“Ultimately,” announced our new president, Cyril Ramaphosa, last Friday, “the growth of our economy will be sustained by small businesses, as is the case in many countries. It is our shared responsibility to grow this vital sector of the economy.”
In his first State of the Nation Address, President Ramaphosa paid tribute to the unyielding struggle of both Nelson Rolihlahla Mandela and Albertina Nontsikelelo Sisulu, declaring his intention to continue their work to improve the quality of life for all South Africans.
He also alluded to the dawn of a new era in politics that would reignite the faith of the people in their government: “We are determined to build a society defined by decency and integrity that does not tolerate the plunder of public resources, nor the theft by corporate criminals of the hard-earned savings of ordinary people.”
But Ramaphosa’s main focus was the economy, highlighting mining, agriculture and tourism as industries with further opportunity for growth, and technology as a vital emerging sphere in which significant investment should be made. “The fourth industrial revolution is upon us,” he said, urging citizens to “seize the opportunities and manage the challenges of rapid advances in information and communication technology.”
Central to rebuilding the economy is the issue of youth unemployment, and this is to be addressed through paid internships, apprenticeships and entrepreneurship programmes.
Small business is to be bolstered through a variety of strategies: Ramaphosa reiterated the government’s undertaking, for example, to set aside at least 30 percent of public procurement to small, micro- and medium enterprises (SMMEs), cooperatives and township and rural enterprises; and encouraged corporations to further engage in small business incubation.
He also pledged to nurture a “small business support ecosystem that assists, nourishes and promotes”, to break down the barriers to entry for entrepreneurs as well as the regulatory barriers that disempower small and medium enterprises.
The president went on to announce the establishment of “a small business and innovation fund targeted at start-ups... so that those South Africans who are entrepreneurially driven [may] get support from government.” He cited as inspiration the CEOs Initiative, a small business fund currently valued at R1.5 billion, which he hailed as “an outstanding example of the role that the private sector can play in helping to develop small and medium enterprises.”
While the intentions are good it is clear is that this will be a mammoth task. Ramaphosa has inherited a poisoned chalice: former president Zuma’s promise to provide free tertiary education (something his own advisory committee had declared simply unaffordable). Add to this a ruling party deeply divided, an economy in crisis, credit downgraded to junk, a burgeoning state debt and a people disillusioned. As the Guardian's Economics editor Larry Elliott puts it, "The new South African president has taken over an economy that should be a regional superpower but has been seriously underperforming in recent years."
Can our new president pull this off? Professor Nick Binedell, founder of GIBS (Africa’s top business school), told BizNews on Friday, “We’ll see… [Ramaphosa’s] a remarkable individual really... Look at his life: he’s been a student leader, a union leader, he built NUM (National Union of Mineworkers) from 6 000 to 300 000 members and administered it as general secretary. He was a negotiator; he’s a lawyer; he was secretary-general of the ANC. He went into business (where he flourished), and he’s been deputy president. I don’t know of any other country [whose] president has this kind of diverse CV.”
Only time will tell. What he does have on his side is a resilient people, the early support of opposition parties and a country with massive economic - and entrepreneurial - potential.