06 March 2019 - 05:04SA has a jobs problem. Despite impressive economic growth, unemployment reached a 10-year high of 28% last year. The country needs to create at least 11-million new jobs over the next decade just to absorb its currently unemployed population and keep pace with demographics.
Yet a recent study by the International Finance Corporation , “The Unseen Sector: A Report on the MSME Opportunity in SA”, reveals that more than 85% of the country’s MSME are not formalised, which means they aren’t registered enterprises nor registered with Sars. Many small businesses are creating opportunities for self-employment, while a smaller number of medium- to large-sized enterprises have the capacity to employ more people, thus capping job creation and economic contribution potential.
Second, the government and private sector need to work together to increase access to markets and finance. To do this, the cost of formalisation has to decrease substantially, and the benefits of formalisation should increase. This includes the cost of registering a business, compliance with regulation, and access to financial services.