By Tiisetso Makhele
“For an economy to grow, we need a growing, vibrant small business sector and a thriving established business community” – Makalo Mohale, MPL, 31 September 2021.
Introduction
Like the rest of South Africa, the Free State province faces persistent challenges of inequality, unemployment and poverty. To overcome these challenges, most people agree that we need to imaginatively work together, through radical, proactive social compacting measures, to find lasting solutions to our challenges.

Problem Statement
According to the latest statistics, the Free State contributes a meagre 5 percent to the South African GDP. This is despite the province’s strategic positioning in the centre of South Africa, as well as its mineral resources. As at the second quarter of 2021, the Free State’s official unemployment rate stood at 36.5 percent, the second highest after the Eastern Cape (47.1 percent).
The Free State’s economy remains largely reliant on the tertiary sector, with finance and government constitution the largest and second largest sectors, consecutively. The economy continues to have small number of large companies dominating sectors of the economy, thereby increasing concentration. Small companies and cooperatives have high mortality rates due to a number of reasons. All these reasons calls for collective planning, collective execution and collective reflection.
Premier’s and MEC’s Meeting with established business
As part of enhancing the social compact necessitated by i) lack of trust between the private and the public sectors; ii) lack of alignment between the plans of both sectors; and iii) the current socio-economic conditions facing our people, the Premier yesterday met with captains of industry.
The meeting sought to lay a foundation for a new chapter between the two players, in order to ensure that both traverse towards a common vision, of a united and prosperous Free State province. Amongst companies represented were; ABSA, Standard Bank, Free State Rugby, Dunlop, PHG Group, Arrow Logistics, Supreme Poultry, Shoprite & Checkers, MFT Link.
The meeting agreed that a new social compact, whose need has been necessitated by the outbreak of the Covid-19 pandemic, must emerge to, inter alia, devise strategies to curb disinvestment and also attract new investment.
The industrial players greatly welcomed the posture by the DESTEA, under the leadership of MEC Makalo Mohale, to involve them in the planning for a new path for the Free State economy. They were even more warmed that the Premier of the Free State, Mrs. Sefora Ntombela, showed so much passion and determination for the economy. There is no doubt that, working together, all these stakeholders will change the situation around.
MEC meets SMMEs’ at the Mimosa Mall Access Entrepreneurs Market
Working together with stakeholders like Checkers, SEDA, ABSA, Courant and OFM, the DESTEA organised that our SMME’s display their products in the corridors of the Mimosa Mall in Westdene, Mangaung. One of the issues causing high mortality rates amongst small businesses is access to markets, and DESTEA committed to assist in this regard.
With an average monthly foot count of 500 000, Mimosa Mall is an excellent site for any entrepreneur to display their products. Amongst those who displayed their products were shoe and belt manufacturers, coffee makers, flower planters, events planners, beads makers and book sellers.

Conclusion
The events of yesterday marked an important crossroad in the approach of the state to transform, grow and develop the economy. Often, the state makes the mistake of ignoring the chasm between the established and small businesses. Yesterday, the leadership of the government in the Free State showed that none of the sectors must be neglected. Their needs may vary, but both are crucial in realization of a fully transformed, inclusive and developed economy.
In playing its mandatory role creating a conducive environment for the economy to grow, the state must continuously engage, and enter into a compact with all sections of the population, especially the business sector, irrespective of size.
Makhele is Acting Chief Director: Integrated Economic Development at Free State Department of Economic, Small Business Development, Tourism & Environmental Affairs
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