By: Anna Majavu
Government must use Women’s Month in August to put in place new systems for SMMEs to access land, according to development economist Phelisa Nkomo. A lack of land and infrastructure was a “protracted challenge” for small and micro enterprises, and it undermined the resilience of SMMEs when they were forced to spend their scarce resources on rent, said Nkomo.
She told Vutivi News that SMMEs could absorb external shocks because they do not have a lot of overheads and operational costs, however, running a thriving business from the backyard of their homes was difficult. “Rural enterprises struggle even more than urban SMMEs because they don’t have collateral to present to the banks when they need finance. They rely on communal land and their houses to run their businesses, and on their families for help. Lots of rural enterprises rely on remittances from overseas family members or relatives who are located in other provinces,” said Nkomo.
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Because they have insufficient land to grow food on, “even though rural SMMEs show signs of resilience, they often rely on wholesale markets where they buy food and then sell it back within the same markets targeted by the wholesaler”. “There are very few SMMEs from rural communities who have really been able to find a niche. If they have access to land, they can grow food and present it in the market – those are the SMMEs that grow over time,” Nkomo said.
The government was missing many opportunities to strengthen agricultural SMMEs. They should be supporting villages to start milling plants to start producing their own mealie meal. They should encourage food markets,” said Nkomo, citing the many areas along busy highways across the country where micro-enterprise owners sell fresh produce, sometimes for up to 15 years. She said if local governments built proper food market infrastructure with shelters and ablution facilities in these busy areas, these same micro-enterprises would be part of flourishing food markets.
“What it fundamentally means is in South Africa, the area of economic policy is clearly influenced by patriarchy. Some women-owned businesses are selling maize, amasi and chicken on the side of the road. Nearly 30 years into the democratic dispensation, the government should know what the best support for them is,” Nkomo added. She suggested that every municipality collected data on the SMMEs in their areas, build and allocated each enterprise the infrastructure they needed to trade from, and then “provide each with a grant to relieve them from financial pressure”.
“The reason why many women-owned SMMEs remain vulnerable is because they remain in primary production where they are always going to struggle to grow their business,” said Nkomo. She finds it unbelievable that women can sell tomatoes for 20 years, but never receive any support to make a tomato product like paste or sauce, which would move their business up in the value chain. The Department of Trade, Industry and Competition must start helping SMMEs take advantage of the value chain associated with their businesses, Nkomo concluded.
