President Cyril Ramaphosa says that small, medium and micro-enterprises and cooperatives will play a key role in South Africa’s Covid-19 recovery.
In a media briefing this week, the president said that in many developed and developing economies, SMMEs generally account for over 90% of all formal businesses.
“They contribute significantly to GDP and create and sustain lots of jobs in those countries. In South Africa, while 98% of formal businesses are SMMEs, they make a far smaller contribution to employment and GDP.
“If we are to achieve the goal of the National Development Plan for SMMEs to create at least 90% of the targeted 11 million new jobs by 2030, we need to pay far closer attention to developing small businesses.”
As the country make the transition from relief to recovery, Ramaphosa said it is critical to provide support to enable companies to recover.
At the same time, government needs to introduce new business processes, technologies and equipment to assist them to adjust to the new reality, he said.
“The era of big corporates creating thousands of jobs has passed. We have recognised that this is the era to open opportunities to entrepreneurs and we have set procurement targets to empower this sector.”
Ramaphosa said that another key element of the Economic Reconstruction and Recovery Plan is localisation.
“We expect SMMEs and co-operatives to play a central role in driving localisation. They are nimble and have great insights.”
“Some work has already been done by this department to introduce SMMEs and co-operatives to wholesalers and retailers. We really need our corporates to come on board for us to build strong local capabilities.”
Ramaphosa added that government was not asking corporates to buy goods just for the sake of buying locally.
“We are saying that they should buy local quality goods that can compete with the ones that they are importing and that create much needed jobs in the country.
“In this regard, the state, including our state-owned enterprises, must take the lead. ”
Ramaphosa said that the Department of Small Business Development is already supporting those that need assistance with certification, quality improvements, compliance and the like.
“There is really no excuse for not buying locally.”