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Asande Dhlamini | 27 February 2023

Scqino Duma owns a small shop at the Mai Mai market in Johannesburg. The National Development Plan has forecast that by 2030, 90 percent of all new jobs will be in the SMMEs, which represent 40 percent of all business in South Africa Picture: Paballo Thekiso.

Johannesburg - Last year, local small businesses showed caution but were optimistic regarding the prospects of an economic recovery following the Covid pandemic.

However, several socioeconomic factors have contributed to the decline in business confidence and the failure of efforts to rebuild an already struggling sector.

On Wednesday, all eyes were on the Minister of Finance, Enoch Godongwana, as there was a growing expectation that the government would assist small and medium-sized businesses (SMMEs). In his 2023 Budget Speech, Godongwana offered limited good news for small and medium-sized businesses despite disintegrating growth prospects, difficult domestic and global environments, and a 1.4% annual real Gross Domestic Product (GDP) growth forecast from 2023 to 2025.

Nonetheless, the new fiscal year offers SMMEs some advantages, such as no significant tax increases and a new fiscal support package to encourage the use of renewable energy. Investing in renewable energy will reduce a business’s taxable income by 125% from 1 March 2023, according to the minister.

“There will be no thresholds on the size of the projects that qualify, and the incentive will be available for two years to stimulate investment in the short term,” Godongwana said.

Moreover, to address the energy-related constraints experienced by small and medium businesses, changes to the Bounce Back Loan Guarantee Scheme were proposed to incentivise solar energy as well as address energy-related constraints.

“The government will guarantee solar-related loans for small and medium enterprises on a 20% first-loss basis,” he said.

Some small businesses had hopes that the minister would announce energy packages for small businesses to deal with the impact of load shedding, and would announce bold measures that would deal with the red tape that is involved in accessing capital since it takes longer for businesses to get capital from different government Development Finance Institutions (DFI) agencies.

They had also hoped that the government would address the issue of late payments as this affects the growth and the likelihood of small businesses surviving.

Kabelo Enos Makinta, a 30-year-old digital marketing entrepreneur and founder of Kasi Economy said that, as leader of an organisation that aims to empower small businesses, he was optimistic about the efforts that would be carried out by the government to empower small businesses.

Makinta said he was also interested in hearing about how the government would address the country’s power crisis and its effects on Small and medium enterprises (SMMEs).

“Most business analysts and writers were anticipating that the minister was going to launch a revolutionary programme to address these crucial matters,” he said.

Unfortunately, the speech delivered by Godongwana did not mention anything significant regarding small businesses despite the minister previously stating that the growth of SMMEs was critical to stimulating South Africa’s slow economy.

Makinta said: “No funds were allocated directly to small businesses. I understand during the State of the Nation Address, the president announced a R1.4 billion SEFA budget that will be used to fund 90 000 small businesses, which is about R15 000 per business, which will obviously not make a huge impact on our economy.”

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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