SA business leaders come to the rescue of SMMEs

A group of young South African business leaders have come up with an initiative aimed at establishing a synergy with President Cyril Ramaphosa’s efforts to assist the struggling small, medium and micro enterprises (SMME) sector, which has been hardest hit by Covid-19.

Since the outbreak of the global pandemic, Ramaphosa has announced various initiatives to rebuild the economy, including measures to keep SMMEs afloat.

In line with the National Development Plan for SMMEs to create at least 90% of a targeted 11 million new jobs by 2030, Ramaphosa has pledged to pay closer attention to SMMEs.

Since the Covid-19 outbreak last March, more than 2 million South Africans lost their jobs in the second quarter of 2020, with the economy contracting by 16.4% compared to the previous quarter.

Government initiatives have included:

• Department of Small Business Development, together with the Small Enterprise Finance Agency, reprioritising R500 million to establish the SMME Debt Relief Scheme.
• Setting up of a R200 billion credit guarantee scheme, which has provided R16 billion in low-interest loans to about 12,000 businesses.

Spearheading the new SMME initiative are Forbes Africa 30 under 30 list maker Zareef Minty, former Miss South Africa Teen winner and actress Celeste Khumalo, Ghanaian ambassador of tourism in South Africa Matthew Mensah and businesswoman Maipelo Letebele.

According to Minty, the survival of the SMME sector required a collaborative effort much bigger than the government alone.

“We have all thrown our hats in the ring to fight for the survival of SMMEs in South Africa and in Africa,” said Khumalo.

Said Minty: “We understand the value SMMEs bring to the economy and to the communities in which they operate. Keeping the lights on goes well beyond the success or failure of that small business.

“A single SMME feeds a community, uplifts a family and changes the lives of people it provides with jobs and opportunities. We cannot allow SMMEs to fail – especially during this pandemic.”

In many developed and developing economies, the SMME sector accounted for over 90% of all formal businesses, contributing significantly to gross domestic product (GDP) and creating jobs.

While 98% of formal businesses in South Africa were SMMEs, they made a far smaller contribution to employment and the GDP.

“This campaign will provide each SMME with a survival pack. The survival pack will allow for SMMEs to have spaces to work from nationally with locations all around the country for a period of 12 months, where they will get free coffee, Wi-Fi and parking daily.

“The campaign will run for 30 days with a target of saving 1,000 SMMEs. Other benefits include weekly and monthly networking events, motivational events and an opportunity for two SMMEs every month to win trips to countries in Africa.

“Looking at global statistics, 70% of SMMEs fail within the first two years of being registered. In South Africa, 98.5% of all registered businesses in the country are SMMEs and yet created only 28% of jobs, while the global norm for this is 60% to 70%,” Minty said.

• brians@citizen.co.za