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Policy Papers and Research

Trialogue research found that approximately 5% of CSI spend in 2020 went towards entrepreneur and small business support (down from 6% in 2019). The Department of Small Business Development (DSBD) received R2.3 billion in 2019/20, an increase of 53% from R1.5 billion in 2018/19. Of the 2019/20 budget, R1.1 billion was reallocated to the Covid-19 Emergency Fund to support small enterprises affected by the pandemic, protect jobs, and sustain some small enterprises.

On 15 October 2020, President Cyril Ramaphosa presented the South African Economic Reconstruction and Recovery Plan to Parliament. The plan includes a focused support programme for small, medium and micro enterprise participation in the manufacturing value chain, with at least 40% of procurement spend directed at women-empowered companies.

The following policy papers and research provide some insight into the policy framework surrounding small businesses and entrepreneurship in South Africa.

Relevant Acts and Policies

  • National Small Business Amendment Act 29 of 2004

    The Department of Trade and Industry classifies enterprise size according to annual turnover, in terms of this Act, which amends the National Small Business Act of 1996. Small businesses encompass a number enterprises, from formally registered to informal and non-VAT registered organisations. https://www.gov.za/documents/national-small-business-amendment-act

  • Major new laws planned for small businesses in South Africa

    The National Small Enterprise Amendment Bill of 2020 has been gazetted and is set to further regulate the country’s SMME sector. A key introduction will be a Small Enterprise Ombud Service to help enforce SMME contracts and resolve business-to-business disputes, among other things. https://businesstech.co.za/news/business/456514/major-new-laws-planned-for-small-businesses-in-south-africa/

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South African Research

  • Taking responsibility for entrepreneurship development in South Africa: The role of local municipalities

    This 2020 research article argues that local municipalities should play a key role in developing and uplifting entrepreneurs in their areas of jurisdiction, with lessons drawn from both developing and developed nations. https://journals.sagepub.com/doi/abs/10.1177/0269094220922820

  • The SA SMME Covid-19 Impact Report

    South Africa lost a decade’s worth of jobs in less than half a year of lockdown and the economy slowed by 16.4% in the second quarter of 2020, compared with the first quarter. This November 2020 report indicates that 42.7% of small businesses closed due to the Covid-19 pandemic and lockdown. https://www.finfind.co.za/pdf/SA%20SMME%20COVID-19%20Impact%20Report.pdf

  • National strategy needed for entrepreneurs in SA

    A 2019/2020 report released by the University of Stellenbosch Business School, the Global Entrepreneurship Monitor and the Small Enterprise Development Agency contends that South Africa’s entrepreneurial ecosystem needs an overhaul, particularly in the wake of the Covid-19 pandemic. https://gadget.co.za/national-strategy-needed-for-entrepreneurs-in-sa/

  • RE:START 2020 report identifies trends to shape the recovery of small businesses in South Africa

    Xero South Africa presents its State of Small Business Research for 2020, indicating that SMEs surveyed are most concerned with challenges like lack of government support (32%), load-shedding (32%) and political uncertainty (16%), which have been amplified during the Covid-19 pandemic. https://www.xero.com/za/small-business/?escape=true

  • Small Enterprise Development Agency’s 2020/21 Annual Performance Plan

    In June 2020, the Small Enterprise Development Agency altered its vision to more closely align with the District Development Model adopted by government to deliver services to small business enterprise development. It presented its five-year Strategic Plan (2020-25) and its 2020/21 Annual performance Plan and budget. https://pmg.org.za/committee-meeting/30406/

  • 2016/2017 Annual Review Small Business and Cooperatives in South Africa

    This report from the Department of Small Business Development, released in December 2019, is the second such annual review since the proclamation of the Department in 2014. It presents a statistical overview of SMMEs and their owners in South Africa, and provides insights into how government drives SMME development, among other things. https://www.smallbusinessinstitute.co.za/wp-content/uploads/2019/12/DSBDAnnual-Review-of-Small-Businesses-and-Cooperatives-compressed.pdf

  • Sustainable Livelihoods of Township Small, Medium and Micro Enterprises towards Growth and Development

    This 2020 paper discussed ICT adoption by township SMMEs to help them to become more sustainable. https://www.mdpi.com/2071-1050/12/8/3149

  • The impact of financial support on the success of small, medium and micro enterprises in the Eastern Cape province

    This 2018 research paper, which analysed 350 active SMMEs registered in the formal sector and conducting business activities in the Eastern Cape, contends that the public and private sectors lack an understanding of the needs of SMMEs, and recommends that programmes developed for SMMEs must be demand-driven to avoid a mismatch between SMME expectations and support provided. https://actacommercii.co.za/index.php/acta/article/view/591/948

International Research