As South Africa's efforts to attract R1.2 trillion in investment over five years gain momentum, President Cyril Ramaphosa has emphasised the importance of South Africans embracing a culture of entrepreneurship.
During his closing speech at the second South Africa Investment Conference in Gauteng, the President announced a litany of policy and legislative interventions government is embarking on to remove hindrances hampering the growth of small business.
We must look at what needs to be done to promote and encourage the entrepreneurial spirit and an entrepreneurial culture. I have long said that entrepreneurial skills should be included in the basic education curriculum.
Far too often our citizens are risk averse when it comes to entrepreneurship, preferring the so-called comfort of gainful employment to the perceived insecurity that comes with self-employment, President Ramaphosa told a gathering of small, medium and micro-sized enterprises (SMMEs) on the last day of the Investment Conference in Soweto.
Ultimately, the President said, government wants to transform the paradigm and nurture a generation of job creators as opposed to job seekers.
International experience, especially in other developing countries, shows us that economic growth is sustained through small businesses, he said.
The President said his recent engagements with the sector have highlighted myriad challenges entrepreneurs grapple with that stifle growth and sustainability.
Concerns have been raised by SMME owners and operators around access to financing, late payment for services rendered to government, a high regulatory burden, lack of access to information, economic infrastructure and rising fuel and utility costs, among other things.
These challenges, President Ramaphosa said, severely impact the viability of SMMEs and even force some out of business.
As I said in the State of the Nation Address earlier this year, it is government's priority to give greater support to the SMME sector, he said.
President Ramaphosa said working with social partners, government remains committed to improving the legal and regulatory environment, ensuring access to markets and finance, skills training and access to quality infrastructure for SMMEs, especially in townships and rural areas.
Keeping small business afloat
Under the soon to be finalised Public Procurement Bill, organs of State will be required to sub-contract SMMEs to a minimum of 30% of the value of the contract for contracts that are above R30 million.
Whoever receives a tender must sub-contract a minimum of 30% of the value of the contract to SMMEs that are at least 51% black owned. Government will strengthen monitoring and compliance through the Office of the Chief Procurement Officer, the President said.
Compliance with the 30-day payment period plays a key role in ensuring the operational sustainability of SMMEs, the President said. We are going to ensure that SMMEs thrive and succeed.
Organs of State will now be closely monitored on their compliance with the 30-day payment period and any non-compliance is viewed as financial misconduct and will be dealt with accordingly.
Public procurement is being used to promote local production. The tax regime for SMMEs is being simplified, said President Ramaphosa.
This will see SMMEs benefit from designated products when they participate in public procurement systems.
Enhancements have also been made to the venture capital company tax regime to encourage investment in small businesses and junior mining companies. Another measure to support SMMEs is in the form of the Competition Amendment Act. Once it comes into operation, it will increase access to the economy for small, medium and black-owned businesses, said the President.
Government is also stepping up efforts to improve access to information and bringing economic infrastructure support closer to township and rural based enterprises.
We are expanding incubators and digital hubs to townships and rural areas. We are also ensuring that small businesses benefit from spatial interventions like industrial parks, business centres and special economic zones, said President Ramaphosa.
The President said it was important for the country to offer confidence to investors who want to put their capital in the country's SMMEs by growing the sector and improving its viability.
We would like to issue a call to our friends from the global investor community to support SMMEs when it comes to procuring goods and services as part of the projects that will result from the commitments made at the Investment Conference, he said.
Source: South African Government News Agency