Small and Medium Business Development

This policy brief argues that while small businesses are critical for formal employment in South Africa, the sector is stagnant and severely under-supported by the government compared to large businesses. It proposes a shift toward an "economic deal" (Quadrant IV) involving economy-wide reforms, including tax incentives for startups, tenure reform in Traditional Authority Areas, telecommunications liberalization, and the use of competition policy to open market access for SMMEs.

• The National Development Plan (NDP) targets small and medium businesses to create 90% of new jobs by 2030, totaling approximately 9.9 million of the 11 million target jobs. However, the IEJ describes these growth expectations as "highly optimistic, and even unrealistic," noting that between 1.3 million and 7.9 million new enterprises would be needed depending on failure rates.
• While small formal businesses employ 4.3 million people—more than the 3.6 million employed by approximately 30,000 large formal businesses—the sector has remained stagnant or decreased over the last decade. South Africa also exhibits one of the lowest rates of established business ownership globally, where established businesses are defined as those operating for 42 months or more.
• Government financial support is heavily skewed toward large businesses. According to 2016 Statistics South Africa data, large businesses receive 79.5% of government subsidies and incentives and 98.2% of capital transfers. In contrast, small businesses receive only 9.9% of subsidies and 1.39% of capital transfers, while medium businesses receive 10.6% and 0.41% respectively.

APA

Hassen, E.-K. (2018). Small and Medium Business Development. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2020/07/Stream-3-Policy-Brief-2-Small-and-Medium-Business-Development-1.pdf

Chicago

Hassen, Ebrahim-Khalil. Small and Medium Business Development. Institute for Economic Justice, 2018. https://iej.org.za/wp-content/uploads/2020/07/Stream-3-Policy-Brief-2-Small-and-Medium-Business-Development-1.pdf.

Wikipedia

{{cite report |last1=Hassen |first1=Ebrahim-Khalil |title=Small and Medium Business Development |publisher=Institute for Economic Justice |date=August 2018 |url=https://iej.org.za/wp-content/uploads/2020/07/Stream-3-Policy-Brief-2-Small-and-Medium-Business-Development-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hassen2018small, author = {Hassen, Ebrahim-Khalil}, title = {{Small and Medium Business Development}}, institution = {Institute for Economic Justice}, year = {2018}, month = aug, url = {https://iej.org.za/wp-content/uploads/2020/07/Stream-3-Policy-Brief-2-Small-and-Medium-Business-Development-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }