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Small business is to get a major boost with over R40 million in support, improvements to the revised local and regional economic (LRED) policy and several other interventions of support following the announcement today by the MEC for Economic Affairs, Environmental Affairs and Tourism Sakhumzi Somyo in Bhisho today.

Outlined in the Somyo's third policy speech for the Department was a commitment to set aside R43 million for SMME support.  The programme, managed by the Eastern Cape Development Corporation (ECDC), would be used to help, amongst others, 80 youth enterprises access finance access.

ECDC is also to financially support 16 cooperatives through the Imvaba Fund. The Fund was established to improve the competitiveness of this sector in the province. Targeted sectors include agri-business (agro-processing), tourism, ICT, chemicals, textile and clothing, timber and forestry, metals, business processing outsourcing, and arts and crafts.

In another landmark announcement, Somyo announced that the LRED policy had been reviewed.

He explained that a major shift in policy for LRED was to use the supply delivery model rather than the previous system of issuing a call for proposals.

“LRED funding,” he said, “had made a significant impact in the development of local enterprises. In the 2015/16 financial year alone, 10 projects were supported with grant funding to the value of R21.9 million to develop and sustain their enterprises as well as create jobs.”

He also said that the provincial SMME strategy had been reviewed in order to align it with the national plans which included cooperatives.

As part of the implementation plan for the provincial SMME strategy, the Department has engaged all relevant stakeholders in the development of a provincial incubation fund. All 14 provincial business incubators have been involved in the process of re-positioning of the incubators which will support growth and sustainability of small enterprises over the next 10 to 20 years.

During the current financial year, the Eastern Cape Development Corporation will target 50 SMMEs in a supplier development programme called the Gazelles.  These SMMEs will be from identified priority sectors and other sectors considered significant for the growth of small business in the province. The Gazelle programme is run by the national Department of Small Business Development and Small Enterprise Development Agency.

The renewable energy, in particular, received mentioned for SMME opportunities: “The sector had created real opportunity for SMMEs for which DEDEAT had initiated a programme of support. Our support project is in its third phase. It engaged with 330 prospective SMMEs and provided follow-up support to 16 selected SMMEs.  This support  helped SMMEs to successfully secure over R17 million in contracts, within and outside of the energy sector."

The Department had also helped to advance SMME participation in the value chain process of wind and solar farms, moving from providing supplementary services such as catering and bush clearing into production processes.

In an initiative aimed to address the high levels of red tape that inhibit the growth of SMMEs, the Department together with other institutions, has established the Provincial Red Tape Reduction Forum to unblock the bottlenecks that are experienced by SMMEs.

The Eastern Cape government is also targeting the development of the informal economy with the Department set to develop a coherent strategy for the township economic sector. 

This strategy will, amongst others, map township businesses, develop packages of support for township entrepreneurs and create an enabling environment for township entrepreneurs to actively participate in infrastructure development projects.  The focus on will be driven through the strategic integrated projects         which focus on municipal infrastructure, urban space and public transport, and agri-logistics and rural infrastructure. 

“Our government must continue to provide financial and non-financial support to our SMMEs, nurture them and ensure that they are better positioned to contribute to the acceleration of economic transformation in our province,” ended Somyo.

Issued by Department of Economic Development, Environmental Affairs and Tourism Eastern Cape