51% of SA businesses have faith in economic climate

By Tom Jackson

Only 51 per cent of South African SME owners have faith that the country’s economy will be conducive for business growth in the next 12 months, a decrease of nine percentage points year-on-year.

This is according to the first quarter 2016 Business Partners Limited SME Index, which measures the attitudes and confidence levels of South African SME owners.

Though there has been no change in attitudes from the previous quarter, the company said economic conditions continue to strain the operating environment for SMEs.

Gerrie van Biljon, executive director at Business Partners, said unless the private sector and government start to work more closely together to create a more conducive business environment, confidence levels amongst business owners will continue to lag.

“Following the events of the firing and rehiring of the finance minister – now known as Nenegate – in the fourth quarter of last year, we expected improved confidence levels given the country’s subsequent fiscal consolidation flowing from the 2016 Budget Speech,” he said.

“However, according to the respondents who participated in this quarter’s index, the majority of business owners continue to possess a negative view when surveyed on various indices.”

Just 35 per cent of respondents believe the South African economy will be conducive for business growth over the next year, down from 45 per cent in the first quarter of 2015.

While 79 per cent of respondents say access to finance is important for the growth and sustainability of their businesses, only 26 per cent are certain they will be able to access business finance in the next year. This is down from 37 per cent the previous year.

Van Biljon says the recent announcement the private sector will set aside ZAR1.5 billion (US$97 million) to help small and medium enterprises survive the tough economic climate with an invitation for government to also contribute to the fund, was an example of the public-private sector collaboration that is required to increase confidence levels.

“Despite the uncertainty in both the economic and political climate, the private sector and government should ensure that affordable funding and technical assistance is available for SMEs, as without this South Africa can’t gear itself for growth. We also need to ensure that procurement opportunities are continuously passed on to SMEs,” he said.

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