Enterprise development is not flowing where it should

South Africa pours billions of rand into Enterprise and Supplier Development (ESD) every year.

Yet, in a country where 70 to 80 percent of small businesses fail within their first five years, that money is not translating into sustainable enterprises. (OECD, 2020)

Much of ESD activity is framed around compliance, with corporates ticking boxes to satisfy B-BBEE requirements.

Training programmes, grants, and mentorship abound, and success stories are celebrated in glossy annual reports.

Yet one crucial flow, from market access to bankability, remains broken, and it is here that South Africa’s Enterprise Development efforts are falling short.

The promise of market access is frequently cited. SMEs are introduced to corporates, pilot projects are initiated, and programs boast impressive uptake numbers.

In reality, however, most small businesses are showcased without being structurally integrated into procurement pipelines.

Contracts are often short-term, risk is pushed onto SMEs, and repeat business is rarely guaranteed.

Without predictable revenue streams, even the most capable SME struggles to survive, let alone scale.

Many SMEs that show promise end up falling off the map once funding cycles or pilot periods end. This creates a pattern where visibility exists, but meaningful growth remains elusive.

This weak link has a cascading effect.

Banks and investors see these businesses as high risk because their performance is episodic and under-documented.

SMEs, in turn, remain dependent on grants or sporadic corporate work.

The visibility ESD provides is real, but sustainability is rare.

Money flows into businesses, but it does not create enterprises that can stand on their own.

The result is an ESD ecosystem that produces short-term impact and long-term dependency, which is exactly the opposite of what transformation programmes are meant to achieve.

In 2026, corporates have an opportunity to rethink ESD as more than a compliance exercise and transform it into a genuine growth engine.

Embedding SMEs into multi-year procurement pipelines would ensure that businesses receive consistent work, allowing them to build operational capacity and financial stability.

Tracking measurable outcomes such as revenue growth, job creation, and financial resilience, rather than focusing solely on training hours or rand values disbursed, can align corporate incentives with the long-term success of SMEs.

At the same time, deliberate linkages to formal finance, through credit readiness programmes, co-guarantee facilities, or data-sharing frameworks, can help SMEs graduate from dependency into bankability, demonstrating tangible performance to banks and investors.

The lesson is clear.

Money alone does not create sustainable SMEs. It is the flow of predictable revenue, structural integration, and access to finance that determines whether South Africa’s small businesses thrive.

In 2026, corporates have the chance to redesign Enterprise Development around outcomes rather than optics, ensuring that billions invested finally flow where they are needed most, into enterprises that survive, grow, and contribute meaningfully to the economy. If this flow is corrected, South Africa can finally turn ESD from a compliance exercise into a powerful engine for transformation and long-term growth.

Zemvelo Ndlovu is a Marketing Strategist and ESD Specialist at Brandscapers Africa.

BUSINESS REPORT