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What is setting small businesses in the North West back?

───   OLEBOGENG MOTSE 14:47 Wed, 24 Apr 2024

What is setting small businesses in the North West back? | News Article

“There is a concern about the growing presence of unregistered establishments run by foreign nationals in the province.”

One of the biggest hindrances in the growth of small and medium businesses in North West is the absence of a single vision, with all the stakeholders working in silos. The North West Chamber of Commerce and Industry (NWCOCI) has in a bid to counter this organised a small and medium business workshop on Wednesday (24/4) alongside the North-West University Business School in Potchefstroom.  In addition to the absence of a single vision, there is a concern about the growing presence of unregistered establishments run by foreign nationals in the province. The NWCOCI Chief Executive Officer, André Coertzen, told the OFM Business Hour the province needs to exercise greater oversight of these businesses. 

According to a 2019/2020 research study by the chamber and university, it was found that 84% of all SMMEs in the province belong to foreigners. Of this 48% was from Pakistan. Of the 15% owned by South Africans only 9% were women.  

Coertzen is of the view that municipalities should have effective and up-to-date databases of existing businesses. “The database should be updated annually and changes should be reported. This can only be done properly when the municipalities have records of all businesses within their boundaries. There seems to be this lame excuse that the bylaws are outdated, but are they then not changed or updated?” asked Coertzen.

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Amongst those in attendance at the closed workshop are representatives of the North West’s commercial banking sector, organised business, and the public sector.

The other issues on the agenda include poor service delivery, and the failure to enforce existing laws and regulations at both municipal, provincial, and national levels that deal with small businesses.

Coertzen explained whilst this is a closed session the intention is to take the solutions reached at this workshop and present them to the varied districts in the country. He anticipates these sessions will be open to the public.

The current small business landscape in South Africa is not effective, explains the chamber. It neither contributes to the Gross Domestic Product (GDP) as is expected nor does it help in the fight against unemployment.

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According to Coertzen, the World Bank estimates that small and medium businesses account for 90% of all businesses worldwide and 50% of employment. Formal small and medium businesses contribute up to 40% of GDP in emerging markets (with that figure climbing considerably if you factor in the informal economy) and provide 70% of employment.

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