Understanding South Africa’s informal sector

Africa's informal sector plays a pivotal role in economic development, providing more than a third of local jobs. However, for this sector to reach its full potential, there is a crucial need for enhanced connectivity between small and medium enterprises (SMEs), businesses, and the government. In a recent interview on CNBC Africa, Noah Debeila, the CEO of SMME Chamber of Commerce, highlighted the importance of fostering stronger relationships to facilitate SMEs in fulfilling their roles as job creators and economic drivers. Debeila emphasized the significance of collaboration between SMEs and the government, stressing the need for enhanced compliance among entrepreneurs to access governmental support effectively. While acknowledging the common call for increased funding and assistance from SMEs, Debeila stressed the importance of entrepreneurs focusing on compliance to unlock opportunities provided by government agencies like CIDA and the Department of Small Business. Moreover, Debeila highlighted the need for the private sector to actively engage with small businesses, opening up new markets and integrating SMEs into their supply chains. He noted that collaboration between SMEs and the private sector could reduce dependency on government support and create additional avenues for growth and sustainability. One notable development in enhancing market access for South African SMEs is the recent Memorandum of Understanding signed between the SME Chamber of Commerce and the Embassy of the United Arab Emirates. This agreement aims to facilitate market entry for South African businesses into the UAE market and vice versa over a five-year period, demonstrating a commitment to fostering international business relations and expanding opportunities for SMEs. When questioned about the future outlook for SMEs under the current government, Debeila expressed a belief in the importance of entrepreneurial agency and accountability. While noting the potential changes with the introduction of a Deputy Minister and ongoing political dynamics, Debeila underscored the need for SMEs to seize available opportunities from various sources, whether governmental, private sector, or international markets. In closing, Debeila emphasized the proactive role that SMEs and entrepreneurs must play in driving the economic trajectory of South Africa. By taking ownership of their growth and actively pursuing diverse opportunities, SMEs can contribute significantly to the country's economic development and resilience.