South Africa’s entrepreneurial future looks brighter with the country’s ambitious plan to create one million startups and small, medium, and micro enterprises (SMMEs) by 2030. This initiative was front and centre at the National Presidential MSME & Cooperative Summit and Awards 2024, held at the Gallagher Convention Centre in Midrand this past week. The summit, which brought together key policymakers, industry leaders, and pioneering entrepreneurs, underscored the vital role small businesses play in South Africa’s economic recovery and growth.
At the heart of the summit was the recognition of SMMEs as the backbone of South Africa’s economy. These businesses already represent 90% of all businesses across Africa and contribute 50% to the continent’s GDP. Yet, their potential remains largely untapped, especially with South Africa’s unemployment rate standing at 32.1% in the third quarter of 2024, leaving 8 million people without jobs. Empowering small businesses to become job creators is crucial to addressing the country’s unemployment crisis.
Government’s Vision for Small Business Growth
The keynote address by Minister of Small Business Development, Stella Ndabeni-Abrahams, highlighted the urgency of fostering entrepreneurship as a cornerstone of inclusive growth. Ndabeni-Abrahams emphasised that 9 million of the 11 million jobs needed by 2030 must come from small enterprises, according to the National Development Plan (NDP).
“Small businesses must be at the centre of our economic policies if we are to achieve the inclusive growth we envision,” she stated. President Cyril Ramaphosa also echoed this sentiment, stressing the importance of micro, small, and medium enterprises (SMMEs) in shaping the country’s future economy. “They create livelihoods, provide vital services, and contribute to building a more equal and prosperous society,” Ramaphosa said.
Key Interventions to Empower Entrepreneurs
Several key interventions were outlined to address the systemic challenges faced by SMMEs. These include:
- The National Integrated Small Enterprise Development Strategic Framework, which outlines a collaborative roadmap for small business development.
- The Small Enterprise Ombudsman’s Office, set to launch in April 2025 to protect entrepreneurs from unfair trade practices.
- The Small Enterprise Development and Finance Agency, aimed at bridging funding gaps and avoiding past mistakes made by similar agencies.
Access to funding remains one of the largest hurdles for South African entrepreneurs. The International Monetary Fund (IMF) estimates a R350 billion funding gap, underscoring the urgent need for innovative financial solutions. In response, the government is working with the private sector to develop a Fund of Funds to provide critical support for startups and SMMEs.
Reducing Red Tape for Entrepreneurs
To support the growth of small businesses, the government plans to repeal outdated legislation, such as the Businesses Act, and introduce a new Business Licensing Bill. These changes aim to streamline compliance and formalise informal businesses, reducing the regulatory red tape that often hinders growth. The Department of Small Business Development (DSBD) has consistently identified regulatory burdens as one of the key challenges for entrepreneurs.
Fostering Innovation and Digital Transformation
This year’s summit coincided with Global Entrepreneurship Week 2024, which was celebrated in over 200 countries under the theme “Inclusive Growth and Innovation”. The summit’s alignment with this global event reflected the growing focus on entrepreneurship as a tool for economic empowerment, particularly among marginalised groups.
Ndabeni-Abrahams highlighted the importance of digital transformation for South African entrepreneurs, announcing commitments to provide tools and resources in native languages and ensure inclusivity in the digital economy. She also stressed the need for South Africa to lead in emerging technologies like artificial intelligence (AI), positioning the country as a key player in the global digital revolution.
Strategic Partnerships and Progress
A major takeaway from the summit was the reaffirmation of the importance of strategic partnerships. The National Integrated Small Enterprise Development (NISED) Framework requires biennial summits to track progress and ensure collective action. The summit challenged attendees to consider impactful interventions and outline actionable steps to achieve the shared goal of fostering a thriving entrepreneurial ecosystem.
In terms of inclusivity, the government is supporting spaza shops and informal traders in upgrading their infrastructure and complying with regulations. Moreover, the government is maximising opportunities offered by the African Continental Free Trade Area (AfCFTA) to open global markets for South African entrepreneurs.
A United Effort for Economic Growth
Despite the challenges, the summit showcased a united front in empowering SMMEs as engines of economic growth. Minister Ndabeni-Abrahams’ address was a rallying call for all stakeholders to work together in creating a thriving entrepreneurial ecosystem that leaves no one behind. The plan to create one million startups and SMMEs by 2030 is ambitious but achievable. With strategic interventions, strong partnerships, and a relentless focus on inclusivity, South Africa is poised to unlock the full potential of its entrepreneurial spirit, paving the way for sustainable growth and prosperity.
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