Lack of easily accessible support for SME will further cripple the South African economy

Lack of easily accessible support for SME will further cripple the South African economy


By: Sibulele Siko-Shosha

The prioritisation of entrepreneurship is a fairly pubescent concept within the South African perspective.

Democracy brought with it a lot of hope which has seen shifts from an access point of view on how entrepreneurship is perceived and valued. We now live in a society that embraces formal employment as the “safer route”.

For those who choose to follow that path, entrepreneurship has always carried this perception of being a social anomaly and an economic act of bravery. The crippling red tape experienced by South Africa’s hopeful startups for compliance forces most back into the corporate, government, or private employment conveyor belt.

Many still view entrepreneurship as an act that is motivated by dreams. I do not.

Entrepreneurship is a decision made by those who see a need for a change, and acknowledge that the government and big business are not adequately equipped to meet.

Contrary to popular belief, the main function of entrepreneurship in an economy such as South Africa is to give back to our bruised ecosystem as opposed to taking from it.

Why is it seemingly impossible to become a sustainable entrepreneur in South Africa? Experienced limitations are systematic. The burden of troubleshooting the landscape while trying to stay afloat lays firmly on our shoulders.

Having been an entrepreneur for almost 13 years, I have found myself dancing with the possibility of going back to being “safe” and at one point did. At the time, my decision was influenced by the fatigue induced by this very red tape. There has always been a question lingering on my mind why there should be so many proverbial “economic hills” to climb when the very decision to become an entrepreneur is fuelled by bravery?

The fact is, that the South African economy would be crippled without SMEs, a sector that employs 47% of the country’s workforce and contributes 20% toward the country’s GDP. The need to sustainably encourage entrepreneurship goes without saying, or even argument.

Fast forward 27 years later since 1994, an alarming increase in unemployment which is currently recorded at a record of 32.5%, and add to that, a global pandemic, SMEs throughout the country are left in the fuzzy abyss for survival.

Bringing the COVID pandemic into the mix has resulted in many office parks morphing overnight into ghost towns and broken dreams. Overdue personal and business finances have now pushed the brave into succumbing to the dreaded possibility, or worse, the eventuality of failure.

In the United States, data indicates that small businesses have lost 12% of their revenues with more than 100 000 of them closing down permanently. I am sure that once the South African data is released, the reality will be harrowing. This is not only the closure of 100 000 small businesses, but it has consequences that directly affect millions of lives in South Africa.

Just as the delayed effect of the anticipated Covid-19 third wave, South African SMEs need to brace themselves for the storm that is about to hit them hard, if no drastic measures are taken. With an already existing unemployment problem, the crippling consequences of paralysing a sector that brings relief in a crisis, will result in outcomes that are too grim to even imagine.

Recently, spokesperson for the R1bn Sukuma Fund, David Morobe, stated in his published opinion piece that the public-private growth initiative needs to stay committed to investing in SMEs to ensure that we all weather the storm. What raises my brows though is the nationwide assumption that the South African economy is being championed by the hospitality sector. Perhaps it is the creative industry that lacks insight and structure of the needs of the practitioners and SME within the sector need.

Based on personal experience, the “available” structures of SMEs triggered my startup’s compliance struggles. From where I am sitting, it is still the big institutions that will still come out victorious with SMEs lagging yet again in the uncomfortable position of being “poor cousins”. On the other hand, we have seen how the unapologetic “pandemic looting” has played itself out with the relaxed red tape caused by the current state of disaster.

From my point of view, there needs to be that unknown sweet spot between compliance and accountability that ensures that South Africa’s economy thrives.

The only way we can get there is through, is by hearing and understanding the real stories of the brace of entrepreneurs whose failures will have devastating trickle-down effects beyond the personal.

SMEs do not have the time or capacity to be actively participating in the divorce battle between government and corrupt officials, nor is the country able to afford yet another ill-fated commission on such acts.

Maybe this is an opportunity to look beyond what is already known and embrace innovative solutions from entrepreneurs, the people who know the true meaning of turning problems into prosperity during a crisis.

Sibulele Siko-Shosha is the Founder, Creative Director and TV Executive Producer of the Dumile Group.

*The views expressed here are not necessarily those of IOL or of title sites.


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