Small business has a new supporter in the shape of SA President Thabo Mbeki. With many small businesses finding it extremely challenging to create and sustain a profitable existence and most larger organisations turning a short sighted blind eye President Mbeki has demanded swift and proactive change.

With many governments around the world realizing that supporting small businesses is a sure fire way of boosting their economies and eradicating unemployment problems, the SA President is demanding that big business starts to invest in the country who is filling their pockets.

Does this mean we will now start seeing banks re-think their bullying tactics? Does it mean that SMMEs will now become an option for providing products and services to larger business? I have always said that action speaks louder than words and in this case action will be most welcome.

Ben

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Karima Brown reports

PRESIDENT Thabo Mbeki chastised business leaders in Johannesburg at the weekend during a high-powered presidential imbizo in Gauteng, demanding they shape up and "provide leadership" if the problems facing small, medium, and micro enterprises were to be properly addressed.

Mbeki, flanked by a bevy of senior cabinet ministers and provincial politicians including Gauteng premier Mbazima Shilowa and Johannesburg mayor Amos Masondo, criticised business leaders for not displaying the "type of leadership" required to address challenges raised by individual business owners.

"You are called stakeholders because of the positions that you occupy," Mbeki said. "I get worried because I will be in Soweto and I know pretty well what people there will say about jobs, and one would expect that," he said.

The president was responding to complaints from big business regarding the high cost of telephony, transport and the skills shortage. Black business leaders told Mbeki they were experiencing serious problems including access to finance, training facilities and difficulties with government departments who paid late, causing severe cash-flow problems for small contractors.

Other concerns raised by business with the president included the cost of doing business in Johannesburg, the shortage and high cost of skilled staff, poor government service delivery -- primarily due to a lack of capacity -- physical infrastructure, poor delivery and support for small businesses, and the perception on the part of small and micro business who feel that broad-based black economic empowerment is too narrow.

Mbeki told the business community they "lacked leadership" from organised business to adequately address their issues. "Nafcoc has to be actively involved in solving these problems, but are they? One gets the sense that they don't exist. There is not this port of call called organised business," Mbeki said.

Joburg Business Forum member Mike Schussler said while business was "willing to work" with government, it faced serious challenges. "Many feel that telecommunications costs are too high as well as the cost of exporting and importing. The high cost of security, particularly for small and medium business, is a big strain," Schussler said.

Excessive government regulation as it related to tax and labour compliance also compounded matters for SMMEs. Small business had also been excluded from training levies, and therefore could not access the Seta system, resulting in business not being able to train artisans, he said.

Schussler proposed a set of short- and long-term solutions, which included better traffic management, that the government make it easier to import scarce skills, allow more broadband players so as to lower telecommunication costs, and allow extra empowerment credits for small business for implementing black economic empowerment.

In the longer term, government should get Seta funds to work and allow business "more of a say" in what skills it needed. He also suggested promoting a second airport, as well as better communication between business and the government.

During the weekend imbizo, Mbeki visited residents of Soweto and the inner city in Hillbrow, and visited the Gautrain construction site at Park Station and Orlando Stadium in Soweto.

The development and expansion of SMMEs is a central feature of the government's economic growth plan, Asgi-SA. The government has also identified the second economy as a key vehicle to create jobs and alleviating poverty. Gauteng is the economic powerhouse of SA and Johannesburg is seen as the financial capital of Africa.

According to the Joburg Business Forum, the city grew at 4,7% over the past decade while SA as a whole averaged 3,2%. Moreover, Johannesburg grew 47% faster than the South African economy as a whole. "Based on this historical relationship, the Joburg Business Forum concluded that the city needed to achieve a growth of at least 9% for SA to grow at 6%,"said Schussler.

Source: Business Day