By Sizwe Dlamini
The Minister of Commerce, Industry, and Trade, Manqoba Khumalo, highlighted that an astonishing 99% of businesses that have received funding from various government funds cease to exist within the first five years.
Khumalo made these remarks during his address at the launch of the 2024 Entrepreneur of the Year Awards, last week.
He stressed the imperative for SEDCO’s involvement in mentoring entrepreneurs who access government funds such as the Regional Development Fund, (RDF) which received approximately E177 million from the government this financial year.
Despite this substantial investment, Khumalo noted that a significant proportion of businesses that had received funding in previous years were no longer operational.
Khumalo attributed this trend of failure to a lack of basic entrepreneurial skills and business acumen. He advocated for SEDCO to continue its efforts in providing skills training and mentorship programs to local entrepreneurs, aiming to enhance their chances of success and ensure the effective utilization of capital funds.
“I pose a challenge to the Chairman and CEO of SEDCO. I aspire to witness SEDCO actively engaging in all entrepreneurship initiatives within the country.
Some of these small businesses request items like tractors and receive assistance through government funds. However, a few months later, they cannot maintain these tractors, and some end up eventually selling them. Unfortunately, 99% of these ventures cease to exist within 3-5 years. Is this money well spent? I’m not sure. While politically advantageous, it might not be beneficial for the country’s economy.”
“What’s lacking? From my perspective, SEDCO is absent in these failed businesses. I envision a scenario where SEDCO actively engages in each of these initiatives. The same holds for the Youth Enterprise Revolving Fund (YERF). There’s a substantial amount of government funding allocated for young individuals, and notably, the RDF money is granted without the obligation of repayment, which is perhaps the challenge.” he said.