South African govt tackling bureaucracy to help SMEs

South African govt tackling bureaucracy to help SMEs

Owners of Small and Medium Enterprises (SMEs) in South Africa will perhaps be delighted to hear that the government will soon be doing something ‘good’ to create a favourable  environment where they can grow and prosper smoothly.

Government has long been accused by experts and entrepreneurs of hampering SMEs’ growth through a litany of inflexible and rigid laws and an interminable bureaucracy, which pollute their business environment.

Now out of the blue, the South African ministry of trade and industry (dti) announced recently that it will launch a set of guidelines to reduce municipal red tape to support SMEs.

The launch will take place on Tuesday in Johannesburg, and the project is being supported and partnered by the ministry of cooperative governance and traditional affairs (CoGTA) and the South African Local Government Association (SALGA), ministry spokesperson Sidwell Medupe said in a statement.

The guidelines serve as a practical implementation framework to reducing local government or municipal red tape for the enhancement of business environments with specific attention to SMMEs, he explained.
“These guidelines are also aimed at enhancing municipal officials’ capacity to improve the local business environment via Local Red Tape Reduction and contribute towards improved service delivery, job-creation and poverty reduction.”

Trade and industry minister Dr Rob Davies said government has developed policies, laws and regulations that encourage open markets, innovation and a more competitive economy.

Although the government reiterates that it is striving to help create a slick space to help SMEs grow and flourish, owners and experts say the reality on the ground is different.

Davies blames some challenges affecting SMEs to the local business environments that he said were discouraging investors (both domestic and foreign), and standing in the way of innovation, growth and the potential creation of jobs.

“This is exacerbated by the unfavourable regulatory environment, high costs and risks of doing business in these localities,” he said, adding that the guidelines will therefore also serve as a means for the creation of an enabling business environment.

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