President Cyril Ramaphosa has promised billions in funding for small businesses. Picture: Phando Jikelo/African News Agency (ANA)
Johannesburg - President Cyril Rampahosa delivered the eagerly awaited State of the Nation Address (Sona) on Thursday evening.
While the most significant talking point may have been around the energy crisis and the measures to be put into place to try to pull South Africa out of the dilemma of load shedding, there was more that small businesses could take out of the President’s address.
Small business owners have long decried the processes and procedures in various sectors that impede their ability to comply with regulations and therefore build legitimate entrepreneurial ventures.
The president referred to the progress that has been made since he announced last year that the presidency would be working to reduce the red tape that has long hampered business growth and sustainability.
“Last year, I announced that we would be seeking to reduce red tape so that we can rid our country of the unnecessary bureaucracy that often holds us back. The red tape reduction team in the Presidency, under Mr Sipho Nkosi, has been working with various departments to make it easier to do business.”
“It has taken a collaborative approach, working with departments and agencies in areas such as the mining rights system, tourism transport operator licenses, visas and work permits, early childhood development and the informal sector,” he said.
He announced that efforts were in an advanced stage and that the Businesses Act would soon be finalised.
“This year, we will finalise amendments to the Businesses Act to reduce regulatory impediments for SMMEs and co-operatives and make it easier for entrepreneurs to start businesses,” said Ramaphosa.
Luke Kobane, a Pretoria businessman, is sceptical and feels it’s just more of the same rhetoric with little in the way of action.
“He told us about the red tape reduction team last year already. He really shouldn't have been telling us the same thing. We expected to hear that everything was finalised and that we could go about our business,” said Kobane.
President Ramaphosa announced billions in funding to be provided to aid would-be entrepreneurs.
Through the Small Enterprise Finance Agency – SEFA – we plan to provide R1.4 billion in financing to over 90,000 entrepreneurs.
“Government, in partnership with the SA SME Fund, is working to establish a R10 billion fund to support SMME growth. Government is looking at the possibility of providing R2.5 billion for the fund and for the balance of R7.5 billion to be raised from the private sector,” said Ramaphosa.
Furthermore, he indicated that the government would look to use PostBank as a vehicle to provide and facilitate banking services for SMMEs.
“The licensing of the Postbank will lay the foundation for the creation of a state bank that will provide financial services to SMMEs, youth- and women-owned businesses and under-served communities.”
“As the National Assembly considers the Postbank Amendment Bill, the Postbank is reviewing its service offerings so that it can provide a viable and affordable alternative to the commercial banks,” he said.
Speaking to BussinesTech, Business Leadership South Africa (BLSA) expressed that they are hopeful of the progress made even though, in their opinion, the Sona didn’t deliver much in new measures to pull South Africa out of the quagmire.
BLSA also intimated that they were in support of pro-business interventions like the cutting of red tape, which promises to ease the burden on small businesses.
vusi.adonis@inl.co.za
IOL Business