President Cyril Ramaphosa presented his seventh State of the Nation Address (Sona) on Thursday.
During his address, the president announced measures to assist small businesses in the country, which is often referred to as the lifeline of the economy.
“Last year, we launched the bounce-back loan scheme administered by banks and other financial institutions, and guaranteed by government, for companies that need finance to recover from the effects of the pandemic,” Ramaphosa announced.
“The Department of Small Business Development will work with National Treasury on how the scheme can be strengthened to assist small and medium enterprises and businesses in the informal sector,” he said.
“To address the challenge of youth unemployment, the Employment Tax Incentive has been expanded to encourage businesses to hire more young people in large numbers. Last year I announced that we would be seeking to reduce red tape so that we can rid our country of the unnecessary bureaucracy that often holds us back. The red tape reduction team in the Presidency under Mr Sipho Nkosi has been working with various departments to make it easier to do business. It has taken a collaborative approach, working with departments and agencies in areas such as the mining rights system, tourism transport operator licenses, visas and work permits, early childhood development and the informal sector,” Ramaphosa said.
The president said that this year, the government will finalise amendments to the Businesses Act to reduce regulatory impediments for SMMEs and co-operatives and make it easier for entrepreneurs to start businesses.
“Through the Small Enterprise Finance Agency – SEFA – we plan to provide R1.4 billion in financing to over 90 000 entrepreneurs. The government in partnership with the SA SME Fund is working to establish a R10 billion fund to support SMME growth. The government is looking at the possibility of providing R2.5 billion for the fund and for the balance of R7.5 billion to be raised from the private sector,” the president said.
Ramaphosa said that the foundations have already been laid for a state bank.
“The licensing of the PostBank will lay the foundation for the creation of a state bank that will provide financial services to SMMEs, youth- and women-owned businesses and underserved communities. As the National Assembly considers the Postbank Amendment Bill, the Postbank is reviewing its service offerings so that it can provide a viable and affordable alternative to the commercial banks. The most effective and sustainable way to build an economy is to equip people with the skills and know-how to drive it. We have therefore been working to strengthen the link between the skills that we develop and the skills the workplace needs,” the president said.
“This year, the National Skills Fund will provide R800 million to develop skills in the digital and technology sector through an innovative model that links payment for training to employment outcomes. We reiterate our call to companies, departments and SOEs to remove the requirement for work experience for young people seeking entry-level positions,” Ramaphosa further said.
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