As Finance Minister Enoch Godongwana prepares to deliver the Mid-Term Budget Policy Statement on Wednesday, he is in a position to signal decisive action that can unlock South Africa’s economic potential, says Nelson Mandela Bay Business Chamber CEO Denise van Huyssteen.

She says that the micro, small and medium enterprise (MSME) sector holds tremendous potential to drive inclusive economic growth, create jobs and stimulate innovation.

Yet, despite accounting for around 90% of formal business entities, contributing more than half of the country’s GDP, and employing more than 60% of the workforce, MSMEs remain constrained by excessive regulatory red tape, limited access to finance and markets, and inadequate business support systems.

“By prioritising meaningful support for the MSME sector, government can catalyse growth, job creation and investment confidence at a time when the economy urgently needs new momentum,” says Van Huyssteen.

“This is particularly relevant to small businesses operating in the metro and the Eastern Cape, which are also dealing with the knock-on economic impact of loss of business due to the contraction of volumes and restructuring activities we have seen in the manufacturing sector.

“These pressures have arisen due to a combination of factors, including the unreliability of electricity, water and sanitation infrastructure; political and municipal instability; rapidly declining safety and security; logistics inefficiencies; cheap imports entering the market and the uncertainty created by the US tariffs issue and geo-political shifts.”

In Nelson Mandela Bay, tourism is a low-hanging fruit which represents a particularly powerful yet underutilised opportunity for job creation and enterprise development, she adds.

To unlock this potential, however, the city must urgently address concerns around safety, security and cleanliness, in order to create a welcoming environment for visitors.

Tourism numbers remain well below pre-Covid levels, largely owing to the persistent concern about the Bay as an unsafe destination.

“Creating a safe, welcoming and well-maintained environment is, therefore, critical to reigniting the visitor economy and stimulating downstream business activity in sectors such as hospitality, transport and cultural services,” notes Van Huyssteen.

Equally, the digital economy presents a vital growth frontier for MSMEs, offering opportunities for innovation, remote service delivery and participation in global value chains.

With the right investment in digital infrastructure, skills development and broadband access, especially in townships, government can empower a new generation of tech-driven entrepreneurs and position the Eastern Cape as a hub for digital enterprise, says Van Huyssteen.

“Reducing unnecessary regulation and improving the ease of doing business must be a priority.

“A clear commitment to cutting through the bureaucratic burden would mark a significant step towards restoring business confidence, encouraging investment and stimulating enterprise growth.

“However, regulatory reform alone will not suffice. Structural barriers that stifle productivity and inhibit competitiveness must also be addressed through coordinated, practical measures.”