March 2016 - Small and medium enterprises face various challenges in Africa, particularly in the construction industry. These include lack of financial and technical capacity; lack of access to construction projects and information; and poor cash flow due to slow payment from government, says Frans Pienaar, Chairman of Inyatsi Construction.
“However, the construction industry can help small and medium enterprises to overcome these challenges by assuming some of these burdens. In order to do this, the industry will need client bodies to support them.”
Pienaar would like to see incentives offered to business for helping small and medium enterprises. Business is, by definition, profit-driven and should small and medium enterprises have the potential to improve a larger company’s bottom-line performance, helping them will become a focus area.
“With volatile world markets and the adverse influence on developing economies, it is important to overcome the challenges faced by small and medium enterprises in the construction industry. If we overcome these challenges, it will create employment opportunities, improved technology, better quality and service delivery and a large capacity base which can be mobilised at short notice should the market grow quickly,” he explains.
Small and medium enterprises can support growth of economies in Africa and the rest of the world. With a very low overhead structure, these enterprises are ideally suited to be cost-efficient. Unfortunately, this can count against them as they struggle to get good deals from established business and cannot get the credit or the pricing that large businesses can arrange, Pienaar says.
He believes government should incentivise businesses to assist small and medium enterprises to ensure they also gain that competitive advantage. “Government and big business can also assist in ensuring small and medium enterprises obtain good deals in insurance and the financial markets. And government can ensure that projects run cash-positive to enable small and medium enterprises to meet their commitments and build a track record that will contribute to a good reputation in the market.”