To say that the exclusion of SMMEs in the government’s economic reconstruction and development plan and the mid-term budget speech is disappointing, would be putting it mildly.
For 25 years the government has been paying lip service about how important SMMEs are for economic growth and job creation.
Their actions were yet to match their words, according to Black Business Council chairperson of the Senate and SME portfolio committee head Buhle Mthethwa.
Mthethwa spoke to Vutivi News following the Medium-Term Budget Policy Statement delivered by Finance Minister Tito Mboweni on Wednesday.
Mboweni said that small businesses have a role to play in returning the economy back to where it should be.
But Mthethwa described this common and unsatisfactory rhetoric.
“One has a full appreciation of the rock and the hard place the minister has found himself in,” she said.
“However, from an SMME point of view I am disappointed, and my disappointment comes from a point wherein government has continuously said that the SMME sector is the driving force for economic growth.”
She said the state continuously agreed that a strong SMME was vital.
“My disappointment largely comes from the fact that the government came up with the R200-billion relief fund for businesses and that relief fund was not pro-SMME and not pro-black business in terms of the criteria they placed for small businesses to access it.”
However, Mthethwa said the R7-billion allocated to the Land Bank must be recognised.
“The allocation of the R7-billon will greatly assist small farmers in accessing funding, as agriculture is a key component of our economy and our food security,” she said.
That, Mthethwa believed, was all Mboweni had to say in the way of supporting SMMEs in his speech.
She also said that the R10.5-billion allocation to ailing South African Airways was extremely disappointing.
“This shows that the government always says that the SMME sector is a pivotal driver in economic growth, but their efforts are not being directed into this sector,” she said.
“In his entire mid-term speech there was hardly a mention of SMMEs. Instead he spoke a lot about investors instead of investing in SMMES.”
Mthethwa said that so far nothing had been done to get rid of the red tape that prevented small businesses from meaningfully participating in the economy.
Mboweni said that the government must make remove the bureaucracy that made doing business difficult and more expensive.
Mthethwa found this statement laughable.
“They’ve been singing this song for the past 26 years,” she exclaimed.
“One of the things that have been highlighted throughout the years is the fact that every service meant to focus on SMMEs is scattered, and that these services must be consolidated into a one-stop shop. But they have not done that.”
She said the government could not achieve its goals without the involvement of the sector.
“The government can’t work separately. The government needs to recognise the people that can actually assist (and) coming up with solutions in making sure that the gap between the formal and informal sector is closed.
They must also recognise the players that will make sure that the informal sector can come into the formal sector, because the challenges black businesses and SMMEs face are best understood and appreciated by those that participate proactively in these sectors,” she said.