It has become a familiar mantra of government leaders when talking about our elusive economic recovery – small businesses are our best shot at creating jobs and helping our country get back on the mend, we are often told.
At a media briefing in February, President Cyril Ramaphosa said SMEs in developed economies made up 90% of the formal economy and therefore our government needed to help them develop.
He is right.
The problem is that what is said by those who have power to effect change is often at odds with the reality of, in particular, black business owners in the country.
This week the Black Business Council (BBC) held its summit on the back of the latest employment figures, which show that up to 32.6% of SA adults are unemployed.
So far the summit has pointed to two troubling realities.
The first, as pointed out by BBC president Sandile Zungu, is that an overwhelming majority of people are excluded from the formal economy.
“The commanding heights of the economy – banks and mines – are still in minority white hands. Black South Africans have only been accommodated to not more than 30% at best. We need a plan to transfer at least 70% ownership and management of the economy into black hands by 2030,” Zungu said.
The second is that those who are striving to build businesses often face impossible structural limitations that keep them from developing.
Small business owners who spoke to us from the summit told of similar stories, either of no access to adequate funding or other limitations that render them unable to compete with more established entities.
Our public purse cannot possibly fund all businesses seeking help to trade, but we believe the government has to be more intentional, both in policy formulation and practice, to unlock opportunities for small businesses.
While we are mindful of the potential dangers of excessive state intervention in the economy, we believe that there must be a greater effort to compel reform.
The current crisis of joblessness and inequality is arguably the biggest threat to our national stability, let alone strategic development and future security.
It is precisely for this reason that we need bold and decisive interventions aimed at creating a conducive environment for small businesses to thrive.
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