Johannesburg — REGULATION and red tape remains the greatest constraint to business growth in SA, according to advisory firm Grant Thornton's report released yesterday.

The report has come shortly after government announced its intentions to review policies stifling economic prosperity under accelerated growth plans, which will see the introduction of incentives to stimulate job creation.

Leonard Brehm, Grant Thornton SA's chairman, said the problem was not unique to SA, as businesses around the world were suffering under the strain of red tape. "It is a disease of modern business."

Brehm said business growth opportunities were also not being matched with sufficient growth in appropriate skills, which was at 44%, up from 36% last year.

"Lack of skills was likely to constrain economic skills," he said.

Deputy President Phumzile Mlambo-Ngcuka recently launched a new skills initiative, the Joint Initiative on Priority Skills Acquisition, aimed at addressing SA's skills shortage.

The report was based on research conducted last year on 7000 owners of medium-sized businesses in industries in 30 countries, including 300 in SA.

The manufacturing sector was the most affected, with 51% of business owners citing regulations and red tape as a constraint to growth, with 48% citing a lack of skills.

Business growth in the wholesale and retail sector was the least affected by regulations and red tape (32%) and a lack of skills (40%).

Complaints from business owners ranged from labour laws that were too onerous for small businesses; a lack of policing by regulators of employment laws and inefficiency in the way the Sector Education and Training Authorities were run, making it difficult to claim compensation for training.

Just below half of business owners in construction blamed regulation for insufficient growth.