What role can small and micro businesses play in achieving inclusive growth?

CDE small business report

  • Can small and micro businesses form the basis of a more inclusive economy in South Africa? To find answers to these questions, CDE convened a series of conversations with global and local experts in late 2020.
  • South Africa’s informal sector is very small compared to other African countries, contributing 6% to GDP and 17% of all employment. This is because the productivity differences between the formal and the informal sector are known to be much larger in South Africa.
  • Tweaking regulatory restrictions or providing various forms of direct support to small and micro firms may make little difference if the whole economy does not move onto a higher growth trajectory. We should avoid thinking about policies for small or informal or township firms in isolation from the broader economy.
  • The only way forward is to expand inclusion and growth. Doing one without the other will not get us to where we want to be.

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