Address by the Minister of Small Business Development, Ms Lindiwe Zulu, on the occasion of the Khayelitsha Business Breakfast, 09 January 2017
KDF Khayelitsha Development Forum,
KBF Khayelitsha Business Forum,
KCT Khayelitsha Trust,
Thank you for the invitation to be here today.
Khayelitsha is steeped in history and is fast becoming an important entrepreneurial hub in South Africa. Through the first democratic election in 1994, residents have established establish small, medium and large businesses.
In my view, township economies play an important role in the country’s financial ecosystem however we take note of the lack of proper infrastructure and lack of appropriate policies to protect informal businesses. We know that there is an opportunity for high end sectors of high impact growth in the region, which include tourism, and creative industries amongst others. These sectors create an opportunity for increased job creation, and high end skills development – which in turn contributes to poverty reduction.
Our commitment to growing the country’s economy is event with the launch of the Invest SA- One Stop Shop by President Zuma on Tuesday.
South Africa remains committed to creating an investor-friendly environment by reducing red tape and administrative hurdles to support the project.
This exciting initiative will provide a one stop shop service to investors offering investment, promotion, facilitation which will enable businesses to thrive and reduce government red tape.
Our government has made a commitment to set the country on a path of radical economic transformation in order to accelerate our onslaught on the triple challenge of poverty, inequality and unemployment. Throughout the world, governments understand that in order to grow their economies and address social ills, they cannot avoid the importance of promoting small business and co-operatives development.
Our president established the Ministry for Small Business Development as part of government’s commitment to place the economy and job creation at the centre stage. It’s time we place SMMEs and cooperatives at the centre of accelerated economic growth and development.
Our President has instructed us to unlock the potential of SMMEs, cooperatives, township and rural enterprises. We are clear that through this intervention, we will be able to unlock economic opportunities and thus achieve inclusive economic growth and sustainable employment, particularly for women, youth and people with people with disabilities.
Indeed, SMMEs and Cooperatives are critical to unlocking economic opportunities and to achieve inclusive economic growth.
We have also recognised the importance of the revival of the Township and rural economies. Historically, townships like Khayelitsha were never created to be business centres but as residential dwellings for the exploited African labour force that served as the backbone of South Africa’s industrialisation and economic development.
In order to unlock the potential of SMMEs and Co-operatives, we have proposed five critical areas that could play a major role in the promotion and development of the small business sector. The five areas are: public sector procurement, building market access into private sector value chains, simplifying the policy and regulatory environment, access to finance, and support to township and rural economies.
The department of Small Business Development have various incentive schemes that assist start-up businesses to establish as asset base for emerging co-operatives to enable them to leverage other support.
Through the Black Business Supplier Development Programme, a costsharing grant, the departent offers a cost-sharing grant to black-owned small enterprises to assist them to improve their competitiveness and sustainability. It provides grants to a maximum of R800 000 for tools, machinery and equipment, and R200 000 for business development and training interventions.
We also offer the Cooperative Incentive Scheme, a grant scheme that supports broadening economic participation by historically disadvantaged communities to enter the mainstream economy wherein the Department:
Small Business Development contributes 100% of the total approved costs of project activities to the maximum of R350 000.
In partnership with the Wholesale and Retail SETA, we shall upscale the Informal Traders Upliftment Project (ITUP), through which we are currently piloting the provision of skills and infrastructure support to a thousand informal traders nationally.
We urge provinces and municipalities to seize opportunities presented by the Shared Economic Infrastructure Facility which seek to support informal businesses generally. We urge provinces and the private sector located in townships and rural areas to work with us and also augment these resources.
The department will expedite the implementation of the National Informal Business Upliftment Strategy (NIBUS), which seeks to create an enabling legal and regulatory environment; provide financial and non-financial support; promote intergovernmental relations to deliver to the sector; encourage the role of the private sector and support of informal trader organizations. In partnership with the Wholesale and Retail SETA, we shall upscale the Informal Traders Upliftment Project (ITUP), through which we are currently piloting the provision of skills and infrastructure support to a thousand informal traders nationally.
We continue to create an enabling environment for the development and growth of SMMEs and cooperatives. We are paying focused attention on the legislative environment to make it easier to start and sustain a business.
We will utilise infrastructure in the form of industrial parks and other properties that are owned by SEFA to further support township and rural enterprises with appropriate infrastructure.
We must consciously strive to build a nation of entrepreneurs and not a nation of job-seekers. We are painfully aware that fostering a culture of entrepreneurship is not something that blossoms over a short period of time. It takes a long time to develop and flourish.
Lastly, we are very excited that South Africa will host the 2017 Global Entrepreneurship Congress in Johannesburg next month. This is the first time this congress will be hosted on our continent and I encourage you to get information on it so we have a solid number of participators from our continent. Africa must take advantage of this gathering as it is one of the biggest global gatherings of entrepreneurs.