Date: 05/03/2012

Source: The Democratic Alliance

Title: DA: James: Democratic Alliance federal chairperson, at the harambe entrepreneurship summit, Cape Town

 

It is an honour to open the entrepreneurship roundtable of the Harambe Entrepreneur Alliance session at the Parliament of South Africa.

At this time, with our country’s youth unemployment figures hovering at just over 50% of the economically active population, and with many traditional industries reluctant to take on young graduates, facilitating the emergence and success of young entrepreneurs has never been more important, or more urgent.

The challenges facing young men and women in today’s global economy are complex, and are underpinned by a host of factors including educational attainment, skills acquisition, labour market rigidities and structural problems in the economy.

These issues are not limited to South Africa.

Whether one looks to the tens of thousands of indignados filling the town squares of Spain, the Occupy movements in London and New York or the student protests in Iran and Morocco, it is clear that we need to take a long, hard look at the barriers constraining the upward mobility of young job-seekers and entrepreneurs.

Across the world young people are demanding that economic opportunity is not monopolised by economic insiders or political elites; but rather that economies are opened up so they can get a fair chance, and so that their voices can be heard.

It is hugely encouraging, then, that Harambe, through this series of international workshops and colloquia, is seeking to identify the core challenges faced by young African entrepreneurs, and through its network of highly educated members and affiliates, begin the important work of unlocking our continent’s vast economic potential.

The indicators suggest that this combination of skills and expertise from the diaspora, and the youthful vitality and rich natural resources of the continent, has what it takes to make Africa a potent economic force, able to meet the pressing demands of its people and emerge as a competitive player on the global stage.

Our continent has the fastest growing youth population in the world; our cities are growing as never before; and demand for our oil, gold, diamonds, timber and rare earth metals from the fast-growing economies of East Asia, India and Latin America is pushing commodity prices to heights never seen before.

Our continent’s large and growing youth population is an asset, but ensuring that it aids and augments Africa’s economic development will require significant changes to government policy, changes that:

- reduce regulatory burdens faced by entrepreneurs;
- reduce the costs of compliance;
- facilitate access to capital;
- expand access to, and improve support services for small businesses; and critically
- promote entrepreneurial thinking through education and skills development.

We in South Africa still have a long way to go. According to the World Bank’s Doing Business report, our country ranks 75th in the world for ease of starting a business, which reflects the bureaucratic complexity, high costs as well as the time it takes to open a new enterprise in South Africa.

Whereas it takes an average of 22 days to set up a business in South Africa, go through the six procedures required and pay the necessary fees, in Mauritius it takes only six days and five procedures.

However, South Africa still compares favourably with our partner in the BRICS group of countries, Brazil, where it takes 119 days to go through the 13 steps required.

This example illustrates two important points. First, if we are to successfully plant the seed of entrepreneurship in Africa, and assist the establishment and growth of new businesses, we need to make it simpler, quicker and more cost effective for African entrepreneurs to translate their ideas into action.

Second, we as Africans can, and should, learn from each other. Mauritius has climbed up the Doing Business rankings because it has put in place smart reforms that have enhanced its competitiveness and attractiveness as an investment and trading hub, placing it well ahead of countries such as Switzerland and Qatar.

We are seeing similar reforms taking root in our Southern African neighbour, Botswana, as well as in Kenya, Ethiopia, Tunisia, Ghana and Nigeria.

The Democratic Alliance (DA) believes that entrepreneurship and innovation need to be placed at the centre of the economic policy agenda. We believe that a key role of government is to facilitate the emergence of dynamic new businesses, and empower young, innovative entrepreneurs to lead the charge against unemployment and poverty in our country.

In our alternative budget the DA outlines a number of proposals the national government should consider to open opportunities for South African entrepreneurs.

These include a Business Voucher Support Programme to assist municipalities in offering support services to start-ups and SMMEs; a Cash Flow Assistance Programme to help businesses with a turnover of less than R5 million weather temporary difficulties; and a National Venture Capital Fund to provide investment capital to assist early stage businesses to grow.

To incentivise training and skills development, we have outlined proposals for a skills reimbursement grant scheme which would reimburse employers for the full amount spent on approved training programmes for their employees. This is on top of the Youth Wage Subsidy, which we have long championed, but which the ANC has successfully buried.

In my capacity as Federal Chairperson of the DA I am currently heading up a major policy development and review process, the 8% Growth Project, that seeks to unpack the challenges facing the South African economy. We will be proposing a set of cogent and effective policy solutions that will put South Africa on a path to rapid economic growth.

Through this forum, I look forward to hearing your views about the issues facing young entrepreneurs on the continent, and how, through smart policy reforms, we might unlock Africa’s vast entrepreneurial potential and expand opportunities for all our people.

Thank you.