Zandile Majavu
As SMMEs close off 2023, many are uncertain about what the year ahead holds for them. The sector has dealt many heavy blows brought on by load-shedding, interest hikes and futile legislative changes.
Ubuntunomics owner and sustainability practitioner Sibusiso Nyathi notes that the sector has especially been hit hard by the logistics and electricity crisis.
“With year-on-year real GDP growth shrinking 0.7%… basically, trading conditions have nullified all legislative positives and efforts to improve access to finance,” Nyathi told Vutivi News.
The year started off with promising declarations concerning closing the financing gap with a R15 billion bounce-back loan scheme administered by banks. There were also reassurances from government that it would establish the R10 billion SA SME Fund of which R7.5 billion would come from the private sector. But consecutive quarters of interest rate increases had hit the sector the hardest, Nyathi said.
He also bemoaned the recent estimates from Stats SA that over 1,300 businesses closed this year due to liquidation because small businesses were most likely to be among them.
Meanwhile, independent political activist Dale McKinley pointed out the positive side of the unveiling of the Department of Small Business Development’s Draft South African Small, Medium and Micro Enterprises and Co-operatives Funding Policy in April this year. It begins to address some of the bottlenecks and issues around access to funding and skills development, which have remained key concerns regarding SMMEs.
“While the policy is a good one in the sense of saying all the right things, of course the proof is in the doing and this has been the problem with the government and the SMME sector. There has been a lot of policies and promises but doing little in the form of implementation of following through with those,” McKinley told Vutivi News.
Rhodes University Business School director Prof. Owen Skae believes that load-shedding had been detrimental to the sector this year.
“The disruptive effects and risks associated with this have placed an intolerable burden that is hard to counter. (They are) coupled with high interest rates which have made the cost of borrowing unaffordable for small businesses,” Skae said.
He advised small businesses to consider investing in small renewable energy options.
Khayelitsha Business Forum chairperson Mzoxolo Kutta also lamented how small businesses had to bear the brunt of Eskom’s crisis and contend with rolling blackouts.
“That energy crisis has closed our businesses. People could not do business because they cannot afford a generator, diesel or petrol to run the shops such as shisanyamas, shebeens and bottle stores. That is the biggest problem that we had small businesses,” Kutta told Vutivi News.
SMMEs can expect another bumpy ride next year, with economic conditions and the power crisis unlikely to change anytime soon.
