Djibouti serves as a key refuelling and transshipment center, and is the principal maritime port for imports to and exports from neighbouring Ethiopia. What took my interest with this country is that it takes 48 Hours to Register a Business and be fully operational. Why does South Africa Refuse, and continue to refuse to Synergize our business systems? Who is benefiting if any? Why must we register and pay Tax at both Dti and SARS? Why is Small Business being Milked by our systems? I’m Perplexed.
Astonishing or Amazingly, you choose, to note was how South African Business lost around R79 Billion (2004) because of regulatory compliance or the proverbial Red Tape and bureaucratic jargon. The actual cost to the businesses was in access of 6.5% of Gross Domestic Product (GDP). You might correctly ask why the outrage ten years downs the line? The answer should be self explanatory. Ten years and no change.
Wait, I’ll explain GDP. It (GDP) also had me in a spin for a long time, partly because I’m not an economist and equally the fact that the majority of us were not schooled in economics to the point that we could comprehend its eventual benefits. Gross Domestic Product is the total value of goods produced and services provided in a country during a given year. The monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory. The formula used is as follows:
GDP = C + G + I + NX
Where:
”C” is equal to all private consumption, or consumer spending, in a nation’s economy
”G” is the sum of government spending
”I” is the sum of all the country’s businesses spending on capital
”NX” is the nation’s total net exports, calculated as total exports minus total imports. (NX = Exports – Imports) (Source: www.investopedia.com)
So, trust that this almost elementary approach to understanding why SA leadership refuse, obstinately so, to take away all the blockages in unleashing a Small Business Sector of note. The bottom-line has been articulated by a variety of distinguished scholars and researchers, it is the countries regulatory observance that will continue to cost South African Business, emerging and established segments, including the informal sector immensely. The government agrees with structured business formations that our country need to produce and shape an enabling milieu that will stimulate economic growth and job creation.
A number of institutions including a research house SBP has found evidence of how negative the business environment is because of the regulatory atmosphere, hence businesses cannot perform optimally. Their (SBP http://www.sbp.org.za) study (conducted in November 2004) is also a priceless reference in the growing discourse around the institutionalization and use of regulatory impact analysis in South Africa. Question is who will profit if the government would take audacious steps in addressing the ever increasing disparities between the rich and the poor? What will the real increase be to the economy of the country? Is it not the poorest of the poor that will ultimately gain from such actions? How can 16 million people on social grants be profitable to any intelligent country? It is not sustainable, I can even tell with my limited economic knowledge. The situation is screaming out for help!
More small business will be able to flourish and subsequently employ large numbers of the unemployed in an environment that assist them. An obvious consolidation of all funding agencies is needed; they all continue to operate in a vacuum or emptiness. The country’s wallet will experience a colossal relieve that is and will remain a pipe dream unless radical action is taken. I’m under no illusion. I’m fully aware that it will take a long time to find the correct economic mix. Macro economics versus Micro economics, it remains difficult because of the credit principal. But, as in the case of the NDP or (National Development Plan), many ANC NEC members are prepared to implement sections everyone agree on, likewise, government can change all the known factors that prohibit small business thrive which in return will fuel the economy. We don’t need big money to start with, we urgently need political will to produce these changes. The reimbursement of an enhanced regulatory milieu cannot be quantified in numbers. Research (in 2002) concluded that of 10 developing countries including South Africa, an apt dogmatic milieu was the solitary essential constituent in a fiscal and monetary growth strategy.
The World Bank (in 2004) undertook a study and found that many emerging economies could improve their annual growth rates by as much as 1, 4 percent if they created a world-class regulatory milieu for commerce. South Africa has made note worthy changes but an enhanced authoritarian organism is immediately needed.
In order for change to take effect, government will need novel tactics to improve the regulatory atmosphere which will need unorthodox or eccentric measures of intervention. Why we see an increase of red tape when new office bearer takes office is beyond me. We (SA) like the Israelites are causing an 11 day journey to take us 40 (20) years? The performance of government in terms of creating a conducive atmosphere in particularly for small business is culpable. So, I ask myself the question, will the poor view AMCU (Association of Mineworkers and Construction Union) as their Paragon and Epitome of authentic liberators? Will the e-toll law punish the ruling party in the 2014 elections? Well-informed, well designed regulatory reform presents an opportunity to accelerate growth and development that South Africa desperately requires. So, when will South Africa Exterminate Business Regulatory Red Tape?
Anthony Phillip Williams
Editor: SMME XCLUSIVE MAGAZINE
0726272080
1st October 2013
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