David Morobe | Executive General Manager | Impact Investing | Business Partners Limited | mail me |
Small and Medium-sized Enterprises (SMEs) are the backbone of South Africa’s economy. They contribute more than R5 trillion in turnover and account for roughly 34% of the country’s GDP.
SMEs also employ 11.4 million people. These vital economic engines drive innovation, create jobs and fuel growth across the nation.
In this context, 84% of SMEs expect their businesses to grow over the next 12 months. At the same time, 69% are confident the economy will support growth. Confidence in access to finance has also risen to 64%. However, cash flow, economic conditions and access to funding remain the top concerns.
Confidence that clients will pay on time sits at 72%, up three points year on year. This signals cautious but determined momentum despite ongoing pressures as entrepreneurs rise above the storm.
In the face of these challenges and opportunities, South African entrepreneurs continue to show remarkable resilience and resourcefulness. Yet resilience alone is not enough.
Beyond encouragement – the need for tangible support
“What SMEs need now is more than encouragement. They need tangible support,” says Trudy Maleka, founder of Ambesha Africa and 2024 Emerging Business Entrepreneur of the Year. Her call to action highlights the urgent need for a fundamental shift in how South Africa supports small businesses.
Maleka advocates for a comprehensive support ecosystem. This should include better access to funding, practical mentorship programmes, and skills development platforms. It should also involve meaningful participation in policy decisions that affect the sector. “We need a seat at the table when policies are made,” she emphasises. “No one understands SME challenges better than the people living them”.
The solution is not just about money. It is about creating an environment where businesses focus on growth instead of navigating bureaucratic obstacles. Simplifying regulatory processes is crucial. Business owners must channel their energy into building rather than battling red tape.
The power of mentorship and community
James Barrington-Brown, founder of NewSpace Systems and 2024 Innovator of the Year award recipient, reinforces the importance of mentorship and collaborative learning. “As the sole founder of my company, one of the best decisions I made early on was choosing an excellent business mentor,” he reflects. “It’s lonely and tough being a CEO. Having someone to bounce ideas off in a safe space made a massive difference”.
Barrington-Brown champions business incubators as powerful tools for SME development. “They don’t just offer affordable office space,” he explains. “They build communities where start-ups can learn from each other, share ideas and grow faster”.
For him, success in South Africa’s entrepreneurial landscape is not about a single breakthrough. It is about having the right ecosystem in place where entrepreneurs rise above the storm.
Government and private sector – a partnership imperative
The path forward requires close collaboration between government and the private sector. Maleka advocates for partnerships that can be “game-changers” for SMEs. The focus must shift from reactive support to proactive ecosystem building. This shift should address the fundamental barriers preventing small businesses from thriving.
Success stories – proof of concept
Both Maleka and Barrington-Brown credit platforms like our Entrepreneur of the Year® competition as pivotal in their journeys. These programmes show the transformative power of connecting entrepreneurs with mentorship, visibility, funding opportunities, and comprehensive support systems.
Since winning her award, Ambesha Africa has expanded its product range and secured shelf space with a major retailer. The business has also attracted new customers and talent. Meanwhile, NewSpace Systems continues to thrive under new leadership. Barrington-Brown has shifted his focus to nurturing several start-ups and scale-ups within South Africa’s emerging space sector.
Tapping the potential
These success stories highlight a broader truth. South Africa’s small business sector is brimming with potential.
With the right support infrastructure, entrepreneurs can turn challenges into opportunities. They can also create sustainable businesses that generate employment and drive economic growth.
The country’s SMEs have already proven their resilience and innovation. Now they need the ecosystem to match their ambition. This ecosystem must offer access to mentorship, funding, skills development and simplified processes. That way, entrepreneurs rise above the storm and focus on what they do best: building businesses that create value and jobs.
