Impact SA

Post-lockdown relief needs to focus on small businesses

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Too much post-lockdown focus is on supporting big players and failed State enterprises, but it is small businesses that need it more.

The focus of the nation’s leaders and key role players tends to be on the pandemic’s impact on big business and state-owned enterprises, which were already in dire straits before the onset of the coronavirus. But too little emphasis is being put on the damage that more than two months of lockdown has done to the critical SMME sector.

This is the warning sounded by Geoff Jacobs, President of the Cape Chamber of Commerce and Industry, in a statement posted on Saturday, 13 June.

As the country emerges from the worst of the lockdown, now is the time to count the damage done to the small, medium and micro-enterprises – and pray the destruction is not terminal for it provides millions of jobs and supports even more, he says.

Before the pandemic, the sector was growing

“We tend to forget how important small businesses are in providing employment and putting bread on tables,” Jacobs states, adding that before the pandemic hit, this sector was growing.

According to the Small Enterprise Development Agency, between the first quarter of 2018 and that of 2019, the number of small firms grew by an additional 450 000. The total number employed by such companies, excluding their owners, rose to 8 million over the same period. At that time, small businesses were the largest employers in the South African economy

“Significantly, every job it provides is not primarily the result of government action (i.e. taxpayers’ money). It is the end product of the get-up-and-go mindset of individual entrepreneurs.”

Smaller businesses must be seen as a national asset

Jacobs emphasises that this why small, medium and micro-enterprises should be regarded as a national asset to be nurtured and encouraged in the coming months, as South Africa struggles to revive the economy.

Do everything to stimulate entrepreneurial flair

Jacobs’ belief is that everything possible should be done to stimulate entrepreneurial flair and create an environment in which it can flourish. Where entrepreneurship is absent, an economy will struggle.

“[This] is why the Cape Chamber of Commerce and Industry was alarmed when its most recent survey showed that, by the end of May this year, 12% of its members were contemplating leaving the country,” he said.

“Should that percentage grow in the coming months, the effect on employment will be critical to the economy of the Western Cape. It’s a situation that must be avoided at all costs.”

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