Nafcoc takes credit

2014-08-03 15:00

The National African Federated Chamber of Commerce (Nafcoc) says government’s new small business department was its brainchild and was set up as a direct consequence of Nafcoc’s lobbying of the ANC.

Now it hopes the new department will make the small and micro businesses that Nafcoc represents the focus of interventions around the very broad concept of small, medium and micro enterprises (SMMEs).

The celebrated claim of the National Development Plan (NDP) that most jobs will come from SMMEs seems to refer mostly to the other, medium side of the spectrum.

Nafcoc’s leadership council resolved to lobby government for such a new government department at its 49th annual conference in June last year, says Nafcoc CEO Matodzi Liphosa.

After taking it up with the department of trade and industry, Nafcoc went straight to the ANC early this year to argue for the new ministry, as well as for a larger involvement of the organisation in every aspect of small business policies and interventions.

The policy paper it gave the ANC in January this year proposed that Nafcoc be given an almost institutional role in the new department.

Nafcoc’s proposal to the ANC involves using the organisation’s network of roughly 450 branches all over the country as information desks and monitoring agencies for government programmes.

The organisation also offers to “second” people from the private sector into “strategic positions” in government to help implement policies.

“We don’t want to handle government money. We don’t want to be part of the bureaucracy. We’re just saying there has to be a mechanism to ensure all that money reaches people,” says Liphosa.

South Africa’s economy is not just divided between big corporations and the sprawling SMME sector, he adds.

The SMME landscape is also divided into two worlds?–?the small “white and Indian” companies, on one side,?and the black businesses in townships and villages on the other.

These black businesses are overwhelmingly small and micro retail operations. The overall objective must be to “migrate” these retail businesses into wholesale and manufacturing.

South Africa’s business organisations need to unite, says Liphosa.

“You have Nafcoc standing alone, Sacci [SA Chamber of Commerce and Industry] alone, Busa [Business Unity SA]?...?we’re no longer there. The BBC [Black Business Council] does its own thing. Then there’s the Afrikaanse Handelsinstituut [AHI]. The foreign business chambers operate alone.”

Nafcoc is conspicuously absent from the list of organisations consulted by the Davis Tax Committee for its first interim report on the taxation of small businesses, which was released last month.

Busa, Sacci and the AHI provided input to the committee.

Liphosa says of the committee: “We were not aware. The committee has to choose who to approach. There is white and black small business. I suspect the committee looked at white business.”

Nafcoc has also not looked at the first interim report of the committee.

“You would expect the committee to do a road show,” he says.

Unlike the committee, the new minister of small business will have a “constituency in the townships”.

The committee’s interim report on SMMEs followed the lead of the NDP in identifying the larger “entrepreneurial” businesses as the great hope in job creation?–?explicitly excluding “survivalist” enterprises like taxi operators and spaza shops.

Taxi operators and shop owners are “trapped” in their industries, he says.

Nafcoc sees its constituency as facing two threats?–?more efficient competition from immigrant traders, as well as the continuing proliferation of shopping malls.

Malls serving townships “squeeze out the small guys”, says Liphosa.

“In Indonesia, you don’t have those supermalls with one or two anchor tenants; you have more small shops. There is already grumbling about the malls. Chances are there will be an uprising against them.”

However, the answer lies with the suppliers, not the larger retailers.

“Volume is key,” says Liphosa.

The kind of interventions he has in mind include the provision of premises for collective bulk buying by local micro retailers.

He also proposes the creation of marketplaces to emulate the (often ­ state-subsidised) market culture in other developing countries.

“If you create the market, the production will follow.”

Small Business Development Minister Lindiwe Zulu delivered the department’s first budget vote in Parliament last month.

Her speech largely revolved around what functions and agencies the new department would be taking over from the department of trade and industry. The key new intervention from the department will be centres of entrepreneurship that will be established in each province.

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