Support and develop black small businesses

2017-03-02 06:00
opinionsibongile somdaka

opinionsibongile somdaka

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According to Oxfam, an international advocacy group, South Africa’s richest 1% of the population owns 42% of the total wealth of the country, emphasising that inequality is widening rapidly.

The sad reality is that these inequality gaps in our country are obvious, everywhere, stark and vulgar, they define themselves mainly along the racial lines.

It’s a sad story of “two nations in one country”. We have Blacks who are characterised by squalor and poverty on the other hand we have white minority group which is characterised by wealth.

Our economic status as Blacks remains piteous. We have been dubbed as the most unequal society in the whole world. We know from everyday experience that Blacks do not own the mines, the banks, insurance companies, estate agencies, big chain stores and supermarkets.

It explains why from our townships and villages, we still pack the buses, trains or taxis every morning to go and report to at other people’s businesses. It explains why we are being called the working class that sweats and creates wealth for others and of course stage protest marches for better wages or service delivery.

The number of Blacks involved in meaningful business is pathetically small. Even few names that are often bandied about are small boys in terms of the overall configuration of wealth in this country. The erstwhile apartheid system has left Blacks worse off economically. A renowned African icon, Kwame Nkrumah taught us to seek first the political kingdom so that all else could be added to us. True, except that it is not automatic. It is not as certain as night follows day that once you have political freedom, economic liberation could just happen. Government of the day must create a conducive environment for Blacks to assume the mainstream economy. Accordingly, current administration has undertaken a series of programmes to redress these past imbalances by introducing business support programmes through the Small Enterprise Development Agency (Seda) and other state owned agencies. Seda’s strategic goals are:

a. Sustainability of small enterprise and cooperatives,

b. Delivery network to reach unserviced areas,

c. Participation of women, youth and people with disabilities in small businesses;

d. Strategic Partnerships for Integrated Support to Small Businesses.

With the shocking rate of unemployment– the support for small businesses remains one of the viable options. It is estimated that the total economic output of small businesses in the country is 50% of GDP and it is also estimated that they provide employment of about 60% of the labour force. Small businesses are therefore an important contributor to the economy and are considered to be critical players for reducing unemployment. However, small businesses are facing a number of challenges such as a lack of management skills, finance and obtaining credit, access to markets and developing customer relations.

To address some of these challenges Seda in the Western Cape has hosted a series of consultative Small Business Seminars with Karoo municipalities under the theme: “Towards Community Driven Economic Development.” These seminars form part of our drive to support rural municipalities to grow and create sustainable self-reliant local economies. We looked at the possible economic opportunities or gaps in those areas that are not tapped yet or that can be expanded or improved, possible areas of collaboration within the small business sector with commercial business, the challenges facing small businesses to flourish and what needs to be done to address the identified challenges. Local government sphere is at the heart of the development process of South Africa. Local government legislation gives municipalities significant powers to address these challenges through local economic development initiatives, integrated development planning. Another view is that there is a mindset that prevents Black entrepreneurs from supporting one another in economic activities to ensure that the rands we have circulate among us as much as possible. Our businesses could do well when we buy as much possible, whatever we need from one another

The seminars assisted us to get a broader view and understanding of the key principles of economic development (including how markets and businesses work) as well as the role of municipalities in supporting economic development. These were followed by an intensive process of debates and stakeholder discussions focused on identifying key economic opportunities, prioritising these, and developing action plans with identified local champions to take these forward. Some of the challenges that were identified by these seminars are that there is no infrastructure, there are no role models and business mentors, bylaws are not business friendly, young people do not get exposure on entrepreneurship, red tape (municipal and other government regulations) and lack of political will from the municipal councils to support small businesses.

Our mentorship programmes with our stakeholders such as Pick n Pay, Clicks, and Woolworths is benefiting a lot of our clients. This programme is aimed at strengthening the performance of small businesses so that they the ability to do business with corporate sector entities. This also provides a platform to small businesses to access potential business opportunities provided by big businesses.

The launch of the Small enterprise finance readiness tool called finfind in November last year is set to benefit small businesses. It’s a web-based solution that provides a wealth of information about business finance, it has built a comprehensive database of all government and private sector funds and enables small businesses to find funders for their businesses. Finfind is unique in that it has researched each fund and mapped their lending criteria. It asks the small business owner key questions and uses these answers to search our lender database to identify the most appropriate funders that match that business’s lending needs

We are therefore making a call on all stakeholders who have interest in the local economic development to come and partner with us.

.Sibongile Somdaka is Seda Western Cape, Marketing Relations Specialist.

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