Access to credit still easy in South Africa

Woman in small shop Ghana

According to the World Bank‘s 2013 Doing Business Report, South Africa has been joint-ranked, along with Malaysia and the United Kingdom, as the easiest country in the world for small and medium-sized enterprises (SMEs) to access credit.

Gerrie van Biljon, executive director of Business Partners Limited, says that this will be the third year in a row that South Africa has achieved the ranking and that that it is a very encouraging sign for small business owners locally.

He says that there is however evidence that a lack of SME financing still exists, despite the reported easy credit access. “Access to finance remains the number one hindrance for SMEs, regardless of this high rating. This is most likely due to the fact that SMEs are unsure of how to apply for finance, or that they do not qualify for the type of financing that is available. It is therefore of utmost importance that SMEs understand the stringent credit conditions that need to be fulfilled to obtain financing.”

via Access to credit still easy in South Africa – World Bank report.

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African free trade area

Definition of Sub-Saharan Africa, according to...

In sub-Saharan Africa 36 of 46 governments improved their economies’ regulatory environment for domestic businesses in 2010/11‚ which is a record number since 2005.

The World Bank said this was good news for entrepreneurs in the region‚ where starting and running a business was still costlier and more complex than in any other region of the world.

African leaders have called for a continental free trade area by 2017 to boost trade within the continent‚ which should further boost the opportunities available to SA companies.

via News | SA gains one position in ‘Ease of Doing Business’ | Bizcommunity.

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Making jobs for people

JOHANNESBURG, SOUTH AFRICA - JANUARY 21:  In t...

“The real issue is not the target, the real issue is can we mobilise all of the South African resources… in order that all of us do what we can to put people into some kind of job,” Gordhan told the Foreign Correspondents Association in Johannesburg.

This included government, business and civil society.”We are not doing enough in South Africa as a whole,” he said.

The government had set the target of five million jobs by 2020, but Gordhan said it was more important to get everyone into some kind of job.

“In respect of our younger people, to have the basic experience of working, that is the objective at this point in time.”

Job creation was not the sole preserve of government, he said.

“You cant just look at government, because 70% of those jobs must come from the private sector.”

Its the private sector that must create jobs. For them to do this they must invest.”Gordhan said businesses had around R500 billion in profit surplus lying in banks, which they should be investing. Business, however, was risk averse, which he said was to some extent understandable.

Recent comments by First National Bank CEO Michael Jordaan were quite instructive, Gordhan said. Gordhan said Jordaan had said South African businesses needed to take a medium or long-term view, not just react to short-term risks.

“There are immense prospects that other countries are seeing on the African continent, that we ourselves are not seeing adequately,” Gordhan said.Business should also be taking advantage of opportunities offered by South Africas membership of BRICS – the Brazil, Russia, India, China, South Africa economic partnership.

Gordhan said there needed to be frank talk about what was holding up investment, especially as the economy was recovering.

“The globe is not going to collapse… after every crisis there is a recovery. We are in a period of recovery, just a very uncertain one… [its] not very smooth.”

When asked whether South Africas labour laws were restricting job creation, Gordhan said there were efficient structures in South Africa for raising these issues.

“Whichever side has concerns should use those forums and create a climate for dialogue… and resolution so that we can move ahead.”

He said international organisations had different views on whether South Africas labour legislation was rigid.

“And by and large the view would be that we are not an overly rigid economy.”

He said anyone with concerns about the proposed labour law amendments should approach Labour Minister Mildred Oliphant as she had an open door.

The Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bill were adopted by Cabinet last month. They would now be considered by the Parliamentary portfolio committee on labour before being submitted to the National Assembly and the National Council of Provinces for adoption.

This was after over a year of debate on the two bills in the National Economic Development and Labour Council.

via All of South Africa needs to create jobs: Gordhan – Times LIVE.

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African free trade area

English: Map of the African Union with suspend...

AMBITIOUS PLANS to create a continental free trade area in Africa, first suggested 21 years ago by regional leaders, were recently adopted by the African Union. The union says the free intra-African economic trading system should be operational by 2017.

On January 31st at the union’s 18th summit in Addis Ababa, Ethiopia, governments were told they needed to build infrastructure worth an estimated €46 billion over the next 10 years to facilitate the free trade zone across the continent.

While this target was acknowledged as challenging, Ethiopian prime minister Meles Zenawi was mandated to lead a seven-member heads of state committee, called the high-level African trade committee, to look into ways of raising the funds required.

Africa, my dream.

The taxation of aid money in Africa, taxes from minerals and mining deals and revenues drawn from dealings with banks and multilateral bodies have all been suggested as ways to fund the continental trade boost.

“We are determined to address the issue of stability and lead to the prosperity of our continent,” African Union chairman Yayi Boni said. “We have to ensure growth rate is above the population growth in Africa.”

The development of trade between African states has increasingly become a priority for the African Union because of its member states’ inability to tackle widespread poverty, despite annual economic growth rates above 5 per cent in many member states over the past decade.

Although African economic growth slowed in 2009 due to the global recession, regional gross domestic product (GDP) was well above rates posted in countries in Europe and the US.

By 2010, the continent had bounced back with GDP doubling to 5.4 per cent that year, according to the World Bank.

Nevertheless, despite this success South African president Jacob Zuma has pointed out that less than 10 per cent of Africa’s trade is between its states and that boosting this area should be a priority as a way to further develop the continent.

via Major challenges remain for African free trade area – The Irish Times – Mon, Feb 13, 2012.