Less red tape for small business

26 May 2006

The government is to set up a special unit to help cut through the red tape blocking the growth of South Africa’s small business sector, says Deputy President Phumzile Mlambo-Ngcuka.

She was responding to a question in the National Council of Provinces in Cape Town on Tuesday on how regulations governing small businesses were effecting the Accelerated and Shared Growth Initiative for South Africa (Asgi-SA).

Special unit
“We’ve undertaken a review of some of our regulations that impact on small business, so, yes, we’ve identified those regulations that hamper small business development,” Mlambo-Ngcuka said.

The Deputy President said that as some regulations were removed, new ones were introduced, and the situation needed to be monitored to ensure an optimal environment for a sector identified as key to Asgi-SA’s target of 6% economic growth.

A unit would be set up in the presidency to conduct this monitoring, she said.

Removing obstacles
The Cabinet had already adopted a plan “to remove unnecessary regulatory obstacles that make the work of SMMEs either cumbersome or expensive,” Mlambo-Ngcuka said, adding that these included tax burdens.

“Poorly designed or implemented” labour regulations had also been identified, along with the need to focus on electronic business administration and communications to facilitate cheaper, more efficient practices.

Obstacles in the municipal legal environment, such as “the many bylaws that we find in our municipalities that make it difficult for small business to trade,” were also receiving attention, the Deputy President said.

Interventions already identified, she said, included the acceleration of the Apex and Mafisa programmes to provide microfinance for start-up businesses – a sector often neglected by the mainstream banking sector.

Another intervention was a new product on offer from the Khula development agency for entrepreneurs looking for loans of between R10 000 and R250 000.

The National Chamber of Commerce (Nafcoc) is being supported by the presidency in another initiative that aims to create 100 000 new SMMEs (small, medium and micro enterprises) every year.

SouthAfrica.info reporter and BuaNews

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