Stella Ndabeni-Abrahams, the new minister of small business development, will have to hit the ground running to help the struggling sector following the collapse of many businesses amidst the Covid-19 pandemic.
Large corporations and thousands of small businesses have been most severely affected by the recent civil unrest last month, costing R50 billion in KwaZulu-Natal and Gauteng.
Ndabeni-Abrahams, was on Thursday, moved from the communications and digital technologies portfolio to assume responsibility of the small business ministry, during a Cabinet reshuffle.
This came after more than two years of failing to resolve legislative and regulatory bottlenecks at the communications department, with the Fourth Industrial Revolution also remaining largely unimplemented.
Momentum Investments economist Sanisha Packirisamy said this was not a sweeping reconfiguration of Cabinet, but it addressed urgent vacancies and likely strengthened the potential effectiveness of Cabinet at the margin.
Packirisamy said the implementation and delivery of key economic, regulatory and political reforms were of the utmost importance to sustainably place the country on a higher growth trajectory in the medium to longer term.
“And as such, it should be viewed as a market positive if a clear willingness to support the president’s reform agenda is observed in the months to come, following these appointments,” she said.
Ndabeni-Abrahams was obviously out of depth in her previous portfolio.
Her tenure was characterised by delays in the rollout of broadband, continued financial losses and closure of the SA Post Office branches, and hundreds of retrenchments at the State broadcaster.
A new communications minister Khumbudzo Ntshavheni, however, will be seen as bringing about an opportunity for positive change in this ministry.
Organisation Undoing Tax Abuse (Outa) chief executive Wayne Duvenage said Ndabeni-Abrahams should have not been reshuffled, but simply fired.
“Stella Ndabeni-Abrahams does not appear to have strong credentials in the area of stimulating and developing small business,” Duvenage said. “In our opinion, [she] should have been fired.”
The department of small business development has been punching below its weight for some time, with many SMME sector and informal traders formations decrying lack of support.
The efforts to revive the struggling small business industry were severely damaged by the riots and looting in July, leaving thousands jobless.
Intellidex’s head of capital markets research Peter Attard Montalto said “sticking” Ndabeni-Abrahams at small business will keep it underperforming.
“[It’s] a positive she is out of communications, but seems a waste to keep her in cabinet. This underperforming department is likely to remain so,” Attard Montalto said.
The Small Business Institute (SBI), however, threw its weight behind Ndabeni-Abrahams, saying she will build on a solid foundation to mainstream the SME agenda left by her predecessor.
“As an important voice in the SME ecosystem, we look forward to working with her towards making this important segment of the economy play its rightful role,” it said.
“In us, she has a reliable and willing partner for collaboration towards the success of all SMEs in our country.”