Huge potential for small business in South Africa
A stronger rand is South Africa's “buffering mechanism'“, according to Finance Minister Pravin Gordhan on Thursday night.
Addressing business people and community members at the Soweto campus of the University of Johannesburg, minister Gordhan said the stronger rand had eased the impact of higher oil prices on the local economy.
He noted however the concerns of exporters over the strong rand.
“What's the priority then? Exports or keeping inflation under control? These are decisions policy makers have to make every day,” Minister Gordhan said.
Responding to a question on government borrowing, the minister said South Africa's borrowings were ‘very controlled’ and that government did not ‘take excessive risks’.
“We borrow wisely, for the right reasons,” he said.
The National Treasury would ?in the next couple of months? meet with the banking industry in South Africa, Minister Gordhan said.
Small business organisations had in the past raised concerns that big banks' lending criteria to small businesses were too strict.
“There's huge potential for small business in South Africa,” Gordhan said. “If you really want innovation in our economy, all South Africans have to become engaged.”
During his budget speech in February, the Minister announced several financial and enterprise development programmes, as well as tax relief measures for the small business sector.
These included that from March 2011, the turnover tax for micro businesses with annual turnover of up to one million rand would be adjusted so that tax would be payable only if turnover exceeded 150,000 a year.
Micro businesses that registered for VAT would no longer be barred from registering for turnover tax from March 2012.
On growth, the Minister said South Africa needed new and bolder ways of growing its economy and creating jobs particularly for the youth.
Government said South Africa needed to grow at rates of around 7% per annum over the next 20 years in order to deal with unemployment and poverty.
“There's no textbook available to get to seven percent growth. South Africa needs to do something a lot more imaginative to get to 7% growth,” minister Gordhan stated.
