Small business in South Africa is incorporated in the collective category: Small, Micro and Medium Enterprises (SMME) (Ntsika, 1999:16). The SMME sector in South Africa comprises a significant contribution to both economic growth and employment. The sector currently boasts a 30% contribution to national GDP (Herrington, 2007). It also accounts for 73% GDP in the community, social and personal services category, and a prominent contribution (approximately 60%) to agricultural, trade and construction industries (Herbst, 2001:111). Furthermore, small business contributes 61% of total national employment (Herbst, 2001:112).1
Strong evidence certainly suggests of the potential influence that small business has on the success of the NGP. To date, it has been argued that small businesses are not adequately playing their expected role in the economy (Agupusi, 2007). This is due to a number of constraints, viz. policies which do not sufficiently deal with the semi-formal and informal business sectors, and the restrained capital allocations given by government institutions such as the Khula Fund and the Industrial Development Corporation (IDC) (Agupusi, 2007). With the revision of these drawbacks under the NGP, small businesses now certainly have an increased potential to be a greater engine for economic growth and employment creation. 3. NGP Policies: Micro- and Macr0-environment
In order to establish the strength of the NGP, it is necessary to study the various micro- and macro-environment policies which form the basis of the policy document. The fundamental policies include (but not limited to): competition, infrastructure, trade, procurement, financing and tax relief.
1 Estimates are subject to variation due to poor SMME data collection prior to year 2000. See Ntsika (1999:61) Entry No: 105
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The first identifiable manner in which the NGP proves to favour SMME-generated economic and employment growth is through its competition policy. In the president’s State of the Nation Address (2012), strong attention was directed to policy developments with a high domestic focus. Much to the benefit of SMMEs, the NGP has adopted a more pro-active stance by reiterating the need for a stronger domestic competition policy. The promotion of fair competition, including more stringent laws and financial consequences against anticompetition, is inherent to the success of small business (Etro, 2007a). The NGP’s adapted2 competition policy signals a greater effort to prevent price fixing, market division and collusive tendering, which often marginalises small businesses out of markets (Alexander, 2004:136).
One can further find indications of the success potential of the policy: Kampel’s (2004) 3 recommendations of the dire need to improve on the effectiveness of the prior competition policy, in relation to its time- and...