By TINTSWALO BALOYI
JOHANNESBURG, (CAJ News) – THE prevailing economic challenges afflicting South Africa must not deter plans to start new businesses, an economist has said.
Nedbank economist, Busiswe Radebe, said this at an event aligned to the Small Business Expo and #BuyaBusiness Expo set for later in August in Johannesburg.
The expo coincides with a technical recession in the first quarter of 2017 and slow economic growth forecast.Tough economic times have been forecast.
Nedbank forecasts growth of only 0,6 percent this year – marginally up on last year’s 0,3 percent and growth of under 2 percent over the next three years.
“Usually, to create jobs you need to see economic growth of around 5 percent. So currently, jobs are not really being created due to anemic growth and low levels of business and consumer confidence,” Radebe said.
While this may sound like bad news for small business, Radebe said new businesses and small businesses face risks and challenges whether they started during boom or bust times.
Slow economic growth does not necessarily mean business investments should be put on hold, she advised.Nedbank’s Q4 2016 Small Business Index showed that South African businesses were feeling the pressure of the ailing economy, with the cash flow confidence rating dropping in the quarter.
Slow payments, low economic confidence and exchange rate had a negative impact, particularly on the mining, agriculture, forestry and fisheries sectors.
According to the Nedbank Small Business IndexTM for the second quarter of this year, business confidence decreased dramatically in the first half of 2017.South Africa’s is the continent’s most advanced economy.
– CAJ News