While the South African government continues to promise support for small businesses, recent policy moves have left many entrepreneurs questioning whether those commitments are being backed by consistent action.
Two recent developments, one introduced and one abruptly withdrawn, reveal how uncertainty in policymaking is once again undermining confidence among small, medium, and micro enterprises (SMMEs).
Through the Department of Employment and Labour, Minister Nomakhosazana Meth recently gazetted a new code of practice on dismissals under the Labour Relations Act.
The code aims to make it easier for small businesses to manage underperforming employees without the complex and costly disciplinary processes required of larger companies.
According to Business Leadership South Africa (BLSA) CEO Busi Mavuso, the reform is a practical step toward improving the business environment.
“While fairness rightly remains a core principle, the burden on small businesses will now be proportional,” Mavuso said.
“It makes managing dismissals much more straightforward.”
She added that simpler labour procedures could make South Africa “a more attractive place to start a business and hire people in the first place.”
Though unions have criticised the changes, small business owners have long argued that rigid labour laws discourage job creation by making it too difficult to dismiss non-performing employees.
However, the optimism was short-lived. Just as SMMEs began to welcome the Labour Relations update, the Department of Trade, Industry and Competition (DTIC) withdrew a second, highly anticipated reform, the draft amendments to regulations under the National Credit Act.
The proposed amendments were designed to ease access to credit for small enterprises by allowing lenders to assess affordability based on a business’s potential and model, not just its past bank statements or payslips.
As Mavuso explained, “If you’re an entrepreneur with a great business idea but no employment history, no lender can legally give you a start-up loan. These amendments would have allowed financial institutions to consider the viability of your business idea a huge improvement for access to finance.”
But on 12 September, DTIC Minister Parks Tau withdrew the draft regulations, reportedly after receiving more than 20,000 negative comments. Many of which, Mavuso said, were irrelevant to the proposed changes.
Business leaders have condemned the withdrawal as a major setback for entrepreneurship and financial inclusion.
“This is an irrational way to form policy,” Mavuso said. “The minister should have reviewed the comments and made reasonable adjustments. Instead, an entire reform process that took years has been thrown out.”
The now-withdrawn regulations were meant to modernise rules that have not changed since 2013. For small businesses struggling to secure loans amid high interest rates and rising costs, the reversal has deepened frustration.
Taken together, the two developments illustrate the contradictory policy signals that small businesses often face in South Africa. While one ministry simplifies labour compliance, another halts reforms that would have made credit more accessible.
For entrepreneurs, it sends a clear message that the policy environment remains unpredictable.
“Government says they want to support us, but every time we see progress, another decision takes us backwards,” said Nokuthula Ngobeni, who owns a salon in Pretoria.
Azwi@vutivibusiness.co.za
