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Moderate improvement forecast for SMEs in 2015: Gerrie van Biljon, Business Partners Limited

Economic growth expectations are round about 2%, 2.5%.

SIKI MGABADELI: In our SME feature today my colleague Tumisang Ndlovu speaks to Gerrie van Biljon, who is executive director at Business Partners Limited, about a moderate improvement forecast for small businesses in 2015.

GERRIE VAN BILJON: The biggest single challenge SMEs faced last year was the sluggish economy. There was a decline in new business and also existing business actually stagnated. The economy grew only a disappointing 1.5% last year. But this year seems a little bit different. The expectations are round about 2 to 2.5%.
   There are a few positives in my view that one should really take note of, and I think the biggest one is probably the issue of the oil price. The oil price virtually halved during the last period of time.
   But then we also have the US economy that is slowly busy with a recovery and we can see that China is still a major player in the world economy.
   So when it comes the SMEs, there are obviously positives and negatives. The biggest challenge in my view is that they have to plan their activities properly because of the interrupted power supply. This became a reality very quickly. It went through phases but I think we all realise that it is here to stay and proper planning is what it’s all about. Obviously it means that you either have to introduce alternative sources of energy or you need to adjust your operations such that if there is a power outage you can still supply the goods, still manufacture, etc.
   The next challenge I believe is really in labour. It’s still a challenge and we all know that labour can really cause a lot of damage in the economy.

TUMISANG NDLOVU: And the positive influences in this regard – what would you say those are?

GERRIE VAN BILJON: Well, a positive is definitely the oil price. As we know, fuel is a major input cost. If you look at the effect – and it seems like the oil price is going to remain at these levels or even reduce for quite some time – that to me is a major, major positive. I feel that we are shaking ourselves ready for the future.

TUMISANG NDLOVU: Speaking of those challenges, Gerrie, is red tape among the gridlocks faced by SMEs still?

GERRIE VAN BILJON: Unfortunately that is the truth. When we talk about red tape, that is really the process that it takes before you can get a VAT registration or you can get a licence from the authorities. But in my view it goes beyond that. It’s all about efficiencies. If you take, for instance, the time that it takes to get a clearance certificate from the local municipality, it is really counter-productive because nothing can happen if you don’t get a clearance certificate. And that’s only one example. Red tape is an inefficiency costing the country dearly and I think it’s time that we actually focus on this and encourage people. And if the private sector can play a role in actually assisting in the process, that will be wonderful because we all are looking to efficiencies at the end of the day for the whole country. It’s not a one-sided affair, meaning it’s not an issue that’s in the hands of the local authority alone.

TUMISANG NDLOVU: Lastly, Gerrie, how can business chambers assist SMEs in creating a conducive business environment?

GERRIE VAN BILJON: Chambers today play a vital role since they are actually the voice of the business people. They can influence the red tape, they can influence the lawmakers.

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