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SMME Job Creation in South Africa Report: A GEC+Africa 2024 Legacy Project

SMME Job Creation in South Africa Report: A GEC+Africa 2024 Legacy Project

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Boitshoko Shoke | January 24, 2024

The National Planning Commission (NPC) recently unveiled its ten-year review of the National Development Plan (NDP), revealing that the envisioned goals for South Africa outlined in the NDP have not been realized over the past decade. This lack of realization stemmed from the marginalization of the NDP, resulting in fragmented planning and ineffective implementation. Various factors contributed to the failure, including systemic issues amplified by events like the COVID-19 pandemic, inappropriate policies, declining governance, corruption, rising crime, and growing social fragmentation.

In response to the NPC’s 10-Year Review, this paper addresses the persisting challenges in South Africa, specifically focusing on inequality, unemployment, and poverty. The primary emphasis is on unemployment, one of the triple challenges outlined in the NDP. The paper aims to provide insights into the employment landscape within the South African Small, Medium, and Micro-sized Enterprises (SMME) sector. By analyzing various publications and data sources, it scrutinizes historical unemployment trends, evaluates the status and performance of employment creation, and assesses the feasibility of SMMEs reaching the NDP 2030 employment contribution target. The overarching objective is to offer actionable insights that align employment levels more closely with the NDP targets.

The NDP highlights the pivotal role of the SMME sector, particularly Small Business and Township Economies, responsible for generating 90% of all jobs in the South African workforce (NPC, 2023). Despite ambitious targets to reduce unemployment from 24% in 2010 to 6% by 2030, unemployment levels have surged over the past decade. Acknowledging the multidimensional challenge and the NDP’s broad approach, this paper provides a perspective on the achievements of interventions and outlines essential elements necessary to achieve the established targets.

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