By: Anna Majavu
A new study into ocean economy SMME’s in KwaZulu-Natal has found that there are very few opportunities for small businesses wanting to break into this sector, and also a lack of financial support from the banks and the government. The study, “An Evaluation of the Factors that Impact the Sustainability of Maritime SMMES in the Kwazulu-Natal Province” [https://journals.dut.ac.za/index.php/ajims/article/view/1040/861], by the University of KwaZulu-Natal’s Bheka Zulu and Tony Ngwenya and Bonginkosi Zondi of the Mangosuthu University of Technology, researched the experiences of 12 ocean economy SMMEs in the province.
The ocean economy includes maritime transportation, commercial fishing, the aquaculture industry, the cruise, and recreational sector, sport, and marine energy sources. It found that the ocean economy’s links to steel manufacturing, skills development, the boat construction and repair business, freight and transportation, and marine tourist and recreational activities, should provide many opportunities for SMMEs to establish themselves.
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But despite the government launching Operation Phakisa in 2014 and promising to create just over one million jobs in the ocean economy by 2033, the ocean economy in South Africa “is often dominated by foreign companies” and “there are no tangible results (for SMMEs)”, the study found. Stringent laws and red tape “make it impossible to both open and run a business”. A lack of management training, no access to marketing and advertising for their businesses, and no warehouse facilities were also preventing entrepreneurs from getting ocean economy SMMEs off the ground.
“A lack of government support makes it difficult for entrepreneurs to access financial resources and is cited as one of the fundamental problems influencing the entrepreneurial leadership of most SMMEs,” said the research. There was also “inadequate financial support from money-lending institutions” to the small maritime businesses. Government programmes for ocean economy SMMEs were not properly communicated, especially to black-owned SMMEs, with the result that “their accessibility is limited to a chosen few”, a respondent said.
“It is all talk but no action… The government keeps saying there are programmes and support for us as entrepreneurs, but when you go to look for such help, you are given too many reasons why you can’t be helped by the very same institutions; it’s really demotivating and disheartening,” another participant said. South Africa is one of the 20 largest maritime nations in the world, with eight commercial ports handling over 150 million metric tons of cargo a year – over 90% of South Africa’s commerce.
“Socio-economic development simply would not be possible if it were not for ships and the maritime industry,” said the study, adding that the maritime sector “remains underdeveloped, under-resourced and fragmented”. “(These) deficiencies impede the sector’s ability to contribute meaningfully to sustainable economic development”. The SMME participants agreed that government must create maritime-related opportunities by setting up a neutral body that is “fully dedicated to entrepreneurs in the ocean economy”.
