Small business development minister Stella Ndabeni has identified weak local value chains and limited digital connectivity as two major challenges facing enterprises and producers in remote rural areas.
Addressing a business breakfast in the Wild Coast resort of Port St Johns on Monday, she said rural entrepreneurs needed better access to resources, infrastructure and markets to build sustainable businesses.
“Our communities have entrepreneurs working in agriculture, food production, retail, manufacturing, construction, transport, tourism, personal services, crafts and a wide range of other sectors,” she said.
“We must deliberately strengthen local value chains so that more of the economic activity generated in our communities benefits local enterprises.”
Ndabeni said government also needed to strengthen digital inclusion so entrepreneurs could use digital tools for payments, bookkeeping, marketing, inventory management, customer communication and online sales.
“Digital technology should not be seen as something reserved for large businesses. It is increasingly an essential tool for small enterprises seeking to improve productivity, reach customers and compete in changing markets.”
She said co-operatives could help rural entrepreneurs pool resources, share equipment, organise production, improve their bargaining power and access markets that might be difficult to reach individually.
More opportunities for local processing, packaging, storage and distribution of agricultural products also needed to be explored, alongside ways to supply larger buyers.
Local suppliers and service providers should similarly be given opportunities to participate in procurement and subcontracting linked to construction and infrastructure projects.
Public and private institutions also needed to remove unnecessary barriers preventing capable small businesses from competing for procurement opportunities.
For OR Tambo district, Ndabeni said, the challenge was to build an enterprise ecosystem connecting rural producers, township businesses, local institutions, established companies and emerging entrepreneurs.
However, sustainable access to markets remained one of the biggest obstacles facing small businesses.
“A business may receive training, equipment or financing, but if it cannot secure customers and generate consistent revenue, its long-term sustainability remains uncertain,” she said.
Large corporations, retailers, mining companies, agricultural enterprises, construction firms and public institutions all had a role to play in developing small-business suppliers, she said.
They should identify goods and services that local enterprises could supply and create structured opportunities for supplier development.
This included explaining procurement requirements, helping businesses meet quality standards, facilitating product testing and certification where necessary, and ensuring they understood the operational requirements of larger buyers.
Supplier development should not simply involve registering small businesses on procurement databases, she said. It should help them become capable, reliable and competitive suppliers.
Procurement opportunities also needed to be communicated transparently, without excluding emerging businesses through requirements disproportionate to the goods or services being procured.
Ndabeni said government could not build a thriving small-business sector alone. Municipalities, provincial departments, financial institutions, development finance institutions, established businesses, industry associations, training institutions and entrepreneurs all had a role to play.
Financial institutions needed to develop accessible financing for businesses that might not qualify for conventional loans. Large companies should open their supply chains and provide meaningful procurement opportunities, while municipalities needed to improve trading infrastructure, provide suitable business premises and simplify administrative processes.
Development agencies should strengthen business advice, mentorship, technical support and access to finance. Entrepreneurs, in turn, needed to improve their skills, business practices and ability to identify opportunities.
Ndabeni said her department was working through the Small Enterprise Development and Finance Agency (Sedfa) to improve access to financial and non-financial support for entrepreneurs seeking to grow their businesses.
Black Business Association president Luthando Bara urged small-business owners to familiarise themselves with opportunities available through agencies such as Sedfa.
Port St Johns Business Chamber chair Nzamela Ncoyini said political instability and a poor municipal water supply were making it difficult to do business in the town, particularly for tourism establishments.
