Minister of Small Business Development, Ms Lindiwe Zulu
BRICS MSME Roundtable Meeting
Monday, July 23, 2018

Programme Director;
Representatives of the BRICS Member states;
Distinguished delegates;
Ladies and gentlemen

I am delighted to join you this morning and welcome you to this historic session.

I am confident that, arising from your engagements today, we will be able to develop robust building blocks for effective collaboration and co-operation among BRICS members on issues of Medium, Small and Micro Enterprises (MSME) development and promotion.

South Africa’s membership of BRICS has been one of the key strategic partnerships of the democratic South Africa and is a key platform for promoting South-South trade and investment.

The BRICS membership is beginning to show its potential benefits to the local economy. BRICS partners share best practices and development models to address and combat these common challenges. More importantly, BRICS seeks to advance the restructuring of the global political, economic and financial architecture into one that is more equitable and balanced and which rests on the important pillar of multilateralism.

BRICS accounts for 40 percent of the world’s population.
With a combined GDP of approximately $15 trillion, BRICS countries account for 19.3% of gross global product; 42.7% of the world population; and has contributed more than 50% to the world economic growth during the last 10 years.

Intra-BRICS trade has grown from US$567 billion in 2010 to $744 billion in 2017. South Africa-BRIC trade has grown from $28bn to $35bn over the same period. Both SA exports to and imports from other BRICS countries have grown at a rate faster than South Africa’s global trade, thus increasing the importance of other BRICS countries in South Africa’s trade basket. Combined, the BRIC countries account for 15.4% of South Africa’s global exports, and 25.4% of the country’s imports. The key focus for BRICS should be to change the structure of our trade and promote value-added trade so as to contribute to the structural transformation of our economies.

The SMME sector in many of the BRICS economies contribute up to nearly half of their exports, manufacturing output and GDP. Together we are addressing key barriers/impediments faced by SMMEs and the need for cooperation among the BRICS countries to effectively address the barriers to trade and investment amongst the SMMEs.

Across the globe, experience demonstrates that small business and co-operatives thrive if an enabling environment is created and if there is a robust partnership between government, big business and the SMMEs and co-operative sector.

In this regard, South Africa has identified small businesses and co-operatives as critical to creating an economy that benefits all. South Africa’s economy needs a thriving small business and cooperatives sector to reach national socio-economic goals of a prosperous and inclusive society. It is only through a flourishing inclusive economy that the challenges of inequality, unemployment and poverty can be comprehensively addressed.

Our point of departure is that small businesses can be the backbones of any economy and the main driver of economic growth, poverty reduction and job creation. A healthy SMME sector can make a massive contribution to the economy by creating more employment opportunities and generating higher production volumes.

The country’s high rate of unemployment and extreme inequality call for bold and far-sighted interventions. The National Development Plan is the vehicle which will address poverty, unemployment and inequality. It sets an ambitious aim to treble the size of the economy by 2030, a daunting challenge that will require our collective contribution. Meeting the NDP’s growth target of 5.4 % for the next 16 years would not only guarantee South Africa’s material prosperity, but would be an elevating and inspiring narrative for the country.

As the NDP makes clear, getting South Africa onto a high-growth trajectory demands that we fundamentally change our game plan and place small businesses and co-operatives at the centre of our war against poverty, inequality and unemployment. Developing a strong and growing SME community is a cornerstone of the NDP’s vision. SMEs are expected to be central to South Africa’s job creation efforts, in line with international trends.

One of the specific targets of the NDP is to reduce unemployment to 6% by 2030 through the creation of 11 million jobs. The NDP projects that if we implement the full range of its recommendations, our economy will grow at 5% per annum, with 60-80% of this value being generated by SMMEs and expanding businesses, and that this sector will create 90%, or 9.9 million, of the 11 million new jobs we will boast by 2030. Hence our bold assertion: Small business is big business.

We are heartened to note that the contribution of SMMEs to the economy continued to increase despite the increasingly difficult economic conditions. We are determined to strengthen the small business sector to enable it to occupy its rightful place in the mainstream economy and to demonstrate that Small Business is the Big Business of the future and working together we can indeed achieve more.

This task is not only limited to government but is a joint compact between government, civil society and the private sector. The key responsibility of government is to create an enabling environment for small business to take their rightful places in the mainstream economy.

I thank you