Future lies in small businesses

WHITE RIVER – The role of small businesses in the economy came under the microscope again this week when the Department of Trade and Industry (dti) hosted its national summit on the matter. This year, Mpumalanga had the honour of partnering with the department and delegates who converged at Ingwenyama Conference and Sports Resort.

Policy makers from the three spheres of government attended as well. Ms Pinky Phosa, MEC for the Department of Economic Development, Environment and Tourism, opened the proceedings, before Ms Elizabeth Thabethe, deputy minister of dti, had the floor.

She said the summit aimed to interrogate the role of small, medium and micro enterprises (SMMEs) in the implementation of the national development plan (NDP). The theme for this year’s three-day summit, which came to an end on Thursday (yesterday), was The Role of SMMEs in South Africa’s Industrialisation Path.

Mr Lionel October, director general of dti, said the country was faced with specific challenges. “What came out of the presentations so far, is the scope and scale of the economic challenges we face,” he said during the session before lunch on Wednesday.

October pointed out that since young people were joining the job market at a faster rate than the economy was growing. He said that, at best, the country’s unemployment rate was 25 per cent. “Our central challenge is to grow the economy,” he told delegates. “Growth of two per cent is expected, but we need six per cent.”

The international monetary fund recently indicated that it expected South Africa’s economy to grow by only two per cent this year, after forecasting growth of 2,8 per cent in April. A year ago, it even had the country’s expected growth for 2013 at three per cent.

He compared the country’s unemployment rates with those of South Korea, that has the same population, and Brazil, a fellow BRICS-member. The conclusion, was that more focus needs to be on the agricultural and agro-processing sectors, as these are very labour intensive.

Another important challenge is business upliftment of the informal sector and township business. According to October, the government has available financial incentives and grants for these small businesses. Many of the and 50 small business owners exhibiting their wares were from Mpumalanga.

In addition, the dti expected more than 500 entrepreneurs as well as small business financiers, academia, consultants and experts to attend overall, according to Mr Sidwell Medupe, spokesperson for the department.