Ben Bierman
Ben Bierman

OPINION: What #SONA2019 means for your business

By Ben Bierman Time of article published Jun 30, 2019

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JOHANNESBURG -  President Cyril Ramaphosa delivered a robust State of the Nation Address (Sona), despite the challenges involved with balancing the needs of different stakeholders, from unemployed youth, labour, ratings agencies, the private sector to business owners. 

What is evident is that South Africa’s challenges will not be resolved unless the country can successfully grow out of them and economic development is key to this growth. In order to unlock the country’s potential, it is absolutely imperative – especially for owner-managed businesses – that the course for economic growth set by President Ramaphosa is followed efficiently and without delay. 

As such, here are some key Sona highlights that will support business growth: 

Focus on reliable power supply  

The problems at Eskom are bigger, wider and deeper than what many of us previously thought. The fact that the President is prioritising it and trying to ensure sustainable and reliable electricity supply, will benefit small and medium businesses, as they do suffer disproportionately when it comes to load shedding and unreliable electricity supply. In order to be confident in their own growth plans, it is vital for business owners to have certainty that they can rely on a stable electricity supply. 

Youth unemployment and tourism 

Businesses that operate within the tourism sector often have low barriers to entry and significant job creation capabilities, which is why the industry offers vast opportunity for small and medium businesses. Increasing the number of foreign tourists visiting the country is, therefore, key to unlocking the possibility that the industry presents, especially when it comes to alleviating youth unemployment. Bearing this in mind, it is important to note that a big benefit of the tourism industry is that it impacts various other industries, both directly and indirectly, ranging from hospitality and cleaning services, to retail and repairs. 

Infrastructure spend

The planned infrastructure development projects will not only improve the country’s infrastructure, but also provide significant downstream opportunities for businesses across various sectors, improve general business confidence, and result in various positive spin-offs. All forms of infrastructure development offer significant opportunities for businesses, either in the form of sub-contracting agreements, or as active participants in public-private partnerships (PPP). Business owners need to be proactive in not only identifying, but also planning to take maximum advantage of these increased opportunities. 

Lowering the cost of data 

It is positive to note that the need to bring down data costs was a key point in the address, given that the cost of data in South Africa has been the source of much debate in recent years, with a survey by research consultancy BDRC Continental on the competitiveness of broadband data costs ranking South Africa at 97th place on a list of 196 countries. In terms of competitive pricing, the country ranks below a number of other emerging economies and mobile data in South Africa is the most expensive out of the continent’s six leading economies. 

More affordable data is essential for both economic development and for unleashing opportunities for South Africa’s youth. Lower connectivity costs will encourage the younger generation to be more creative and to explore entrepreneurial opportunities, which will in turn stimulate future business activity. Data connectivity and digitisation are also vital components in levelling the playing field, especially for smaller businesses, allowing them to compete with larger, more established companies. 

With a struggling economy and low investor confidence, now is the time for South Africa to back entrepreneurs more so than ever. These Sona highlights show positive signs that the President is committed to creating a conducive environment for business development, which will add to the overall success of the country’s economy. It is, therefore, crucial, particularly in trying economic times, that small and medium-sized owner-managed businesses take these opportunities and use them to contribute towards establishing a thriving entrepreneurial-geared ecosystem. 

Ben Bierman is the managing director of Business Partners


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