President Cyril Ramaphosa
By Nkosana Khumalo
In a compelling address at the Presidential Micro, Small and Medium Enterprises (MSMEs) and Cooperatives Awards held at the Gallagher Convention Centre in Gauteng on Friday, President Cyril Ramaphosa urged financial institutions to seize the opportunity presented by declining interest rates to bolster funding for small businesses.
“As interest rates are coming down and are bound to come down even further, this is the time to make finance available within obviously the various considerations that you have to take into account,” President Ramaphosa stated. “This is the time to make finance available and pump energy and life into our economy because when small and medium enterprises are given enabling energy by our financial institutions… they will be able to run businesses, to be creative, to create jobs, and our economy can grow.”
The awards ceremony, hosted by the Department of Small Business Development, aimed to highlight and reward the achievements of South Africa’s top-performing MSMEs, cooperatives, and ecosystem enablers who drive growth and transformation across the nation. The event honoured businesses that embody innovation, commitment to local development, and entrepreneurial spirit.
Addressing recent concerns, the President touched upon the spate of foodborne illnesses linked to spaza shops and informal traders in townships, emphasizing the importance of regulation, health, and safety. He acknowledged the critical role small businesses play in communities, providing essential services and supporting local economies.
“That is why it is so important to bring small businesses into the mainstream of the economy, and that we provide the necessary support for them to do this,” he said. “International experience shows that MSMEs are drivers of sustainable growth. Countries with more MSMEs tend to have lower levels of inequality. Entrepreneurs are the drivers of innovation.”
However, the President noted that entrepreneurship rates in South Africa are low by continental standards. He emphasized the need to encourage entrepreneurship and enable the emergence and growth of MSMEs and cooperatives. “We must focus on targeted interventions to address financial exclusion and onerous regulatory requirements. We must provide access to funding, capacity building, and other support,” he asserted.
Highlighting government initiatives, President Ramaphosa mentioned the merging of the Small Enterprise Finance Agency (SEFA), the Small Enterprise Development Agency (SEDA), and the Cooperatives Bank Development Agency into the newly-formed Small Enterprise Development Finance Agency. To date, this agency has disbursed R730 million, with R101 million allocated to township enterprises and R261 million to rural enterprises. Additionally, non-financial business support has been provided to over 15,000 township and rural enterprises.
The President also announced forthcoming legislation aimed at streamlining business licensing, including the development of an e-registration system integrating the South African Revenue Service and the Companies and Intellectual Property Commission (CIPC). He underscored the importance of focusing on start-up growth, particularly in the tech sector, to ensure South Africa remains competitive in the global transition to knowledge and innovation-based economies.
Expressing optimism, President Ramaphosa commended the Department of Small Business Development and the Department of Science and Innovation for their work on a national start-up policy, which will address issues such as intellectual property registration and foreign exchange controls.
“Even as this is all work in progress, we recognize the urgency with which we must scale up support for small businesses in South Africa. They are the driving force of our economy,” he said. He congratulated the award finalists and recipients, describing them as shining examples of what can be achieved with the right support.
In closing, the President extended gratitude to the award organizers, sponsors, and the millions of entrepreneurs who contribute to the country’s economy. “These are the micro, small, and medium enterprises and cooperatives that create livelihoods and jobs. They provide communities with vital services. They create value that goes far beyond turnover or profit. They contribute in a million different ways to building a more equal, more prosperous, and more productive society,” he concluded.
The call to action from President Ramaphosa comes at a pivotal time, as the South African Reserve Bank (SARB) has recently reduced the main interest rate by 25 basis points to 7.75%, responding to a significant drop in inflation . This monetary easing presents a conducive environment for financial institutions to extend more accessible funding to MSMEs, thereby stimulating economic growth and job creation.
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