THE IMPORTANCE AND POTENTIAL OF SME’S TO THE ECONOMY OF THE WESTERN CAPE

Eugene Von Brandis MPP

DA Western Cape Spokesperson on Economic Development, Tourism and Public Works in the Western Cape Parliament

Today, 5 September 2012, the Standing Committee on Finance and Economic Development were briefed by the South African Small and Medium Enterprise Federation (SASMEF) as well as by the Department of Economic Development and Tourism, at the Western Cape Legislature. As DA spokesperson on Finance and Economic Development I support the work SASMEF are doing in the Small Micro and Medium Enterprise (SMME) sector, and laud them for their commitment shown to the sector. I value their presentation and it seems to have found positive resonance amongst the rest of the committee as well.

Job creation remains one of the major challenges faced by South Africa, the lack thereof are felt throughout all other spheres of society. According to statistics from the Western Cape Department of Economic Development and Tourism, 24% of South Africa’s population are unemployed and the Western Cape fares slightly better with an unemployment rate of 21.9%. By broad definition, the unemployment figure jumps to 30% nationally. More alarming, are the constant reminder that the majority of people who are unemployed, are amongst the youth (nearly 72% according to the Cape Argus, 8 June 2012: “Youth Jobless rate soaring”).

SASMEF identifies the contribution SMME’s can have to the GDP and job creation, as well as their indirect contribution in distributing wealth and expanding the tax base. A recent Cape Times opinion piece by Stephen Timm, “The search for entrepreneurial spirit” (3 September 2012), highlights the need for, and growth of, SMME’s considering that “firms with fewer than 50 employees employ 73 percent of all employees”, “yet only 33 percent of all businesses in South Africa employ anyone at all other than the owner-operator”. Expanding our SMME base is therefore as important as ensuring expansion and sustainability of the existing SMME’s.

The Western Cape Department of Economic Development and Tourism realises that we are faced with a low entrepreneurial culture and innovation; coupled with a lack of awareness of procurement opportunities and successfully accessing such opportunities, especially by women, youth and persons living with disabilities. I encourage everyone to make use of the various methods of accessing information and opportunities. Most notably, the provincial tender website (http://www.westerncape.gov.za/tenders) and the business support helpline, focused around the Red Tape Call Centre (0861 888 126) are readily and easily accessible.

As DA spokesperson on Finance and Economic Development I want to thank SASMEF for their positive engagement with government – as a member of the Western Cape Economic Development Partnership – and their interest and commitment to the SMME sector. I also thank the Western Cape Department of Economic Development and Tourism for their continued support towards our province’s SMME’s and encourages the department to actively engage with likeminded stakeholders who want to work towards job creation in our province.

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