SME sector pins hopes on budget speech for energy security, opportunities

SME sector pins hopes on budget speech for energy security, opportunities

The extent of the load shedding mitigation measures for small and medium enterprises (SMEs) will be the amount one particular challenge the sector wants to be addressed in finance minister Enoch Godongwana’s price range coverage Assertion on 22 February. Shawn Theunissen, the founder of the SME accelerator programme Residence Issue and president of the Johannesburg Chamber of Commerce and Sector, notes that a stable electricity offer is of paramount importance for SMEs.


Driving SME advancement is critical to meet the government’s aims of supporting financial expansion and work development,” reported Theunissen. “To grow and be sustainable SMEs need obtain to a reliable and price tag-economical electrical power supply.”

He stated marketplace welcomed the announcement in President Cyril Ramaphosa’s Condition of the Country Tackle (Sona) in February stating that the Section of Little Small business Development would get the job done with the National Treasury on how the “Bounce Back again Scheme” could be strengthened to guide SMEs in the casual sector to make investments in photo voltaic machines.

In addition, the go to allow banking companies and improvement finance establishments to borrow immediately from the scheme to facilitate the leasing of photo voltaic panels to their clients is also supported.

“Following on from the Sona handle, we expect to hear extensive element on the revision of the bounce again plan in relation to the price tag of photo voltaic and how the scheme would function nearly,” mentioned Theunissen.

“The Minister will have to also deliver a timeline for implementation. Time is of the essence as load shedding continues to guide to dropped efficiency, inventory spoilage, and shortened buying and selling hrs, amongst other individuals, which has pressured several tiny corporations to shut above the past 18 months.”


In his Sona address, Ramaphosa introduced the allocation of R1.4bn in funding by way of the Tiny Business Finance Agency to more than 90,000 business people and funding options as a result of Post Financial institution. In addition, governing administration is operating with the SA SME Fund to establish a R10bn facility to guidance SMEs with about R2.5bn funded by govt and the harmony of R7.5bn coming from the non-public sector.

“Such funding mechanisms can be an perfect boost to SMEs delivered it is managed efficiently to ensure that the most promising entrepreneurs and successful incubators and support mechanisms receive the finance they have to have.

Funding stays the one largest obstacle to SME sustainability, and it is of utmost worth that this finance reaches individuals who are able of driving progress and lengthy-term profitability that can make decent employment and promote extra sturdy financial progress,” stated Theunissen.

Purple tape reduction

In 2022, Ramaphosa introduced the appointment of revered businessman and corporate chief Sipho Nkosi to the presidential process group to slice pink tape. On the other hand, considering the fact that then there has been a lack of element all-around what is getting finished to minimize red tape for SMEs.

“To provide on strong and sustainable SMEs, we need to be creating the company ecosystem as welcoming as doable. SMEs should really not have to endure the exact regulatory requirements as big firms as several merely do not have the sources to do so,” he claimed.

The a single tangible factor the presidency has pointed out is the amendments to the Organization Act which is to be concluded this yr, and the Spending budget Speech have to deliver element on the proposed changes.

Infrastructure assignments

The President mentioned a number of big infrastructure projects that present a sizeable chance for SMEs – R14bn has been invested in the telecommunications sector the SA Expenditure Meeting is set to mobilise much more that R2tn in new investments by 2028 to improve regional manufacturing for SMMEs and 24 bridges are at present below development in KZN.

It is essential that Minister Godongwana supply a apparent indication of the ideas and how SMEs will reward from these projects.

Inexperienced energy alternatives

Via the Just Energy Changeover Investment decision Plan, R1.5tn could be invested in South Africa about the up coming 5 several years in new frontiers of renewable electricity environmentally friendly hydrogen and electric powered cars and the rollout of rooftop solar panels.

Various companies that have participated in the renewable vitality programme will quickly begin construction and supply a complete of 2800MW of new capacity. Northern Cape has now captivated R100bn in investments for renewable electrical power jobs, even though the electrical energy condition of catastrophe declared by Ramaphosa will support organizations in the food production, storage, and retail supply chain and involves rollout of generators, solar panels and uninterrupted electric power offer.

Theunissen reported: “These moves are essential to obtaining power stability again on monitor, nonetheless, there is minor element on how SMEs will perform a section in all these alternatives. The go to green energy is in line with global shifts away from fossil fuels and South Africa is proper to shift in this route.

“What we need to have, although, is a coherent system to make certain that not only significant companies advantage, but that SMEs also enjoy a major role and profit from this rapid-growing market.”

Girl empowerment

The President claimed that considering the fact that asserting its resolve to immediate at the very least 40{a0ae49ae04129c4068d784f4a35ae39a7b56de88307d03cceed9a41caec42547} of community procurement to women-owned businesses, authorities experienced sought to set up an enabling ecosystem for gals in business. To this conclusion, govt had recorded that more than 34,000 women of all ages-owned enterprises had been experienced in planning for procurement options.

On the other hand, a exploration report introduced in 2022 by the Commission for Gender Equality to evaluate the state’s compliance with its 40{a0ae49ae04129c4068d784f4a35ae39a7b56de88307d03cceed9a41caec42547} procurement allocation identified that procurement procedures by the governing administration are not made or geared to marketing sustainable economic empowerment for females.

The finances speech for that reason need to recommit to women’s empowerment in company and present a detailed update on the good results of these general public procurement initiatives.