Hon. BN Luthuli
Honourable Chairperson,
The Covid-19 pandemic has caused one of the worst recessions in Africa in more than half a century. South Africa has not been exempted. Our GDP growth in 2020 has been negatively affected, and the impact has been devastating for bigger industries and even harsher for small to medium enterprises in the country. It is in this bleak environment that we meet today.
Prior to the pandemic, small businesses already had challenges; the most common included constraints in accessing funds and business networks, exacerbated by the absence of adequate business infrastructure and human resources. The Covid-19 pandemic therefore heightened already existing problems.
Whilst there have been programmes to deal with these challenges, they have not been adequate. The IFP acknowledges efforts by the Department to improve justice for small businesses through the establishment of the Small Enterprise Ombud Service, through the National Small Enterprise Amendment Bill of 2020. It is our hope that this Bill will promote fair trading practices and create a conducive environment for small businesses to thrive.
We also appreciate the support extended to small businesses during the pandemic period through various debt relief programs. However, the stringent qualification and application processes of debt relief schemes availed during the pandemic resulted in some SMMEs being left out. Faced with decreasing revenues, a lack of access to relief funding and an inability to settle existing debts, we saw the closure of a significant portion of small business at the end of 2020. We are hoping that lessons will be drawn from the methods used to roll out these relief packages and provide insights for better future interventions.
We also note with concern the performance indicators for SMMEs reported in the Small Business Enterprise Budget. The number of black-owned SMMEs under the Black Business Supplier Development Programme grew marginally between 2016/17 and 2019/20, whilst reductions were noted for the number of informal enterprises financially assisted through the national informal business upliftment scheme. It is our hope that these figures can improve to accommodate more small businesses.
We are aware of the crucial role played by small businesses in our economy. The 2019 Annual Financial Statistics report shows that of the R10.5 trillion total turnover in the 2019 financial year, R2.3 trillion came from small businesses. It is also encouraging to note that the contribution of small businesses to the total turnover has also been improving over the years, from 16% to 22% between 2013 and 2019, according to a report by Statistics South Africa. Whilst this is a positive gain, more can still be done to promote the performance of SMMEs.
We acknowledge the role played by small businesses in employment creation in our country. Sadly, unemployment remains high in South Africa and the shutdown of various small businesses since March 2020 worsens the unemployment figures, especially for the younger population groups.
The IFP supports this Budget.
I thank you.