The small business community in South Africa is concerned about the potential lack of will by political parties to follow through on their election promises to create a more conducive environment for small, medium and micro enterprises (SMMEs).
With less than a month to go before the National Elections on 8 May, political parties are using their platforms to advocate their plans for a more robust economy which is linked to SME development.
“There is a definite fear amongst small business owners and entrepreneurs that election messages will once again turn into empty promises,” comments Hennie Ferreira, CEO of Osidon. “While the onus is on government to lead the overhaul of the current business environment, political parties also need to come to the party.
“However, we have failed to see anything ground breaking in their election manifestos that will really solve the current problems faced by SMMEs.”
Ferreira says government and political parties have failed to touch on critical areas that are currently crippling SMMEs.
“We have a toxic business environment, especially for small businesses,” he says. “It is as if everything is geared towards discouraging entrepreneurs rather than providing them with a helping hand. This not only centres around compliance, which is a major stumbling block, the labour environment is also very tough.
When it comes to tax, labour and company compliance, SMMEs are once again faced with an uphill battle, without due course. Not one of the political parties has definite policies to address these challenges.”
SMMEs are earmarked as the future of the economy, representing about 40% of all business in South Africa. The National Development Plan estimates that by 2030, 90% of all new jobs will be within SMMEs.
“There are 37,8-million working-age adults in South Africa today. Of these, 11,9-million people (mostly students and school pupils) are not economically active. Of the remaining 25,9-million, 9,6-million (37%) cannot find work. That’s almost two adults in every five,” Ferreira points out. “It has become very obvious that unless government relaxes labour relations laws to better support businesses, we will continue to face high levels of unemployment.”
Despite being the driving force behind the economy, the SMME sector is continuously facing challenges to reach its full potential. According to a baseline study conducted by Small Business Project on SMMEs, 98,5% of all businesses in South Africa are SMMEs and yet they create only 28% of jobs; whilst the international norm is between 60% and 70%.
“We know how important a fully functional SMME sector is for sustained economic growth,” Ferreira says. “As Osidon we firmly believe entrepreneurs should focus on running their business and not be plagued by compliance and red-tape.”
Osidon is an online digital accounting firm based in Pretoria, offering accounting, tax, payroll, company registrations and general compliance for businesses.