This year’s SONA was marked by the President’s announcement of plans for “radical
The budget speech, delivered by the Minister of Finance on Wednesday, gave us a more tangible idea of what this will mean for businesses. Both stressed the continued challenge posed by the divide between the previously advantaged and disadvantaged, and the policies they
The new top personal income tax rate of 45% for those with taxable incomes above R1.5 million may have a negative effect on investment. However, the rising prices of both food and fuel are likely to have a larger impact on SMEs, as the increased pressure on low- to medium-income households may drastically erode their purchasing power.
This may leave South Africa vulnerable to international political and economic crises if we do not shift our economy to be more
Food security continues to be a concern as food prices have risen by 16.5% in the past twelve months. The devastating
The agro-processing industry has long been a focus area for growth with little uptake, similar to mineral
Fortunately, the services sector saw impressive growth and has been critical in
South Africa clearly faces many economic challenges, but government’s commitment to nurturing SMEs – as set out in the NDP – is ongoing, with the 2017 budget allocating R3.9 billion over the MTEF period to encourage SME growth. Whilst specifics were not highlighted, it is expected that barriers of equity and suretyship will still hinder access to these funds which provides a market for those who are formally employed to partner with entrepreneurs, who may not have access to these critical elements required, to catalyse investment.
Tax incentives are in place to encourage mutually beneficial partnerships. The Employment Tax Incentive has been extended, though there is disappointment that the same was not done for the 12I Tax incentive which ends in December. The Manufacturing Competitiveness Enhancement Program – which helped the struggling manufacturing sector – also remains suspended due to a lack of funding.
True empowerment and transformation can only happen through the transfer of both equity capital and skills to operational partners of colour. With dwindling incentives, it is more important than ever that these partners be willing to work for their piece of the pie and be able to attract developmental capital.
As Moeletsi Mbeki, stated on a WITS Business School panel discussing the SONA: “South Africa has for the past 150 years…been in an Afrikaner- and African-nationalist mode. Both these nationalisms have reached the end of their road, and they have nothing to contribute to the future of South Africa.”