The government has the opportunity to rev-up much needed economic growth in South Africa by creating a stable political environment and the right policies for small businesses.
This is the message from Anton van Heerden, MD and executive vice president at Sage for Africa and the Middle East.
“South Africa’s small businesses are resilient and it is heartening to see how determined our entrepreneurs are to get to the top,” he said.
“They hold the key to creating jobs, reducing inequality and creating a more thriving South Africa.”
Van Heerden explained that it is promising to see the South African government putting the small and medium business sector at the centre of its economic policies.
“The government’s National Development Plan envisages 90% of new employment by 2030 will be generated by (small, medium & micro enterprise businesses) SMMEs.”
He pointed out that Finance Minister Pravin Gordhan also mentioned in his Budget Speech last year some small business-friendly steps, such as easing regulatory burdens for businesses.
“Minister Gordhan also announced that government has earmarked R475m for the Department of Small Business Development to help small and medium businesses.”
Van Heerden told Fin24 that Sage would like further details to be unveiled in the approaching Budget Speech in February.
“We hope that in the upcoming Budget Speech for 2017, we’ll see the finance minister put some more flesh on the bones of government’s plans to drive economic growth and entrepreneurial activity in South Africa.”
Sage is also interested to learn what is important for small businesses.
“By listening to small business owners and supporting them with a stable political environment and the right policies, government has the opportunity to turbo-charge South Africa’s growth.”
In this regard, Van Heerden explained that Sage would welcome more government support for SMMEs around export opportunities, more tax incentives and grants for companies that export successfully.
“We’d also like to see a simpler tax and regulatory environment for smaller companies. For example, turnover tax and exemption from VAT already simplify tax administration for the smallest businesses who take advantage of them, but these concepts could be extended to companies with slightly more than R1m in turnover.”
Van Heerden suggested that micro-business owners should be encouraged to grow rather than face more onerous tax and regulatory burdens once their turnover exceeds R1m. “What about lifting it to R2m or R3m?”
Global research published by Sage ahead of the World Economic Forum found that a mere 17% of small businesses feel represented by politicians in their country’s decision making.
Respondents were from Australia, Benelux, Brazil, Canada, France, Ireland, Italy, Morocco, Poland, Portugal, South Africa, Spain, UK and the US.
Almost half (46%) of them singled out export opportunities, and grants as being the most important thing that government can do to help them.
Improvements around political stability (45%) was highlighted as the second most important, while creating a stable regulatory environment ranked third (38%).
Sage announced the launch of its Forum for Business Builders in a bid to give business builders a platform to connect with policy makers.
It aims to bring entrepreneurs from around the world insights, events and policy-forming partnerships to give them a powerful collective voice that can be heard on the world stage.