South Africa is in the middle of a severe economic crisis, which appears to have strained the growth of many sectors of the economy, and seems to have sent some entrepreneurs to an early retirement.
However despite this hostile situation, some experts believe that there are sectors that still present a number of opportunities for small and medium enterprises (SMEs), and could contribute to the economic growth that the country is desperately seeking.
SMEs play a crucial role, not only in job creation, but also in enabling diversification through the creation of new sectors and markets that play a key role in driving growth, Siphethe Dumeko, Business Partners CFO, said last week, adding that the past few months have proven difficult for many small and medium enterprise (SME) owners.
“We have seen evidence of this reflecting in the increase in net credit losses in our financial results for the year ended 31 March 2017,” Dumeko said, urging South African entrepreneurs to remain optimistic and take advantage of opportunities that exist to bolster entrepreneurship and growth.
Dumeko cited the following sectors which he said were currently providing the most opportunities for local SMEs:
Information, Communication and Technology (ICT)
The ICT sector, and in particular the expansion of national fibre and bandwidth intensive applications, continues to perform well, despite the sluggish growth of the economy it serves. This is one sector providing a myriad opportunities for SMEs – including the implementation of data fibre cables, Wi-Fi masts as well as products and services providing related technical support services.
The agricultural sector has been one of few sectors to show positive GDP growth in 2017 despite South Africa’s ailing growth statistics and tough environmental conditions that have wreaked havoc on local agriculture. SME owners would do well to consider opportunities in, for example, agro-processing and supply for the local and export market.
Commercial and industrial property
The migration of many people to larger cities and business nodes provides big opportunities for SMEs to be creative and meet the emerging needs that booming urban populations require. This will mean that there will be some long-term investment opportunity in both commercial and industrial property going forward.
Entrepreneurs looking for sectors with potential should consider the opportunities in the education sector, and look for gaps within this market that require a fresh approach to meet the identified challenges that exist within the public schooling system.
The green economy industries such as renewable energy and energy-efficiency solutions present entrepreneurs with opportunities to find creative ways of addressing critical energy- and environment-related challenges.
Pic courtesy of StreetMoney