SMMEs play critical role in economy, says UWC chancellor Thabo Makgoba in wake of job losses and shrinking economy

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By Tarryn-Leigh Solomons Time of article published10h ago

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Cape Town – University of the Western Cape chancellor Thabo Makgoba says economically the effects of the past year have been devastating as there was a shrinkage in the economy coupled with more than 2.2 million job losses and serious downgrades by ratings agencies.

As a result, Makgoba said poverty and unemployment are now at their peak.

He was speaking during a roundtable for economic development which focused on financial support for small businesses and challenges that micro-businesses face.

“We have more people dependent on the State than we have ever had in the history of South Africa. Far too many live off grants and won’t be able to fend for themselves

“This roundtable happens at a very critical time when the country is at a crossroads. We need to work together to produce a generation of job makers as well as job takers. It is well-documented that small, medium and micro enterprises (SMMEs) are the lifeline of the South African economy,” Makgoba said.

He also emphasised it was imperative that efforts to protect SMMEs were speeded up.

He indicated the Department of Small Business Development needs to play a key role in unblocking barriers to access SMMEs, facilitating easier ways of accessing funding and being a catalyst to a national agenda which changes the way SMMEs are viewed in the country.

According to Makgoba, universities also need to transform and prepare future leaders to aim to be employers or self-employed and not just employees.

“An entrepreneurial spirit needs to be woven from primary school to varsity. It needs to be nurtured throughout the learning and educational experience. Only then can we develop the economic potential of our people, not only to cushion the worst of the impacts of the Covid-19 pandemic and the financial crisis on livelihoods, but to help ensure a swifter recovery for the broader economy,” said Makgoba.

He said that during Women’s Month attention must be given as to how women can be empowered to scale up micro-enterprises. “Women have always been the backbone of our economy.

“The question is not how adaptable they are nor is it how capable or skilled they are. They have all those qualities in abundance. The issue is how to help them overcome the obstacles they are faced with, whether cultural or institutional,” he added.

Erica Nell, a credit manager at Sanlam, noted that women were under-resourced in the sector.

She touched on direct lending and explained that a credit score, collateral and cash flow of the business is usually what lenders look at; it speaks to the balance sheet of the specific small business.

She also indicated SMMEs often face the challenge of obtaining funding to secure their business.

Joshua Wolmarans of the Western Cape Department of Economic Development and Tourism said inclusiveness in entrepreneurship is critical to any economy because if one group in society is not starting businesses on a par with other groups, this will limit job creation, innovation, income generation, the availability of new products and services, and all other benefits that businesses bring to the economy and society.

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Political Bureau

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