Entrepreneurs need more than the measures outlines in President Cyril Ramaphosa’s Economic Reconstruction and Recovery Plan.
While the plan offers little new information to save our economy from complete destruction, according to Osidon CEO and small business expert Hennie Ferreira, there is nothing new for entrepreneurs and small businesses to take heart from.
“Our situation is not a normal economic downturn, and we cannot address an abnormal economic cycle with a normal response. This plan offers only the normal response we’ve seen before,” Ferreira says.
The small business (SMME) sector has been the hardest hit during the COVID-19 pandemic and many businesses had to close their doors. Others managed to survive by rethinking their business models and embracing digital transformation.
“The fact is that entrepreneurs and small businesses will not benefit from this plan. They make up a huge part of the economy and need specific reforms if there is any hope of survival,” Ferreira said.
According to Ferreira, South Africa need the specific economic reforms to support entrepreneurs. Government needs to make it much easier to do business in South Africa.
This requires deregulation, fewer compliance hurdles and a significant cut in red tape.
Ferreira says the government owes it to the business sector to deregulate and ensure that the ecosystem for business and entrepreneurs improves.
“We also need a tax regime that is favourable for foreign investors. We are competing against much larger developing countries with much more potential for growth. We need to become more competitive and outpace other players for investment,” Ferreira said.
Ferreira urged the government to provide private investors and venture capitalists as well as small businesses and start-ups with tax incentives so businesses have easier access to funding.
“This is the only way to transform the economy,” Ferreira says.