Small Business Development Minister Stella Ndabeni has expressed support for the economic transformation initiatives recently announced by the President to build an inclusive economy that creates opportunities for the historically marginalised and generates new jobs.
During last week’s State of the Nation Address (SONA), President Cyril Ramaphosa said South Africa must lift economic growth to above 3% and create a thriving economy that benefits all.
“There is no way we can achieve the national consensus with an economy that excludes the majority. The social contract that we want to craft should contribute towards reconstructing our economy to achieve more growth, jobs and inclusion. This is more urgent for communities in the township and rural areas, especially youth and women,” Ndabeni said on Tuesday in Parliament.
Addressing the SONA Debate, the Minister said the national democratic society that government envisions must be founded on a dynamic and inclusive economy that reflects the country’s natural endowments and the innovation of its people.
“To ensure increased access to funding, the President has announced the innovation fund and transformation fund worth R20 billion per year over the next five years. These funds will act as a catalyst to attract other funds and disburse more funding and support to Micro, Small, and Medium Enterprises (MSMEs),” the Minister said in Parliament on Tuesday.
Government will set up a transformation fund worth R20 billion a year over the next five years to fund black-owned and small business enterprises.
“For us, land redistribution is a fundamental pillar of this transformation. Sustainable land reform must be supported by policies that equip small-scale and emerging farmers with the resources and skills needed for success,” she said.
She said economic transformation also requires a competitive and efficient market, free from the monopolistic constraints of colonial capitalism.
“For these goals to be achieved, the State must play a strategic role, including through directing resources towards boosting the township and rural economies. It is in line with this argument that we support the signed Land Expropriation Act and the transformation fund,” the Minister said.
The Act allows for the State to expropriate land in the public interest – subject to just and equitable compensation.
With government placing MSMEs at the centre of economic growth, the Minister said South Africa is drawing valuable lessons from the experiences of other developing countries across the world.
“We welcome the announcement that over the next three years, this administration will spend R940 billion on infrastructure projects. We eagerly await the finalisation of the regulations under the Public Procurement Act that will drive transformation, foster the emergence of new players in the economy, and enable participation of small enterprises,” the Minister said.
The regulations of the Public Procurement Act seek to ensure businesses owned by women, youth and persons with disabilities receive equitable opportunities in government contracts.
“As a department, we have a range of instruments to provide wholesale finance, direct loans, blended finance, working capital and grants to various categories of MSMEs s and co-operatives.
“Some of these we offer in partnership with financial institutions like banks, where our credit guarantee and supplier guarantee products are working well, leveraging R6.25 in financing for every rand we guarantee,” Ndabeni said.
She noted that government’s efforts in digitalising systems at the Small Enterprise Development and Finance Agency (SEDFA) will accelerate turnaround times and improve accountability to applicants.
The Township and Rural Enterprise Programme (TREP) applications will now be processed within seven days and the purchase order financing in four days.
“Through small enterprise eco-system, we have agreed on a stretch target of creating one million new MSMEs by 2030 and this will give us 3.7 million jobs, at current averages.
“We are currently undertaking industry engagements across various sectors to better understand trade and market demand pathways.
“Accordingly, we have engaged the automotive, wine and fishing industries – while in the coming weeks we will be extending these engagements to the agricultural sector, build industry, energy, petroleum and oil industry, sport and arts industries among others. We have accordingly looked at skills gaps within MSMEs and to this end we will be engaging Deans of Commerce across the country to ensure that their curriculum respond effectively,” the Minister said.
The Minister’s department is also engaging traditional leadership and organised business associations.
“We are exploring ways in which to make people in Township and Village economies true owners and drivers of this R 300 billion economy,” she said. – SAnews.gov.za
Watch a Economic transformation key to fostering inclusivity related video:
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