Financial Mail: BERNARD SWANEPOEL: Oh so now you care about small business?

For years, politicians have simply ignored small business. As the Covid-19 pandemic spurs them into action, let’s hope it’s not too late

As worrying as Covid-19 seems to everyone right now, SA will get through to the other side. We’ll be a changed society of course, but with a determined effort from all of us, we can limit the spread of this disease and then turn our attention to fixing the economic fallout.

One of the first orders of business when parliament is back in session should be to initiate a motion to hold the executive branch of government in contempt.

Here is why I say this. Over the past two weeks, South Africans have at last noticed that the small businesses operating around them, in every sector of the economy, are particularly vulnerable.

Each morning brings a fresh op-ed in some newspaper or other, some minister’s statement or a tweetstorm accompanied by hand-wringing and chest-beating about the particular effect Covid-19 will have on the survival rate of small companies, which make up the majority of our economy.

Big businesses are moving (though at a glacial pace) to try to offer some palliative care for smaller businesses now, and presumably there will be some sort of financial assistance forthcoming from the government once we’re able to sift through the full details announced by President Cyril Ramaphosa this week.

But had the executive acted when it was empowered by parliament to do so, 24 years ago, we might have constructed a strong and thriving small business segment rather than one that now seems unlikely to weather the coming economic bedlam.

Back in 1996, there were just two short sentences in section 18 of the National Small Business Act, which gave four trade & industry ministers and two small business development ministers the ability to gazette guidelines to review and assess the “effect and application of legislation on small business”.

None of them did so.

So in theory, we would have had the firepower to help small businesses if they suffered the sort of negative consequences we’re now seeing from Covid-19. Politicians could have used national, provincial and municipal laws as well as various policies and regulations already on the books to help, and they could have passed new laws too. But they didn’t do any such thing.

Overseas, dozens of regimes adopted the “think small first” campaign and used it to good effect. SA, in stark contrast, sits with very dusty legislation which was never promulgated, despite the wishes of parliament.

So, in this context, it’s only right to ask whether we were ever really serious about supporting small businesses in the first place. While politicians pay lip service to creating an “enabling environment”, this never really happened. And we’ve seen this apathy manifested in most metrics on any ease of doing business, global competitiveness or innovation index.

Instead, SA’s small businesses gaze up at Everests of red tape. They are paid for their goods and services criminally late, and enjoy little real “enterprise development” from their big customers.

Had section 18 of the National Small Business Act been properly implemented, it would have allowed companies to grow and employ thousands if not millions more people. This workforce might then have been able to build up savings accounts to draw on in the event of a crisis like the one we’re facing now. They would also have been able to pay tax, to make the entire country more economically immune to rare but devastating events.

Of course, there is much all of us can do in the coming months to help small companies and keep our economy going. But as soon as we are once again properly open for business, the government needs to get serious about inoculating the country against future pandemic-style shocks to the job-creating segment of our economy. Otherwise, we’ll be right back here again when the next crisis hits.

  • Swanepoel is the executive director of the Small Business Institute

by Financial Mail –

Bernard Swanepoel