South African Business 2025

OVERVIEWDevelopment

OVERVIEWDevelopment finance andSMME supportCorporations encourage small-business suppliers.SECTOR INSIGHTThere are opportunities forSMMEs in road-building.Glencore hosts a Vendor Open Day in eastern Limpopo everyyear. The event, pictured, is a big occasion that is eagerlyanticipated by small-business owners in the area.Large South African companies typically look tosupport small businesses (and in some cases help to createcompanies) by subcontracting parcels of work to entrepreneursor small local enterprises. Support is delivered through two mainprogrammes: enterprise development (ED) and local supplierdevelopment (or procurement).Glencore Ferroalloys Eastern Limb operations actively seeks out smallbusinesses that can participate in the company’s supply chain and theannual event gives the community a chance to hear what the minimumrequirements are to become a supplier and what current opportunitiesare available. Topics included procurement processes, supplierregistration and news about various training programmes that areavailable to assist local businesses through the enterprise developmentprogrammes of Glencore’s two divisions, Glencore Coal and GlencoreFerroalloys. Glencore also supports an annual prize for promising youngentrepreneurs who are making an impact in their communities.In another part of Limpopo, the South African National Roads AgencySOC Limited (SANRAL) held a “Taking SANRAL to the People” stakeholderengagement session with residents and businesses of the GreaterGiyani Local Municipality, another example of a large company runningan information session about opportunities for locals. In this case, theprojects included upgrades toprovincial and national roadsin the area and a number ofroutine maintenance projects.It is part of SANRAL’s policy tosupport SMMEs which it does byroutinely awarding contracts formaintenance and other services.One the country’s biggestinstitutional investors is theIndustrial DevelopmentCorporation (IDC). Apart fromtaking stakes in large companiesin sectors like steel and agriculturethat have strategic significance,the IDC has a product called SMEConnect. A collaborative modelsees the IDC provide fundingand business support while acorporate might guarantee tobuy goods or services from thesmall business operator.The increased numberand scope of the Business DaySupplier Development Awardsgives an indication of howdeveloped this aspect of supportfor small enterprise has becomein the South African businesscommunity. Through the SparRural Hub, the retail groupsupports small-scale farmersand creates markets for theirproducts. The Spar Group hasestablished The Spar Academyof Learning where learnershipsSOUTH AFRICAN BUSINESS 2025 90PHOTO: Glencore

OVERVIEWEntrepreneur Bongani Maphanga of Tukakgomo in Limpopoworks hard at repairing and supplying school children withsturdy shoes. His initiative earned him a cash prize as a youthentrepreneur, which he hopes to use to create more jobs.and skills programmes are offered. This is to support the businessowners who take up the ownership model offered by Spar, which,unlike the franchise model, means that independent retailers havemore independence when it comes to decisions within the store andin terms of who to buy from.Funds and schemesIn 2023 the SA SME Fund set up its third fund, a dedicated venture capitalfund. The first close was reached with a figure of R700-million, achievedwith some support from the pension fund sector. The SA SME Fund is afund of funds, investing in fund managers who will support startups andnew ventures, rather than itself investing in projects. It was establishedwith the support of 50 of South Africa’s biggest companies and its firstfund had a broad remit, which included fintech, biotech and supportinguniversities in turning research into business ventures. The focus of thesecond fund was debt funding.As Hilary Joffe pointed out in Business Day, South Africa “ranksonly fourth in Africa” in venture capital, despite a strong private equityindustry. Joffe cited the SA Venture Capital Association, which reportedthat in 2021, the venture capital industry invested R1.3-billion in 129startups.In the North West, the Provincial Government is investing in digitalinfrastructure. SMMEs will be able to use the Mafikeng Digital InnovationHub as a co-working environment and to get support in using digitaltools. In Rustenburg Impala Rustenburg has invested R8.6-million in thedevelopment of an Economic Inclusion Centre that serves as a smallONLINE RESOURCESBusiness Day Supplier Development Awards: www.sdawards.co.zaIndustrial Development Corporation of South Africa: www.idc.co.zaNational Department of Small Business Development: www.dsbd.gov.zaSmall Business Institute: www.smallbusinessinstitute.co.zabusiness hub for SMMEs in andaround the mining community.Apart from the physical facilitieson offer, advice on market accessand funding is also available.Part of the rationale behinda national programme torevive industrial parks is tobenefit SMMEs. The NationalDepartment of Trade, Industryand Competition (the dtic)has invested R40-million in theNkowankowa Industrial Park inLimpopo, an initiative whichhas helped to create 174 directjobs. In the northern reachesof the province, more than 300jobs have been created with therevitalisation of the ThohoyandouIndustrial Park, which hasachieved a 91% occupancy rate.The dtic is trying to stimulatetownship and rural economiesthrough programmes such as theEnterprise Investment Programme(EIP). The National Departmentof Small Business Development(DSBD) has several programmesto assist SMMEs and co-operatives.The Small Enterprise DevelopmentAgency (Seda), a subsidiary ofthe DSBD, has 42 incubationcentres under its Seda TechnologyProgramme (STP).In Mpumalanga, Seda supportsseveral incubators: Furntech,furniture manufacturing, White River;Mobile Agro-Skills Development& Training, agricultural training,Nelspruit;Mpumalanga StainlessInitiative (MSI), stainless-steelprocessing, Middelburg (withColumbus Stainless); Timbalifloriculture, Nelspruit; Ehlanzeni TVETCollege Rapid Incubator RenewableTechnologies, Nelspruit. ■91SOUTH AFRICAN BUSINESS 2025