Small businesses divided on impact of elections - survey

Owners of small and medium enterprises (SMEs) in SA seem to be divided over whether the upcoming national election will result in market stability this year.

A survey by Business Partners indicates that 40% of SMEs are expecting the elections to have a positive impact, 35% of them are uncertain and 25% believing the market will be impacted negatively.

SME business owners indicated in the survey that the greatest challenge that they expect to face in the next six months is cash flow, which is negatively impacted by a volatile environment with fluctuating operating costs.

Siphethe Dumeko, chief financial officer at Business Partners, says there is typically a slowdown in business activity prior to an election. This is reflected in the survey results. Local SME business owners indicated that they are cautiously adopting a "wait and see" stance.

"Whilst we agree that economic conditions are currently tough, SME business owners should take note that in recent times great strides have been made through the Presidency in mobilising foreign investment, which will hopefully start to bear fruit post the elections," said Dumeko.

"This will be important to stimulating SME activity and business confidence. It remains important for SMEs to weather the storm by remaining positive that conditions will improve."

The survey found certain factors which impact SMEs' confidence levels. These include reliable electricity supply; eliminating corruption; an improved operating environment; and ease of doing business.

"Ultimately, the overall wish of local SME business owners is for a more stable environment with economic conditions that will improve their access to business finance," says Dumeko.

"Both the public and private sector partners should work together to improve conditions for SMEs and to provide support to them where possible," says Dumeko.

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