SA business growth choked by rules and red tape

Singapore Chinese Chamber of Commerce & Indust...

OVERREGULATION and red tape are the biggest constraints to business expansion in SA, according to a survey by accounting, audit and advisory firm Grant Thornton.

The survey was based on the views of CEOs, chairmen and business owners in the fourth quarter of last year.Red tape was now as pervasive a problem in SA as in other Brics Brazil, Russia, India, China and SA countries, Grant Thornton Durban managing partner Deepak Nagar said yesterday.

The survey found 37% of privately held business owners in SA cited red tape as their chief constraint, followed by a lack of a skilled workforce, at 36%.

Durban Chamber of Commerce and Industry CEO Andrew Layman said the results were “spot on” and SA’s regulatory environment, for small businesses in particular, needed to be reviewed.

The increasing complexity of regulations such as additional tax or governance requirements, labour issues, black economic empowerment, the time taken to register companies or change directors’ names was stunting the growth of business, Mr Layman said.

The second-biggest constraint to business globally was reduced demand for products — the effect of economic problems in the US and Europe. In SA, the second-biggest constraint to business was a shortage of skilled staff, said Mr Nagar.

Keith Brebnor, CE of the Johannesburg Chamber of Commerce and Industry, said it had become “very intimidating” for young people to start a small business in SA because of the onerous regulatory environment. Dealing with crime and a lack of skills also added significantly to the cost of doing business in SA, he said.

via BusinessDay – SA business growth ‘choked by rules and red tape’

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