The Direct Selling Association (DSA) of South Africa welcomes President Cyril Ramaphosa’s recent commitment to economic revival over the coming year, especially in light of government’s focus on the small and medium business sector.
During his recent State of the Nation Address, Ramaphosa acknowledged that the Small, Medium and Micro Enterprises (SMME) sector is the biggest driver of jobs and promised to create the conditions in which this sector can thrive.
“We are very pleased to hear President Ramaphosa committing to cutting the red tape for businesses and recognising that there are too many costly and complicated regulations that impact the establishment of businesses and the creation of jobs,” says DSA Chairperson Rajesh Parshotam.
“The President is indeed correct in his assessment that SMMEs create the most jobs and most opportunities for the poor. While he is right in saying that government does not create jobs, we welcome his commitment to create an environment that will foster job creation in the private sector.”
Reducing the regulatory burden
Parshotam says the DSA strongly supports Ramaphosa’s proposed review of the Business Act – alongside a broader review of legislation that impacts SMMEs – to reduce the regulatory burden on informal businesses. This as the current environment is unduly complicated, costly and too onerous to comply with.
“We have recently engaged with various government departments and state entities in order to raise awareness around direct selling and the potential that this sector has to enable South Africans to earn a decent living,” notes Parshotam.
Direct selling is gaining a considerable amount of traction in South Africa, with the DSA recently reporting that individual resellers in the country currently number 870 382, collectively earning R2.1 billion a year, while sales generated by DSA member companies total R7.7 billion.
Support across entire SMME spectrum
“We hope that the President’s address marks the beginning of government’s support for SMMEs across the entire spectrum, including the direct selling industry. Direct selling is a professional distribution channel that offers entrepreneurial and income generating opportunities,” says Parshotam.
One of the biggest advantages of direct selling is that it is a model that requires little start-up capital, which is especially important at a time when many people are struggling financially. “Direct selling empowers entrepreneurs by giving them access to a low-cost business model that offers independence and flexibility, as well as an opportunity to grow at their own pace,” says Parshotam.
“As many households’ incomes continue to come under pressure due to loss of employment and reduced incomes, there has been a significant increase in the interest in direct selling.”
While the DSA fully supports President Ramaphosa’s commitment to foster a favourable environment for SMMEs, it is appealing to government not to overlook the direct selling industry, which has the potential to empower many emerging entrepreneurs.
Providing income opportunities
“We would like government to realise that the direct selling industry has become a key player in providing income opportunities for many South Africans and, as such, we believe that it will continue to be a significant player in the country’s economic recovery plan.
“Therefore, we call on government not to overlook the direct selling sector in its renewed commitment to support the country’s SMMEs, but to see us as an integral part of the country’s economic revival programme,” he adds.
Parshotam notes that it can no longer be denied that there is an urgent need to boost the entrepreneurial activities of South Africans, especially in the face of the devastation wrought by the COVID-19 pandemic and the fact that employment opportunities in the formal sector have shrunk significantly.
“As a country, we urgently need to promote entrepreneurship as a career path, rather than as a last resort. This will not only bolster people’s intentions to become entrepreneurs, but encourage greater participation in entrepreneurial activities,” he concludes.