Unsustainable: 7mil sustain 15mil

Unemployment remained one of South
Africa’s key challenges going forward, and
entrepreneurship could play a significant role
in reaching the target of five-million new jobs
by 2020, said financial services group Absa CE
for retail and business banking Bobby
Malabie on Friday.
With about 50% of the country’s youth
unemployed and 15-million people on social
welfare supported by 7-million taxpayers, the
situation was unsustainable, he said, as Absa
launched its Small and Medium-sized
Businesses (SME) Index.
Malabie also pointed out that the
consolidation of businesses through mergers
and partnerships and a number of businesses
folding owing to high operating costs and
other economic pressures made it difficult for
SMEs to employ more people.
The number of employers fell by 5 000 in the
second quarter of this year, Absa
commented, adding that the number of self-
employed citizens also dropped from 1.28-
million at the start of 2008, to 1.24-million in
the second quarter. However, this was a year-
on-year increase from 1.23-million in the
second quarter of 2011.
The new Absa SME Index, which extrapolated
data sourced from Statistics South Africa’s
economic indicators, found that about 270
000 of the more than 1.9-million businesses
employed five or more employees. Only 10%
employed more than 50 employees.
The index, Malabie said, aimed to provide
relevant information on the state and
development of SMEs and the challenges of
employment in South Africa.
“The Absa SME Index will provide valuable
information that allows SMEs to make better
and informed decisions with access to solid
and reliable information that will help them to
grow their businesses,” he said.
It would also enable policymakers to make
policy decisions aimed at SME development,
reducing high unemployment levels and
creating jobs.
Economist Mike Schussler , who worked on
the index, added that the index provided a
quick overview on how SMEs were fairing.

Source: m.engineeringnews.co.za/article/absa-launches-index-to-assist-sme-development-2012-09-14

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