Absa has gone a step further by launching the Absa SME Index aimed at providing valuable information on the current state of SMEs in the country and the level and challenges of employment in South Africa.
The financial services group has already demonstrated its commitment to the growth and development of small and media sized enterprises through the launch of its dedicated unit for Enterprise Development in 2011. Since then, Absa has been working on identifying useful tools and sources of information that would help with the development of SMEs and the creation of much needed jobs in South Africa.
The Absa SME Index data is extrapolated from Statistics South Africa’s information on various economic indicators that are issued regularly.
Absa Group’s Chief Executive for Retail and Business Banking (RBB) Bobby Malabie says with the data collected to measure the number of people that have been employed by companies versus the unemployment figures in the country over the last two decades, it’s quite evident that unemployment remains one of South Africa’s key challenges into the foreseeable future.
“This is especially rife in the youth category where unemployment is as high as 50% and its clearly unsustainable taking into consideration that we have 15 million people on social welfare, but only 7 million are taxpayers,” says Malabie.
The Absa SME Index also shows that while only about 270 000 out of the more than 1,9 million businesses employ five or more employees other than the owner, only 10% of those businesses employ more than 50 employees and that is less than 4% of all employees.
Mr Malabie says while it may be easy to say we need more businesses to employ more people, unfortunately there has been a consolidation of businesses (mergers, and partnerships) while others have been forced to close down due to high operating costs and other economic pressures.
“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. The Absa SME index will also allow policy makers to make relevant policy decisions on SME development, high unemployment and job creation,’ he adds.
Economist Mike Schussler who worked on the Absa SME Index in partnership with Absa says the idea of the index is that one will get a quick overview from just one index on how SMEs are fairing.
Schussler notes with the latest data of the index that the Absa SME Index has dropped to its lowest level in 18 months as businesses feel the uncertainty that the cold winds of the world economy is bringing into South Africa.
“This probably also has to do with sluggish growth outside of the mining sector in the second quarter while most firms are in other sectors such as retail, manufacturing and construction.”
The latest employer figures show a decline by 5 000 employers in the second quarter compared to the first quarter where it stood at 700 000 employers.
The number of self employed also declined to 1 243 000 in the second quarter of 2012 from 1 281 000 in the beginning of 2008. Self employed numbers are however slightly up on a year ago when the number was 1 231 000.
Malabie says: “It is through entrepreneurship that this country will create the much needed 5 million jobs by 2020 - in every growing economy around the world, SMEs are the engine room of job creation. This SME Index is a further demonstration to our commitment of becoming part of the solution towards job creation.
Click here to view the Absa SME Index 2012 Fact Sheet
No comments:
Post a Comment