SouthAfrica.info (Johannesburg)

27 May 2014

South Africa: First Identify Challenges to Small Business - Zulu

Lindiwe Zulu, the woman in charge of South Africa's newly created Department of Small Business Development, says that while the role of small business in job creation is widely recognised, it is important to be sensitive to the challenges faced by the sector.

"It's about dialoguing with them to see where the challenges are," Zulu told SAnews after her swearing in as the new minister in Pretoria on Monday.

"This is a new ministry, but the sector is not new," she added. "There's a lot of work that's already been done by the Department of Trade and Industry and other departments. For us it will be about pulling out that work and seeing what has worked and what hasn't."

Zulu said that skills development and financing were some of the challenges faced by small businesses. "Sometimes people get a little money and they think that they've got a lot, only to realise that that money wasn't really enough. So the issue of saving amongst our people is also very important."

The former International Affairs adviser has travelled extensively on the continent and has seen how small businesses thrive in other countries - and how foreign nationals who come to South Africa start up thriving small businesses.

"You look at some of the foreigners that are in South Africa today. They arrive in South Africa with almost nothing, but they network, they support each other. Those are the things I think one would have to deal with in assisting SMMEs, because there's got to be a connection, networking and support for each other."

The department will also look at the issue of the government not paying small businesses within the prescribed 30-day time period, while also engaging with the country's financial institutions and helping to get small business owners organised into formations.

"We need to find a way to pull people together; the issue of cooperatives, for instance, is one of the most important elements," Zulu said.

Business welcomes new department

Earlier on Monday, the South African Chamber of Commerce and Industry (Sacci) welcomed the establishment of the new ministry, saying it had been "high on the chamber's wish list".

"Sacci has and will continue to engage towards an SME department that serves the development interests of SMEs and the economy," Sacci CEO Neren Rau said in a statement.

"This includes simplifying the SME regulatory environment, reviewing and expanding incentives for SMEs, and championing the cause of SMEs with other government department and the Presidency vis-à-vis policy development."

In his 2014 Budget speech in Cape Town in February, former Finance Minister Pravin Gordhan said small business people had raised concerns that they were not receiving enough support in order to raise their enterprises to levels at which they could contribute to the country's growth.

The Budget allocated R6.5-billion over three years for supporting small and medium enterprises.

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