Minister Lindiwe Zulu Announces Launch of Research On the Impact of Downgrades on SMEs

Updated on 22 May 2017

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Today's Top Entrepreneurship and Business Stories (22 May)


Small Business Development Minister Lindiwe Zulu said research has been commissioned to see how South Africa can cushion small businesses against the shock of downgrades by rating agencies.

“Our hypothesis is that the downgrades will negatively impact small businesses and our cooperatives and their ability to absorb or recover from the potential shocks is limited,” Zulu said while tabling her department’s budget in Parliament.

“We have commissioned research and we will conduct stakeholder consultations in order to craft an appropriate response to the potential impact of the downgrade in this sector.”

The minister said despite the downgrades, her department has set a target for small, medium and micro enterprises (SMMEs) to increase its contribution to GDP (gross domestic product) from 40 percent to 45 percent.

Other ambitious targets for this financial year include boosting the number of SMMEs from 2.15 million to 2.56 million and increasing the number for jobs created through SMMEs from 7.33 million to 9.09 million.

Zulu said the majority of the R1.46 billion allocated to her department would be spent on transfers and subsidies. (via African News Agency)

dti, Woolworths, and IDC Collaboration Sees Doors Opening For Black Women Entrepreneurs

The trade and industry department (dti), Woolworths, and the Industrial Development Corporation (IDC) on Friday officially opened the doors of K-9 Pet Foods’ new 3600m² factory premises in the Western Cape.

“This opening is testament to the entrepreneurial spirit of a team of black women who put to test the intent of the black industrialist programme initiated by the dti and Woolworths’ commitment in contributing meaningfully to socio-economic transformation in South Africa,” the dti said in a statement.

After working in pet food production for 20 years aspiring entrepreneur Fazielah Allie – MD of K-9 – purchased a small and struggling business specialising in frozen pet food in 2014. Having worked with Woolworths before, Allie then approached Woolworths in the hopes of turning around her new business by securing a partnership agreement.

“Our priority was to leverage on a pet food opportunity to advance our import replacement strategy that seeks to replace providers of imported products and services with local black suppliers. Knowing Allie’s experience and entrepreneurial spirit we recognised that there was an opportunity to partner with her with the aim of establishing a South African produced supply of our Woolworths branded canned and pouched pet food,” Woolworths head of transformation Zinzi Mgolodela said in the statement.

With three black women at the helm, K-9 Pet Foods was an ideal fit for the Woolworths enterprise and supplier development programme which matches potential black-owned businesses to opportunities in the Woolworths supplier base. Various customised interventions, including both financial and advisory support, help the entrepreneurs in the programme to grow their businesses and create new jobs. Over the past three years, K-9 has grown from 11 to 32 employees.

Thanks to the partnership agreement to supply Woolworths, Allie was able to secure much-needed funding from the dti’s black industrialist’s incentive scheme to the value of R20 million and then an additional R31 million from the Industrial IDC. This funding has been used to expand their operation and purchase the latest state-of-the-art machinery so that they can meet Woolworths’ production requirements,” the dti said.

“The funding of this project not only assists in achieving the IDC’s objectives of facilitating job creation and import replacement, but is also an opportunity for K-9 to facilitate innovative technology which they have specifically designed for Woolworths,” IDC Western Cape regional manager Lizo Ntlhoko said. (via African News Agency)

Need for Greater Investments to Drive Data Explosion in Africa Highlighted

Experts at the International Telecoms Week conference in Chicago have highlighted the need to accelerate investment in Africa to facilitate the continent’s broadband data explosion.

Based on the theme “Achieving A Connected Continent: Leading The Data Explosion Across Africa”, the expert panel session with participation from Google, Facebook, WIOCCLiquid Telecom and Angola Cables discussed strategies for achieving improved broadband access across the continent.

The session reviewed the state of broadband infrastructure and data traffic trajectories in different countries on the continent and made comparisons to other markets globally. This included areas in which investments had been made such as submarine cables, data centers, and access networks including 3G, 4G and FTTH networks as some of the elements that have accelerated the growth in data traffic on the continent.

The consensus was that the data explosion will need to be driven by further investment in local networks to reach more end users rather than new submarine cables. The session revealed that while most African submarine cable systems had the capability to deliver 100 GBPS wavelengths, Africa has not utilized near enough capacity to saturate those systems. According to the panelists, for broadband to become more pervasive, there is a need for continued investment and innovative business models to aid the rapid deployment of access networks across the continent.

The panelists’ assessment of data center growth in Africa also indicated that uptake is not as rapid as experienced in other parts of the world and that most of the content consumed in Africa is hosted in Europe. Data center operators, MainOne and Liquid shared their experience that initial demand on the continent has been driven by enterprises and financial institutions as against other geographies where OTT players are the biggest data center players.

“We do not see any of these OTTs hosting their services from Africa. We are not seeing meaningful investments coming into Africa (from OTT players) and with the sizeable population of the continent, we need to see them play a larger role in the African ecosystem,” the panel concluded. (via APO)

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