The 2019 general elections are only a few days away, which presents South Africa’s entrepreneurs and small business owners with an opportunity, on 8 May, to carefully select which political party or individual they believe has the best interests of local Small & Medium Businesses (SMBs) at heart.
It is vital that South Africa’s SMBs thrive, since they have a key role to play in supporting job creation. No other sector of the economy can provide a more tangible base to fully realise the potential of supporting political parties’ mandate to create more employment.
Furthermore, the newly-formed government will have the opportunity to boost the SMB sector further by removing numerous obstacles that small businesses face, providing clear policy certainty and investing in infrastructure.
Here are a few positive steps we would like to see the government take as part of its strategy to turbo-charge economic growth:
Focus on quick wins that improve the ease of doing business in South Africa and encourage entrepreneurs to invest
In his State of the Nation Address in February, President Cyril Ramaphosa set a target of ensuring that South Africa moves up from position 82 on The World Bank’s annual Doing Business Report, to within the top 50.
Sage believes the government should evaluate steps like streamlining SARS processes such as VAT refunds and issuing tax clearance certificates, together with increasing the maximum thresholds for turnover tax and VAT registration.
Use government spending to support small business
The government could make it simpler and faster for small businesses to register as suppliers by making more effective use of digital platforms. President Ramaphosa has committed to allocate at least 30% of procurement spend to small businesses and cooperatives. It’s a good start, along with commitments to pay small businesses faster.
Look at creative ways to alleviate the power crisis
The government should focus on creative and sustainable ways to address the ongoing crisis at Eskom, which is one of the most significant factors weighing down business confidence. The recent weeks of Eskom load shedding were disruptive for many small businesses and their employees. Government should be looking at how it can accelerate the renewables procurement programme to improve power supply.
In addition, the national government should consider tax rebates similar to the Solar Water Heater Rebate Programme to support smaller businesses that want to install generators, solar lighting and other solutions that could help them remain operational during power outages or to be less reliant on the national grid.
Increase focus on trade and exports
As a major supporter of the African Continental Free Trade Area, South Africa has an opportunity to grow exports into new markets and to become an African standard bearer for regional, continental and international trade. However, small exporters and importers are often left out of the conversation. Government should include SMBs in trade missions and delegations to help them grow into world players.
An economic spring
We have seen a renewal of the country’s government institutions and political landscape under President Ramaphosa’s new dawn. Now, the focus of the post-election period should be on bringing about an economic revival. Entrepreneurs should vote for the parties they believe can deliver the policy certainty the country needs to thrive.
A reinvigorated SMB landscape could play an instrumental part in an economic spring for South Africa. In a climate of policy certainty and ease of doing business, SMBs have the potential to create millions of jobs, uplift communities and, ultimately, reduce poverty and inequality. It’s time to put them front and centre in economic policy so we can unleash this sector’s real potential.