Ahead of the ANC elective conference later this week, South Africans will be looking for a positive ending to a year marred by political and economic fallout. As the country watches and waits, speculation is rife about what the outcome will be, but according to Retail Capital CEO, Karl Westvig, stability and certainty is the silver bullet for the SME sector.
“A positive outcome will be an election that isn’t contested afterwards and an elected faction that is pro the economy. The upsides of this are enormous. We’ll get positive sentiment from consumers as they get back into the market to spend; SMEs will begin investing in their businesses again and larger corporates sitting on cash piles will also invest,” explains Westvig.
Westvig believes that a positive outcome will have a multiplier effect. “Corporates who begin investing will in turn use the services of SMEs. There’s no reason why we can’t have exponential growth in GDP in SA if this comes to pass.”
When it comes to politics and the economy, perception rings true. If the market perceives the duly elected new leadership as being anti-small business, disinvestment will follow. This will have a devastating impact on SME’s, which are the core engine of the economy, points out Westvig.
Asked what possible lifeline government could throw SMEs, Westvig says underwriting some of the risk would be a massive gesture. “For the sectors of the economy that are funding SMEs, government could do a lot by offering government-funded guarantees for SMEs. This will give banks and alternate lenders the ability to fund these SME’s where they ordinarily may not qualify.”