Boosting small businesses
As large enterprises have restructured and downsized small, medium and micro enterprises (SMMEs) have come to play an increasingly important role in South Africa's economy and development.
The sector has grown significantly. In 1996, around 19% of those employed were in the informal sector of the economy. By 1999 this had risen to 26%. The government has therefore targeted the SMME sector as an economic empowerment vehicle for previously disadvantaged people.
As a result, SMMEs have received significant attention and investment, ranging from the establishment of state-initiated projects to supportive legislation, a variety of funding institutions and government incentives through the Department of Trade and Industry (DTI). The National Small Business Act, passed in 1996, helped to establish many of the supportive structures now in place.
According to Towards a Ten Year Review, a discussion document reviewing the impact of the government's policies since 1994, there were 2.3 million people who owned at least one Value Added Tax (VAT) unregistered company. Of these, only 338 000 owners had employees, a total of 734 000.
These number may raise the question of the job creation potential of these enteprises, but it also demonstrates the level of self-employment, a large portion of which may be survivalist.
Data on small and medium enterprises suggests that these enterprises contribute aboyut half of totl employment, more than 30% of total gross domestic product. Also, one outr of five units exported is produced in the small and medium sector in South Africa.
Department of Trade and IndustryGovernment initiatives, facilitated by the DTI and associated organisations, include the Centre for Small Business Promotion (CSBP), Ntsika Enterprise Promotion Agency and Khula Enterprise Finance.
The CSBP implements and administers the aims of the national strategy, which includes job creation. The DTI has recently signed an agreement with the European Union which will see the EU donating R550m to start a risk capital fund for SMMEs.
The organisation has recently launched the Khula Technology Transfer Fund to facilitate access to local and international technology. In addition, a new fund is being set up to serve businesses in Gauteng, North West Province and the Free State. A similar fund already exists for businesses in the Northern, Eastern and Western Cape, as well as in Mpumalanga, Limpopo and KwaZulu-Natal.
The Franchise Advice and Information Network (FRAIN) strives to supply high quality information and support services to individuals and small business (SMMEs) to ensure growth and improvement of new and existing franchise businesses in South Africa.
FRAIN is a support project of the DTI. It is implemented by Namac (National Co-ordinating Office for Manufacturing Advisory Centres), with assistance from the Council for Scientific and Industrial Research (CSIR).
The National Co-ordinating Office for Manufacturing Advisroy Centres (Namac) is an SMME support agency within the DTI. It is widely recognised as one of the most successful SMME development and support agencies in South Africa.
Namac has developed an extensive delivery structure across South Africa that serves as a channel for the application of new tools, information, products and projects, thus enabling the effective delivery of solutions aimed at SMMEs. The emphasis is on Historically Disadvantaged Individuals' (HDI) businesses.
Business Partners set aside R277.7-million for investment in SMMEs last year. The organisation has invested R4.6-billion in emerging businesses in the past 20 years, directly influencing the creation of 500 000 jobs.
The TEP is funded by the Business Trust and implemented by ECIAfrica.
The main objectives of the programme are to encourage and facilitate the growth and expansion of small and medium enterprises in the tourism economy, resulting in job creation and revenue generating opportunities.
Primary emphasis is placed on historically disadvantaged entrepreneurs and enterprises. For example, at the World Parks Congress the TEP was instrumental in facilitated deals which provided employment for its beneficiaries.