Township businesses could be sidelined from government relief funds
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THE recent looting in KwaZulu-Natal and Gauteng has crippled many businesses. Although it may look as though the government’s relief fund for looted businesses will remedy some of the financial losses, township businesses might remain sidelined.
It is unfortunate that the negative impact of the looting has hit small, medium and micro enterprises (SMMEs) and informal black-owned businesses the hardest, essentially crippling the township economy.
In an attempt to remedy this situation, the Department of Trade, Industry and Competition has designated R3.9 billion to support the rebuilding of businesses that were destroyed in the looting and unrest last month. Furthermore, the Department of Small Business Development has established recovery finance for businesses that will combine a grant of 60% and a 40% loan. This is made available to identifiable businesses that are registered. These businesses must also be tax compliant.
Unfortunately, some townhouse businesses do not have insurance to cover their financial losses from the looting. In addition, such businesses will automatically be disqualified from any grant or relief fund, simply because they are not registered. This is a clear indication that the government is still not doing enough for black SMMEs, which are the largest contributors to our economy.
Our businesses are not doing well, and poverty and unemployment are rife. Even with the establishment of the National Youth Development Agency’s Youth Enterprise Rebuilding fund, one of its key requirements for a business to qualify is that it operates formally as a micro-enterprise.
We need to challenge our government to give us a clear programme of action. While the recent unrest has affected investment opportunities in the country, we should be cognisant about how this affects informal black-owned township businesses and how we can be proactive in assisting such businesses over the long term.
Malusi Zondi is the president of the Black Business Federation.
* The views expressed here are not necessarily those of IOL or of title sites.
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