If the government is serious about unemployment, it will present a clear plan in the budget on how it wants to ease life for SMEs.
Small and medium enterprises (SMEs) significantly contribute to the South African economy. However, this sector faces challenges, which prevents its full potential.
The government needs to find and implement some solutions in these challenges. So, next Wednesday, February 19, the Budget speech will be heard by Finance Minister Enokk Kotongwana.
According to Lula’s Chief Risk Card Rositor, SMEs are under great pressure according to their data.
Pressure facing SMEs
“Our data shows that SMEs face enormous pressure, with a 50% drop of year -of -year turnover.
“More than 15 years of high interest rates have controlled consumer spending ability, which has had a huge impact on all businesses,” he added.
According to Rositor, the sector could not contribute to its full potential to its full potential, which caused almost no growth in 2024 and shrunk in the third quarter.
“The slope is not just a statistics. It is a blatant fact that many business owners are pushing their limits, forcing them to make severe decisions daily to keep the lights.”
Sona has no detail in supporting SMEs
Roster says that in 2024, the Macro economic environment has positive changes in the economic environment Increased government stability More reliable electricity supply, SMEs are still experiencing a reduced liquidity.
“When President Ramaphosa gave his status (Sona) a few days ago, he gave some inspired duties to facilitate business barriers in SME fund, venture capital and informal sector.
“These are the main drivers of real economic growth, but Sona has no detail.”
Rositor says that if Minister Kodongwana will make it clear how it will support the sector, it will be appreciated.
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A clear plan for how to make life easier for SMEs
He says they have heard the same story annually.
“SMEs are not a secret of the country’s lifeline, from 50% to 60% of the country’s employees and contributes to 34% of GDP.”
He believes that if the government is serious about unemployment, it will present a clear plan in the budget on how it wants to make life easier for SMEs.
He says the government should be on the budget on how the government will remove the red tape and regulatory loads to allow businesses to function more effectively.
“Instead of trying to create a public sector employment (using taxpayer money) and incorporation, the government must use the enormous potential of our small businesses and entrepreneurs.”
What the government should focus on
Says that rositor Government does not need to create work Directly; Instead, this should focus on simple efforts that can lead to work creation.
Simple things include reliable electricity and water, good infrastructure and efficient ports.
“South African ports are in the world’s worst areas, which will be a disaster for any importer or exporter.
“This is not complicated, but if they get the basics correctly, the jobs will be followed (and, for the extra benefit, successful businesses will increase government treasures by paying corporate tax).”
Relying
He says that budget speech can play an important role in ensuring the government that the government is confirmed to get the basics correctly.
The government can create private sector jobs by providing reliable energy, transportation, safety and water.
“Small businesses depend on efficient transport networks – ports, roads and rail – trade. We hope the budget talk will clarify how the SMEs will be empowered next year.”
Read: ‘SMEs Rock Stars of our economy’: Why is it so urgent to cut the red tape
GDP for the third quarter
Stats said South Africa The real South African GDP (GDP) weakened 0.3% in the third quarter of 2024 (July -September).
The agricultural industry is the manufacturer of the economy, including transport, trade and government services.
On the cost (required) side, import, export and government consumption are reduced.
Direct contribution of small business
Study 2023 data In the field of small business development, small, micro and medium enterprises (SMMES) contributed 40% of GDP.
84% of those businesses operate in personal services and total/ retail sectors.
Personal services include hairdresser, nature and auto repair.
“SMMES in South Africa often operates on Micro Enterprises (54%) and informal.
“However, the significant driver of the SMMEs, which is properly registered, contributes to more than R2.9 trillion in GDP.”
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