According to a study from the International Finance Corporation, small, medium and micro-sized enterprises (SMMEs) account for more than half of all formal jobs worldwide. With this in mind KwaZulu-Natal (KZN), South Africa’s second most populous province hosted its 4th KZN Economic Council Roundtable. Discussions that dominated the order of the day included policies and regulations, the role played by both the government and private sector, current trends and the over-all current SMME landscape in the province.
At the roundtable, it was heard that big economies are sustained by a vibrant SMME sector. Furthermore, a number of countries depend on small business for economic growth. In KZN, cooperatives are engaged to join big-businesses to continue to grow.
The province’s MEC for Economic Development, Tourism & Environmental Affairs, Sihle Zikalala adds that the current landscape in KZN is showing substantial progress.
Zikalala further says in KZN, 19% of people are employed in the informal economy and of this figure, 48% are women and 90% are black.
The imbalance, Zikalala adds, is because of the country’s historical background. “SMMEs and cooperatives are the first step towards integration of the mainstream economy.”
An inclusive economic environment where cooperatives can be provided with a gentle entry into the mainstream economy is being highly encouraged, throughout the province.
Among the panellists was also a representative from civil society, Sthembiso Madlala. She reckons KZN is a progressive province regarding policy and strategy among other aspects.
“KZN is the only province that has the informal economy policy ahead in the game. However, where we are lacking is in implementation of those policies,” he says.
“I am not a fan of cooperatives, because I think it is an off-shelf model taken from Europe or USA and introduced as if the local should embrace it without considering all the technical dimensions,” says the thought leader on the panel, Anton Krone.
Krone is also the Executive Director of an NGO called SaveAct. He explains it developed a stokvel model in 2008 which since then now sees R1 billion in capital.
“We have about 55 000 members and members get an average of 31% returns on their savings in their groups though group lending,” he says.
MEC Zikalala went on to say government must not neglect the idea that business and workers can work together and gave light to their programme called “Set-Aside”, which will see, from the provincial procurement, 30% for women, 35% for the youth, 5% for the disabled and 10% for veterans set aside.
The KZN Economic Council debate was both robust and informative. It highlighted the vital role the informal economy sector plays in advancing equitable and inclusive economic growth in KZN, and over-all the country.