South African government on Thursday expressed concern that some of the small and medium-sized enterprises (SMEs) may not survive the COVID-19 pandemic.
Deputy Minister of the Department of Trade, Industry and Competition Nomalungelo Gina said this while delivering a keynote address at the visual Top Empowerment Conference.
Gina said the SMEs are the engine of the economy and employment because most of them are labor-intensive.
In March this year, Statistics South Africa released a survey that showed that out of 10.2 million employed South Africans, more than nine million are employed by SMEs.
She said SMEs would be forced to retrench and some have started doing that due to the loss of trade.
“Because they are most fragile in their balance sheets with no collateral to assist them in accessing credit even in times when the government has cut the base for lending rate. There is also a real danger of liquidity challenges, some companies may face closure and be forced to sell their larger percentages to non-black companies,” she said.
She called on the SMEs to use the fourth industrial revolution for their advantage.
“It is now more important to adapt, embrace innovation and technology solutions. Like Asian tigers rise like a typhoon in the ashes of the post Second World War, South Africa can lead the continent to build a resilient economy driven by a stable and rising environment for SMEs, especially black-owned enterprises,” she said. Enditem