September 8, 2006
By Anish Abraham
THE Joburg Business Week 2006 aims to promote the development of small and medium businesses as an alternative to large corporations in an effort to halve unemployment and poverty in South Africa.
Joburg Business Week brings together the Franchise and Business Opportunities Expo and the Eskom Small Business Development Expo, and will be complemented by a business skills conference.
The event is being held at Gallagher Estate, in Midrand, from 7 to 10 September.
At Joburg Business Week: Absa's Sizwe Tati; keynote speaker Thami Mazwai and Zandile Mjoli, from Eskom
The City of Johannesburg, the Midrand Chamber of Commerce and Industry, Eskom, Absa and the Small Enterprise Development Agency (Seda) are sponsoring this years' event.
The concept of making access to information easier for small, medium and micro enterprises (SMMEs) was first developed in 2004, after representatives from the Midrand Chamber of Commerce and Industry and the City of Johannesburg attended the Cape Town Small Business Week.
The 2005 Joburg Small Business Week attracted over 10 800 visitors, making it the best-attended industry event held in South Africa.
The City's involvement
"It is not usual for local government to get involved in such areas, but for a city of Johannesburg's significance, it needs to be actively involved in economic development," said Linda Vilakazi-Tselane, the City's acting director for economic development at the launch on 7 September.
She said that it was quite clear that the problem of unemployment could not just be resolved through creating more jobs, but through many employment seekers becoming entrepreneurs, creating their own businesses and later providing jobs to others.
Even though Joburg's economy has been growing at a faster pace than the national rate (5,7 percent versus 4,9 percent), unemployment and huge disparities between the incomes of the rich and the poor still exist.
"We have also sponsored 30 locally situated small businesses, so they can exhibit their products and services at the exhibition for free," she added.
Talking about the City's Growth and Development Strategy, she said one of its main objectives was the proactive absorption of the poor, ensuring shared and balanced growth to improve social mobility.
"Though it may seem sometimes that we are only concentrating on the Johannesburg inner city and Soweto, we are also keeping an eye out for development in our northern regions," she told the delegates.
By way of example, Vilakazi-Tselane related a few of the City's initiatives designed to boost small business and black economic empowerment within its borders.
These included the Soweto Empowerment Zone, which will bring together small and medium enterprises in the township in a single office park. They will also be given assistance to turn themselves into formal businesses, while also being more accessible to potential customers and clients.
The City also has a black suppliers database, which contains a list of companies having the necessary black economic empowerment credentials, and Joburg is encouraging big companies to do more business with them.
"We are also looking at launching a Regional Equity Fund, to enable easier access to finance for small businesses. This business week is very vital and we hope it goes toward greatly improving the futures of those companies that are present," she concluded.
Promoting SMMEs
Sizwe Tati, managing executive for small businesses at Absa, said the bank saw its support to the SMME sector as strategic to their future plans. Promoting the sector was vital to ensure sustained transformation in the South African economy and reduce huge income gaps.
Unlike the traditional lending model, which takes into account the security and track record of the lender, the bank has a Business Incubator Fund, whereby funds are provided in lieu of a minor equity stake in the business.
Eventually, once the business is up and running, the bank plans to sell back its minority stake to the business owner.
"We have also established a Small Business Advisory Centre in Pimvile and hope to expand the concept to all cities and major areas in South Africa," Tati said.
The advisory centre will assist small businesses, where the owners/founders tend to be responsible for all areas within the business. He said the franchising opportunities being promoted at the exhibition were vital, as they were an easier way of entering into business than through private ventures.
National electricity utility Eskom is also playing a big role in small business development, and some 60 percent of the black economic empowerment companies that exhibited at its 2005 exhibition won orders from big corporations.
"It is not about a hand-out but a 'hand-up'. We do not see ourselves as just delivering electricity, but promoting development in the country," explained the general manager in the office of the chief executive at Eskom, Zandile Mjoli.
The Small Business Development Agency (Seda) considers itself as one of the main drivers of SMMEs in the country, and hopes to have branches operational in all district municipalities by the end of 2007.
Seda provides services such as training entrepreneurs in basic business skills, helping them to compile their business plans and approach financial institutions for funding. It also helps potential businesspeople to better understand the dynamics of the business they wish to enter into, such as market environment and existing competition.
"To better help these people, we also have an agreement with Cipro to enable entrepreneurs to register their businesses at all Seda branches," said Thandile Gubevu, Seda's executive manager for products and services.
Talking equality
Keynote speaker, Professor Thami Mazwai, in his capacity as the chairman of the SMME chapter at Business Unity South Africa (Busa), said: "Political and economic equality is vital for development is South Africa. Serious economic imbalances are a grim threat to political and social security in the country."
Mazwai said it was unacceptable that a situation existed where vast majority of the benefits of impressive economic growth in the country were restricted to a few while others still faced a social degradation and a daily struggle for survival.
"To compound the situation we are faced with the challenges posed by HIV/Aids," he said.
He said while entrepreneurs were driven to business creation for motives of self-actualisation and profit-making, they eventually needed to hire additional people should they succeed and want to expand.
Mazwai said the economies of developed countries were driven by small companies, which employed between two and 10 workers, rather than the more famous large companies.
"It is ironic that while they [developed countries] are aggressively supporting their SMMEs, Africa is still madly in love with big business and multinational corporations," he bemoaned.
Mazwai said that instead of enterprise development, too much focus was being put on black economic empowerment deals that "merely divided existing wealth" rather than creating new wealth.
"SMMEs are critical as they assist in the development of the country. It is commendable that there are also participant businesses from the SADC region, as increased trade between our nations is also necessary," he concluded.
Entrance to the exhibitions at the Johannesburg Business Week is R30.
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