The full potential of SMMEs to tap into the economy through Special Economic Zones (SEZs) is yet to be realised, according to Trade, Industry and Competition Regional Industrial Development Director Thami Klassen. He told the Buy Local Summit this week that while there had been some progress, there was still room for improvement.
Klassen was part of a panel that was discussing how SEZs drive localisation, assist SMMEs and create jobs. SEZs are geographically designated areas set aside for specifically targeted economic activities to promote national economic growth and exports by using support measures to attract foreign and domestic investments and technology.
The panel discussed the importance of SEZs in promoting market entry and growth of small and medium-sized businesses. According to Klassen, the department was looking to amend the SEZ Act in order to address and understand the challenges of SMMEs in relation to the zones. “The township economy and the rural economy play a significant role in advancing the process of industrialising and creating most of the required inputs of some of the SEZs,” he said.
“SMMEs have been involved during the phase of the procurement of services and construction in SEZs and Industrial Development Zones. For example, the Tshwane Automotive SEZ has achieved the targets that were set in procuring goods and services from enterprises based in Mamelodi and Eersterus. “There is also an SMME centre where people go for jobs, opportunities and skills among others,” he said.
Klassen pointed out that Gauteng-based SEZs had performed well in this regard. “For these SMMEs, skills have improved, and BBBEE ratings and employment levels have also improved,” he said. “A chunk of the R3.4 billion allocated to infrastructure has gone to SMMEs, and they directly benefit from (procurement opportunities.” Despite these improvements, Klassen admitted that there were areas that needed focus concerning SMMEs and the township economy. He also said creativity and innovation within SMMEs needed to be refined or overhauled so that they could learn how to start developing products that would replace products or add value, particularly in the manufacturing sector.
“Our incubation programmes have not yielded that much of positive indicators to lead us in the right direction, but they have played a huge role and we need to up that game, to foster innovation and creativity so we can accelerate the delivery of these products,” Klaasen said. In his address to the Buy Local Summit, President Cyril Ramaphosa noted the importance of buying local products in fostering SMME growth.
“Local production is important because it encourages national pride in the goods, services and products made on our home soil,” he said. “It supports the growth of small businesses and the expansion of larger firms, creates employment and sustains livelihoods, and supports our manufacturing sector.”