The small business lobby group Black Entrepreneurs Alliance (BEA) has made a call to the government of national unity to revise its policies on black business empowerment.
CEO of BEA Refilwe Monageng stated that it was vital for the government to review its deal on black-owned business empowerment.
BEA is a non-profit-organisation that “helps black entrepreneurs and professionals launch successful ventures against the challenges of systemic barriers”. Monageng said there was a need for a new deal “to support and empower black-owned businesses, address historical injustices, and drive economic growth and development”.
He said the BEA was eager to collaborate with the new government to fight poverty and uplift previously disadvantaged communities in line with the organisation’s shared commitment to economic empowerment and inclusivity.
He also said as black business, many entrepreneurs find themselves experiencing challenges such as finance, access to capital and support system that could have helped their enterprises flourish.
“The challenges are mainly faced by black entrepreneurs as there is red tape based on race.
“White people have it easy in accessing funds and capital for their businesses but for black entrepreneurs, there are challenges and a blockage for us to get funding and support system to also build our businesses” Monageng said.
“Being a black business owner in South Africa is challenging. Recent statistics reveal a 34.6% increase in general business liquidations in January 2024, compared to the previous year. Moreover, research indicates that approximately 70% to 80% of local small businesses fail within five years. This underscores the urgent need for support and intervention to prevent further business failures and promote economic recovery. The added hurdles faced by black businesses exacerbate these challenges for previously disadvantaged communities.
“It is crucial for black entrepreneurs to have a market access, a facilitation of admission to markets and procurement opportunities for black-owned businesses is critical.
“We urge the government to implement these measure. We need to have a strategic vision and proper implementation of saving township economy in order for us to provide goods and services to our own people as this will enhance viable opportunities for our business to grow and also contribute massively to the GDP.”
This week cabinet approved the establishment of an advisory body within the Department of Small Business Development. Government announced “the establishment of an advisory body is to ensure representation and promotion of the interest of small enterprises as contemplated in the National Strategy for the Development and Promotion of Small Enterprises in South Africa.”
“The primary function of the advisory body will be to advise the minister on broad areas that affect small enterprise growth, including national standards pertaining to small enterprise development and regulation.
“The advisory body will provide government with evidence-based expert advice on the functioning of various aspects of the small enterprise support ecosystem to enable more effective policy reforms, legislative amendments, and design of interventions to support micro, small and medium enterprises and cooperatives.”
Dieketseng Morolong from Thokoza, who is in the motor repair business, raised concern about access to funding.
“We are trying our best to have assets that we can use as assurance to the funders when we need funds to grow our businesses. However, it becomes a problem to get such funding as we are regarded as high risk and liabilities. This is a painful reality we are facing.”
Siphelele Nkabinde from Inanda in Kwazulu-Natal who is in the business of designing high end clothing, said: “Fashion business is mainly occupied by white people and for us as black designers to get in, it’s a big challenge as we don’t have means. We have to pay money to be part of fashion weeks, and the money paid there is not a child’s play.”
