavourable outcomes from international reports. The 2017/18 Global Enterprise Monitor (GEM) report indicated that South Africa’s entrepreneurial activity was at its highest since 2013 and also revealed that the total early-stage entrepreneurial activity (TEA) was at 11% in 2017 which was 4.1% higher compared to 2016.
The provincial government said that in the first phase, the fund would support a variety of economic sectors in all of KZN’s district municipalities.
The sectors included agriculture, manufacturing, mining, construction, transport and logistics, catering, tourism, hospitality, recycling, the creative arts, communications, and entertainment.
“We are however concerned that there has been no applications focusing on ocean economy, and very few on technological development. We call on the youth to explore and be innovative so that their economic participation will diversify to all sectors. We wish to see many more proposals that will take advantage of our unique location as a coastal province. From them, we wish to also get more young people in the oceans economy including arenas like boat or ship building and aquaculture,” said Zikalala.