The Gauteng Economic Development MEC Qedani Mahlangu said in a News24 article last Monday that the government had put in place plans that would support the Small and Medium Enterprises in the province with the aim of growing the economy and creating jobs:

“In one such initiative … 100 000 young men and women entrepreneurs will be trained and assisted financially so that they can employ three and five people each to create one million jobs.”

Are these initiatives what the South African small business entrepreneurs asking for? Local SMME Business Owners responded to a question in the Sage Business Index around what they felt were the most important things Government can do to assist businesses as follows:

Skills development and education 48%
Reduce business bureaucracy and legislation 40%
Reduce business tax 37%

These priorities are potentially stemming from the sentiments of South African SMME business owners that government bureaucracy remains a hindrance. Businesses are in agreement with the factors that restrict them – irrespective of country the least favourable aspect of doing business is government bureaucracy and legislation, followed by governments handling of economic challenges.

Over half (53 percent) of South African businesses polled say that government bureaucracy and legislation is one of the least favourable aspects of doing business. When probed further, 62 percent of businesses stated employee and labour law whilst 48 percent said procurement and tender procedures for public sector contracts were the most cumbersome aspects. Smaller businesses further cited a lack of sufficient support and advice.

Money matters ranked highly amongst South African SMME’s, with 43 percent of smaller businesses (two to twenty four employees) declaring that they experience trouble managing cashflow, and that a lack of funding or access to capital is problematic (28% of one person businesses compared to 10% of 500+ employee businesses).

It will be interesting to see whether the measures which MEC Mahlangu has made mention of to support entrepreneurship and aid job creation tactics in South Africa will have a positive effect on the sentiments of the SMME business owners and entrepreneurs in next year’s Sage Business Index, in comparison to the results currently on hand (conducted during July & August 2011).

 

What are the least favourable aspects about South Africa as a place to do business?