Challenges, business opportunities, and support required by MSMEs and Co-operatives in the national priority sectors
Micro, Small and Medium Enterprises (MSMEs) and Co-operatives play a crucial role in economic and sustainable development through their significant contribution to Gross Domestic Product (GDP) and employment in the country. In 2022, the International Finance Corporation (IFC) projected that MSMEs and Co-operatives account for more than 90% of all formal businesses in South Africa, employ 50% to 60% of the labour force, and contribute 34% to the country’s GDP. There is a clear level of participation by MSMEs and Co-operatives in the national priority sectors and there are challenges and opportunities for them to competitively participate. Though there is some information on the challenges and opportunities which MSMEs and Co-operatives face, the Department of Small Business Development (DSBD) has specific data needs for support interventions and programmes for MSMEs and Co-operatives in the country’s economic priority sectors. The Department is responsible for ensuring increased contribution by MSMEs in priority sectors to meaningfully input to the economy.
Mthente Research was appointed to conduct a research study on the challenges, business opportunities, and support required by MSMEs and Co-operatives in the national priority sectors focusing on the short, medium and long-term, on behalf of the DSBD. Through a mix of quantitative and qualitative research, coupled with key literature available in the public domain, Mthente produced an insightful report that assessed and interrogated challenges faced by MSMEs and Co-operatives, assessed and prioritised relevant and applicable opportunities for MSMEs and Co-operatives, evaluated the support (financial and non-financial) provided for MSMEs and Co-operatives and proposed interventions for improvement of financial and non-financial support in four national priority sectors, which included the mining sector, agricultural sector, manufacturing sector and tourism sector.
