The National Informal Business Upliftment Strategy (NIBUS) is driven by the Department of Small Business Development to address the development void at the lower base of Small, Medium and Micro Enterprise (SMME) Development.
The NIBUS seeks to uplift informal businesses and render support to local chambers/business associations and Municipal Local Economic Development offices to deliver and facilitate access to upliftment programmes. The focus will mainly be on designated groups, i.e. women, youth and people with disabilities, in townships and rural areas of South Africa. The strategy advances Government’s priorities of speeding up growth and transforming the economy to create decent work and sustainable livelihoods through inclusive growth.
The strategy specifically targets entrepreneurs in the informal economy. This sector has been identified as critical in addressing the key developmental goals of the Government, namely sustainable livelihoods (poverty), job creation (unemployment) and equality (inequality). More than two million South Africans are making means in the informal economy, mostly as survivalist enterprises. There are also vibrant economic business activities that need support to graduate from survival to sustainability and performance.
The development and implementation of NIBUS has been through an extensive consultation and engagement process with various stakeholders, including national departments, provinces, municipalities, agencies, chambers, sector departments, Treasury, ESEC, MINMEC, NEDLAC and specifically COGTA, NHTL and SALGA at 2 national level. Other stakeholders include donors, national funding institutions, intermediaries, service providers, the private sector, informal business organisations/associations and civil society.
TARGETED INFORMAL BUSINESS BENEFICIARIES
Due consideration was given to, among others, the Government’s Programme of Action and the objectives and key targets of the National Development Plan. The strategy acknowledges that informal business activity cuts across economic sectors. From the national approach, the strategy prioritises five economic sectors for intervention; however, provinces and municipalities will identify their own priorities beyond the five, given their economic conditions. The identified five sectors are:
Retail: Seventy-eight per cent of informal business activities are in this sector. Increasing the trader’s (street traders, spaza shops, general dealers and those in markets) competitiveness through skilling and infrastructure upgrade is paramount. One of the goals is for the growth and transformation of the sector into activities such as bulk buying, warehousing and distribution;
Manufacturing: A value-creating economy is important beyond simply buying and selling. The need has been identified to support enterprises in this sector as it has a potential to create more jobs and greater contribution to the country’s Gross Domestic Product (GDP). This further advances the objectives of the Industrial Policy Action Plan (IPAP) and the National Growth Path (NGP);
Services: Most township businesses are in this sector, which include, amongst others, auto body repairers (panel beaters, spray painters, etc.), mechanics, car washers, hairdressers, tourism, day-care centres;
Agriculture: The strategy identified this sector given its rural base. Both primary and secondary (agro-processing) activities are being targeted; and
Construction and maintenance: Given the country’s focus on Strategic Infrastructure Projects, building a force of artisans who are entrepreneurs is critical.
STRATEGIC INTERVENTION PILLARS
1. Strategic Pillar One: Creating an Enabling Legal and Regulatory Environment
2. Strategic Pillar Two: Upliftment through Enterprise Development
3. Strategic Pillar Three: Facilitate of Intergovernmental Relations for Delivery
4. Strategic Pillar Four: Partnership and Stakeholder Management, e.g. Business Associations, civil society organisations etc.
5. Strategic Pillar Five: Empowerment through Information (Knowledge) Management
The Informal Business Upliftment Programme will comprise the following instruments (incentives):
Shared Economic Infrastructure Facility (SEIF)
This will cover the funding of a common Infrastructure that is new, upgraded or maintained and shared by an number of informal businesses, SMMEs and co-operatives, e.g. markets, township industrial parks, etc
Offering: 50:50 cost-sharing grant to a maximum of R5 million
Disbursements: To be disbursed as per agreed milestones
Administration: Administered under the Critical Infrastructure Programme (CIP), which is one of Department of Small Business Development’s incentive schemes
INFORMAL AND MICRO ENTERPRISE SUPPORT PROGRAMME
To target informal businesses and prioritizing women, youth and people with disabilities who own businesses based in townships, rural areas and depressed areas in towns and cities.
- Skills development (technical, business and computer skills etc.)
- Marketing and branding (promotional material such as in construction, CIBD, brochures, signage etc.)
- Product improvements (standards, quality, recipes, manuals etc.)
- Technology support (software procurement, installation, point of sale etc.)
- Stock, raw materials, supplies etc.
- Tools, machinery and equipment (heavy, fixed and immovable) Basic compliance (Business Registration at municipalities or CIPC, Tax, UIF, PAYE, Accreditation, licensing etc.)
- Organisational development support
- Governance (memorandum and articles of association, constitution and training etc.)
- Management Training
- Operational systems and policy development (HR, finance, legal, compliance – SARS , PAYE, UIF, SDL, VAT, tax returns)
- IT (membership database system, website, etc.)
- Projects support (linked to the Department of Small Business Developmentâ€™s incentives, etc.)
- Basic office infrastructure and technology (computer, printer, software, internet and landline connectivity desk, storage, etc.)
INFORMAL TRADERS UPLIFTMENT PROJECT (ITUP)
ITUP is a pilot project emanating from IMESP as a Pilot. The aim is developing the capacity of informal traders/retailers to increase the competitiveness of local traders and develop decent jobs within the sector. It is a 50/50 partnership between Department of Small Business Development’s and the W&RSETA.
The project goal is to identify, train, coach, mentor and provide infrastructure support to 1000 informal traders including capacity building for Informal Trader Organisations in all nine provinces over 18 months in partnership with relevant stakeholders.
- Introduce mind-set shift for South African Informal, Small and Micro Enterprises/Co-Operatives in the Retail Sector to grow and run vibrant businesses
- Increase the competitiveness of these businesses through appropriate measures such as business training and infrastructure improvements.
- Reduce the incidence of businesses that are driven out of the market by competition
- Develop the internal capacity of Informal Trader Organisations and similar support bodies by providing Organisational Management Skills training.
- Develop partnerships with other stakeholders to implement the project.
- Increase in Profits
- Job Creation
- Business Sustainability and Expansion
- Growth in Asset Base
- Eligibility for Intermediary and Advanced Programs
- Business Formalisation
- South African Citizen
- Registered/ Not Registered
- Local Resident
- Basic Literacy and Numeracy
- Growth Plan
The main activities for ITUP involves the provision of training on attitudinal, business and retail operations skills and provision of infrastructure support to the following target market especially from depressed and poor communities:
- Spaza and Tuck shops
- Street Traders
- General dealers
- Permanent and Temporary Markets
- Informal Traders Organisations
The following are areas of development informal traders will be trained on by the training providers:
- Introduction to Entrepreneurship
- Advertising and Promotion
- Customer Care and Service
- Basic Financial Management
- Purchasing Skills
- Legal Issues i.e. by-laws and compliance
- Health and Food Safety incorporating personal hygiene
- Merchandising incorporating stock rotation and stock receipts & taking
- Point of Sale