As the new year gets underway, Osidon CEO Hennie Ferreira reflects on what the new year holds for entrepreneurs and small businesses in South Africa.


What can we expect of the South African economy in 2020?

The country is not experiencing any major breakthroughs yet. The conversations seem to be going in the right direction but we haven’t seen any action yet. However, for small businesses in South Africa, the opportunities outweigh the doom and gloom. In difficult economic situations, there are problems, and entrepreneurs are built to solve problems. Local entrepreneurs have to identify problems the country faces and challenge themselves to find solutions and build businesses. I firmly believe South Africa remains a country where SMEs can flourish.

A huge opportunity this year will come out of South Africa taking over the rotational chair of the African Union (AU). Through the AU’s establishment of the continental free trade area, intra-African trade will be boosted, offering local businesses opportunities to expand to the rest of the continent. As one of the most advanced economies in Africa, South Africa has a competitive advantage to grab business opportunities on the continent.


What are the biggest challenges small businesses and entrepreneurs face this year?

Eskom’s load shedding remains a huge problem and it affects everyone. Its ripple effect can be felt in all industries and all businesses reliant on electricity. Unfortunately, it doesn’t seem there is an immediate solution for load shedding.

Furthermore, economic pressures in the country will remain a challenge for entrepreneurs and small business owners.


How can small businesses and entrepreneurs overcome these challenges and be successful in 2020?

As I said, challenges offer opportunities. Entrepreneurs look at problems, find solutions and build businesses out of those solutions. South Africa remains an environment of opportunity and offers a space for entrepreneurs to flourish. In fact, many foreign entrepreneurs are doing business in South Africa because of the abundant opportunities. Entrepreneurs and business owners have to change their mindset and search for problems to solve.


Are you positive about the economic outlook for this year?

I wouldn’t say the outlook for this year is the most positive. There has definitely been a turning point in South Africa, but it will take a while to implement. There are tough decisions to be made by our country’s leadership. There is a definitely awareness and drive to solve the problems facing the South African economy. Government has admitted there are problems and that is the first step to addressing our challenges. However, it won’t happen overnight.


A very positive outlook for this year, I think, is that there is a larger gap for the private sector to play a bigger role in the South African economy. The government doesn’t have a choice but to look at privatisation and offer smaller businesses the opportunities to solve problems. The public sector has reached a point where it cannot service all the country’s needs and I think 2020 will be the year in which the private sector can play a much bigger role in the South African economy.


How can government support the small business industry in a new decade?

Government should focus on deregulation for businesses up to a turnover of R50 million. Red tape has to be removed and it has to be easier to become compliant. The biggest obstacle for small businesses in South Africa is labour legislation and the labour environment. We need a free market system instead of overregulation and too many rules.

That being said, I don’t think the change needed for SMEs will come from government. I think it will come from SMEs themselves. Government can provide support but success will come from entrepreneurs, SMEs and the private sector. This is the year for SMEs to shake things up.