Driving economic growth: Government’s commitment to MSMEs

SPONSORED: The Economic Reconstruction and Recovery Plan (ERRP) is here to empower MSMEs with the support and resources they need to flourish

The South African government is dedicated to uplifting micro, small, and medium enterprises (MSMEs) as a cornerstone of economic recovery and growth. With a focus on inclusivity and sustainability, the Economic Reconstruction and Recovery Plan (ERRP) introduces a suite of programs tailored to empower small businesses and co-operatives across the country.

In an exclusive interview with SAnews, Government Communication and Information System (GCIS) Acting Director-General (Acting DG), Nomonde Mnukwa, emphasised the deliberate steps the government has taken to foster the development of MSMEs, and the wide range of programs and initiatives aimed at empowering small businesses, co-operatives and informal enterprises.

She highlighted that the government’s support for small businesses is rooted in their significant contribution to the economy and the livelihoods of citizens. 

The National Development Plan places the responsibility of creating 90% of new jobs in the workforce in South Africa on the MSMEs.

“Government is very deliberate about providing targeted support to small businesses, including co-operatives, micro-enterprises, and informal businesses because we know that they are a major source of employment and a key contributor to inclusive growth”.

“MSMEs not only help put food on the table for many households but, when they grow, they also create jobs, helping to reduce unemployment,” she explained. 

Recognising the success of many economies around the world that thrive on robust MSME sectors, Mnukwa said the government has taken a similar approach by establishing a dedicated Department of Small Business Development.

She added that the government’s commitment extends beyond national programs, with provincial and municipal structures playing a key role in ensuring that MSMEs receive the necessary support to incubate growth and sustain themselves. 

“Provincial departments bridge a gap by assisting MSMEs in areas not reached by national programs. Additionally, local municipalities have established Local Economic Development units to offer financial aid and guidance at a community level. 

“The three spheres of government work together to ensure comprehensive coverage, extending their reach to support as many small businesses as possible across the country,” she said.

The government’s MSMEs strategy, the National Integrated Small Enterprise Development Framework (NISED), is also designed to address inequalities. The 6th Parliament also passed the National Small Enterprise Amendment Bill which was signed into law by the President to advocate for the interests of small enterprises.

“There are special programs specifically aimed at previously disadvantaged groups, as well as businesses operating in rural or township areas, to tackle both unemployment and inequality,” she said.

Financial and non-financial support

Mnukwa highlighted key funding mechanisms available to MSMEs through the Department of Small Business Development. 

“The Department of Small Business Development, along with its merged entities – the Small Enterprise Development Agency and the Small Enterprise Finance Agency, now known as the Small Enterprise Development Finance Agency – now offers a single point of access for both financial and non-financial support, simplifying the process for entrepreneurs.” 

The non-financial support includes capacity building, training, and assistance with business plans.

Financial support is provided through various funding models, including grants, blended finance (a mix of grants and loans), and low-interest loans with favourable rates compared to ordinary banks. 

In addition to these broad initiatives, there are sector-specific programs, such as the Small Enterprise and Manufacturing Program, which funds working capital and equipment for manufacturing enterprises, and the Spaza-Shop Support Programme targeted at township and rural entrepreneurs who own spaza shops, general dealers or grocery stores.

There is also the Amavulandlela Funding Scheme grant which offers an opportunity for South Africans with disabilities to enter the mainstream economy and build qualifying entrepreneurial enterprises. The grant provides credit facilities that range from a minimum of R50 000 to a maximum of R15 million.

“Each of these programs has different qualifying criteria, so it’s essential for applicants to check the specific requirements. However, at the informal level, such as in informal settlements, there are fewer requirements. Entrepreneurs don’t need to be registered with SARS [South African Revenue Service] or have a business bank account: if they have a valid ID, a personal bank account, and a trading certificate from the municipality, they can qualify. 

“This is based on the recognition that many of us were raised by mothers who supported us by selling vegetables or ‘amagwinya’ [vetkoek] on the streets, contributing significantly to the economy,” Mnukwa said.

Youth and women empowerment 

The Acting DG also stressed the importance of empowering the youth and women within the MSME space. 

The National Youth Development Agency – located in the Presidency – plays a pivotal role in supporting young entrepreneurs by offering both financial support and training to equip them with the skills to manage their businesses effectively.

In addition, the SheTrades program provides vital support to women-owned businesses, enabling them to access both domestic and international markets. The program assists women entrepreneurs with certifications, product listings at major retailers like Clicks, Dis-Chem, and Pick n Pay, and opens doors to new trading opportunities.

Agricultural and rural enterprise support

Mnukwa highlighted the work being done in collaboration with the Department of Agriculture, Land Reform, and Rural Development to support smallholder farmers and rural enterprises. 

These efforts provide farmers with equipment, training, and market linkages, contributing to the broader goal of building an inclusive economy. She added that the government’s large-scale land restitution and redistribution program is also making headway, with 24% of South Africa’s farmland now owned by black farmers.

The comprehensive support for small businesses, Mnukwa emphasised, is not limited to financial aid but includes extensive training, mentorship, and market access initiatives. “The government is deliberate in ensuring that small businesses, especially those from disadvantaged communities, have access to the tools they need to grow and succeed,” she said.

There is also the National Rural Youth Service Corps programme which targets unemployed rural youth aged between 18 and 25 in possession of Grade 12 as part of the rural economy transformation strategy.

“The programme develops the skills of targeted participants through various skills development initiatives in partnership with other public and private sector institutions.

“It exposes participants to different skills fields which focus on instilling a culture of discipline, patriotism, community service as well as technical and vocational skills that equip participants with skills in construction, agriculture, household profiling, welding and records management amongst others,” she said. 

Through these varied programs and a strong focus on inclusivity, Mnukwa said the government aims to ensure that MSMEs continue to drive South Africa’s economic growth and create jobs, helping to reduce unemployment and address long-standing inequalities. – SAnews.gov.za

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SPONSORED: The South African government is prioritising support for micro, small, and medium enterprises (MSMEs) through the Economic Reconstruction and Recovery Plan (ERRP). Here’s how they’re driving economic growth: #Government #MSMEs #ERRP #SmallBusinessOwners