Original Research

Assessing the impact of policies in sustaining rural small, medium and micro enterprises during COVID-19 pandemic in South Africa

Tshililo R. Farisani

Received: 13 Dec. 2021; Accepted: 06 May 2022; Published: 09 Dec. 2022

Copyright: © 2022. The Author Licensee: AOSIS.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Background: The coronavirus disease 2019 (COVID-19) pandemic has persistently threatened the survival of rural livelihoods everywhere in South Africa. This may have adverse effects on the implementation of policies and strategies that support rural small medium and micro enterprises (SMMEs). Rural-based local institutions and their policies play major roles in sustaining rural SMMEs and livelihoods during disasters and yet there is little research to provide future directions.

Aim: This article aims to contribute to an understanding of the impact of the implementation of present and past SMME policies in sustaining rural livelihoods during disasters in South African rural municipalities.

Setting: This research focussed on institutions and their policies in the Jozini Local Municipality and Matatiele Local Municipality. These rural-based local municipalities in South Africa were chosen as relevant case studies for this study because of their experiences with frequent fire and drought crises or disasters.

Methods: The study employed a qualitative research methodology. In line with the interpretative paradigm, a social network analysis, together with one-on-one interviews, were chosen as research instruments for the collection of data from two rural municipalities. NVivo 12 was used for data analysis.

Results: The findings of the study revealed that, while policy and legal frameworks are in place to support SMMEs, in reality, very little support (during disasters) trickles through to rural-based SMMEs.

Conclusion: The conclusions drawn from this study revealed that, in the absence of provincial and nationally based institutions to ensure the implementation of their policies, rural SMMEs established alternative processes to sustain their SMMEs during disasters.

Keywords: SMME policy implementation; socio-economic crisis; collaboration; rural; SMME sustainability.

Introduction

The coronavirus disease 2019 (COVID-19) pandemic threatened the survival of many rural livelihoods and small medium and micro enterprises (SMMEs) across the globe (Afshan, Shahid & Tunio 2021; Alon, Farrell & Li 2020; Cortez & Johnston 2020). As a result of the pandemic, the implementation of policies and strategies in various governments globally has been put to the test in a way that has never been seen before (Ratten 2020). The way institutions implement policies to respond to disasters such as COVID-19 is therefore crucial in sustaining livelihoods and businesses. Drawing from this understanding, this article aims to contribute to an understanding of the impact of the implementation of present and past SMME policies in sustaining rural livelihoods in South Africa. Jozini Local Municipality (JLM) and Matatiele Local Municipality (MLM), which are rural-based local municipalities in South Africa, were chosen as relevant case studies for this study because of their experiences with frequent fire and drought crises.

Mahadea and Kaseeram (2018) detailed several challenges experienced by SMMEs in poverty-stricken areas in South Africa. Many poverty-stricken communities in rural municipalities have been a focus of the new South African government’s (post-1994) policies. Ssekitoleko and Du Plesis (2021) concur and point out that the aim was and remains to be redressing the imbalances of the past and implement a developmental local government to create jobs, grow the economy and mitigate poverty using SMMEs. Mazibuko (2013) affirms and further argues that pre-1994, the institutions of the former apartheid government in South Africa were directly used to suppress the indigenous black majority’s livelihoods options by advocating for policies that disempowered them. According to Mazibuko, the 1913 Land Act (also known as the Natives Land ACT, 1913) had relevant authoritative institutions to enforce policies that were adopted under it. All the above-mentioned studies (i.e. Mahadea & Kaseeram 2018; Mazibuko 2013; Ssekitoleko & Du Plesis 2021) reported on various challenges that South African SMMEs experience but did not provide future policy implementation directions to rural-based institutions.

Dubihlela and Van Schalkwyk (2014) hold that the sustainability of livelihoods through SMMEs is a challenge in many rural communities. Nevertheless, this study has many loopholes as it failed to properly advise on the possible strategies or policies rural SMMEs can adopt to sustain themselves during a crisis. However, the major weakness of their work is that it blames rather than suggests practical solutions that could resonate with rural practitioners during a crisis. In their study, Dubihlela and Van Schalkwyk (2014) blame both the post-1994 national and local government institutions for unclear procedures that rural SMMEs can follow to access institutions meant to support SMMEs in their areas during a crisis. Nevertheless, Bhorat et al. (2018) corroborate this observation and add that the exclusion of the rural SMME stakeholders in policymaking and implementation in the new South Africa is the root of many challenges that militate against sustainable rural livelihoods through SMMEs. In their own words, Bhorat et al. (2018) contend further that:

[T]he majority of SMME owners did not participate due to lack of information – either because they did not know the programme existed or because they did not know whom to contact. (p. 46)

Despite not offering solutions, the work of Bhorat et al. (2018) points to a need for further research on how to ease the challenges associated with processes that have been used to empower SMMEs with the hope to sustain rural livelihoods pre- and post-socio-economic crisis.

Love (2003) is among the researchers in the last two decades who have emphasised the need for a greater understanding of the policy implementation process as a way of effectively addressing the barriers to policy implementation. In motivating further research in policy implementation processes, Bhuyan, Jorgensen and Sharma (2010) pointed to three reasons why the policy implementation process matters: it promotes accountability, enhances effectiveness and fosters equity and quality. Patnaik and Shambu (2014) agree with this view while stating:

[T]o provide policy directions, there is need for a bridge in the gap between understanding of SLA and implementation of rural livelihood mission. There seems to be a little interface between practitioners and academics in jointly understanding rural livelihood systems. (p. 356)

It is against this backdrop that this research is conceptualised, that is, to explore and understand the complexities of SMME policy implementation within a rural municipality context to provide recommendations on how SMME policies, plans and strategies can significantly contribute to sustainable livelihoods during this era of COVID-19 pandemic and beyond.

The original contribution to knowledge in this study lies in the proposed framework and suggestions to guide the implementation of SA rural SMME policies. In building such a framework, the important concepts of sustainable livelihoods framework (SLF) and institutional theory are introduced first. The rural SMME friendly policies are then also introduced and discussed through SLF and institutional theory lenses.

Theoretical context

Conceptualising the sustainable livelihoods framework

The first published reference to sustainable rural livelihoods was made by R. Chambers and M.S. Swaminathan in their contribution to the Brundtland Commission in 1987 (Conway 2011). According to Kollmair and Gamper (2002), the origins of the sustainable livelihoods approach (SLA) can be traced back to the work of Robert Chambers in the mid-80s, who developed the approach to advance development cooperation between relevant poverty reduction stakeholders. Haida (2009) explains that the SLA approach made significant advances in the early nineties as a development concept to understand food security and famines. Sustainable livelihoods approach is therefore well placed to assist in understanding rural-based local institutions and their policies in sustaining rural SMMEs and livelihoods during disasters.

Kollmair and Gamper (2002) point out that Chambers’ concepts of SLA were developed in 1997 by the British Development for International Development (DFID) in their development cooperation programmes. Elasha et al. (2005) assert that the 1992 United Nations (UN) conference on Environment and Development further developed the approach and advocated that it be included in a broad goal to fight poverty. Elasha et al. (2005) elaborate further by indicating that SLA continues to gain recognition and is used by development practitioners as a framework to understand different perspectives of livelihood improvement.

The SLF (see Figure 1) is one of the best frameworks to understand events during and post socio-economic crisis because of its ability to allow the user to examine the impact of institutions, their policies and processes on the livelihoods of people (Toner & Franks 2006).

FIGURE 1: The sustainable livelihoods framework.

Smyth and Vanclay (2017:68) provide us with a better understanding of Figure 1 through a comprehensive definition of the SLF. Smyth and Vanclay (2017) state:

In its simplest form, the framework views people as operating in a context of vulnerability. Within this context, they have access to certain assets or poverty-reducing factors. These gain their meaning and value through the prevailing social, institutional and organizational environment. This environment also influences the livelihood strategies – ways of combining and using assets – that are open to people in pursuit of beneficial livelihood outcomes that meet their livelihood objectives. (p. 68)

Figure 1 is particularly important in this study because it clarifies the roles that institutions, through their policies, can provide viable assets during disasters to sustain SMMEs and livelihoods.

Nevertheless, there are criticisms concerning power-related problems experienced by the marginalised institutions or individuals levelled against SLF (Baumann & Sinha 2001; Carney et al. 1999; Mazibuko 2013). Thus, another theory that may be important in underpinning the understanding of the impact of institutions and their policies will be important for this study. Institutional theory is therefore proposed as a well-placed theory to fill some of the gaps identified in the SLA approach. This is because the Institutional Theory’s two elements (regulative and cultural-cognitive) can expand the condensed social factors and provide solutions to power relations problems during policy planning, implementation, monitoring and evaluation. The institutional theory will be used in this study as a supportive lens to review the impact that SA’s SMME policies, strategies and relevant implementing agencies have on the rural SMMEs.

Institutional theory

New institutionalism has been famously unpacked first by authors such as Meyer and Rowan (1977) through their article titled, ‘Institutional organizations: Formal structure as myth and ceremony’. DiMaggio and Powell (1983) were second to weigh in with their article ‘The Iron Cage Revisited: institutional isomorphism and collective rationality in organizational fields’. New institutionalism views institutions as collective cognitions that would over time rise to the degree of social correction. This is what makes new institutionalism more relevant to this study as it reviews the impact that institutions (which have rural and national footprint), as well as their legislation, strategies and policies, have on the rural SMMEs’ sustainability. This is where elements of the institutional theory come in. There are three elements of the institutional theory that impact institutions. These are known as regulative, normative and cultural-cognitive pillars (Scott 2013).

Table 1 summarises the three elements of institutional theory and allows for clarification as to why the regulative element and cultural element are chosen for this study. The regulative element’s focus is on the institution’s policies, legislation and rules, while the cultural element’s focus is on the institution’s shared values, beliefs and assumptions.

The regulative element allows for the analysis of the impact of institution’s policies, legislation and rules on the rural SMMEs during and post-crisis, while the cultural cognitive element allows for the analysis of the impact of shared values, beliefs and assumptions of the institutions that support rural SMMEs during and post-crisis.

Research design and methods

The study employed a qualitative research methodology. An interpretive paradigm was chosen for this study because of its ability to provide an understanding of people’s lived experiences (Chilisa 2011; Mertens 2009). In line with the interpretive paradigm, a social network analysis (SNA), together with one-on-one interviews, was chosen as research instruments for the collection of data from two rural municipalities. The study was conducted (as part of a PhD research project) in a space of 2 years during which both primary and secondary data were collected. Secondary data were collected throughout the study period while primary data were collected in 6 months from two municipalities about 800 km apart. This meant that time was set aside for each local municipality (Jozini & Matatiele Local Municipalities) that had more participants confirming their availability.

Purposive sampling was used in this study. Because of the nature of rural areas whereby institutions are not properly documented and are scattered, it was important for the snowball sampling to be carried out to supplement purposive sampling. Snowball sampling assisted in identifying institutions that could give further corresponding information or other rural SMME supportive institutions that the researcher was not familiar with, but which other participants knew as they worked together for local SMME sustainability. Both articles of Jaja, Dawson and Gaudet (2017) and that of Ennis and West (2010) agree in pointing out that the SNA tool is instrumental in identifying existing and potential institutions’ connections. Social network analysis was particularly important in that it allowed the researcher to go further than with a semi-structured interview tool. Social network analysis goes further because it allowed the participants to correct and remind each other (cross-check) important aspects of policies or rules and assets. Thus, SNA was particularly important in identifying institutions and policies or rules that bring or assist with dispersing crucial assets during disasters to sustain SMMEs and livelihoods. A total of 69 participants that represented all stakeholders (see Table 2) in the study areas were interviewed. Eighteen of such participants were interviewed from MLM using SNA and 16 of such participants were also interviewed from MLM using SNA. The balance (from 69) of the participants were interviewed using semi-structured interviews (see Table 2). All institutions and structures (see Figure 2 and Figure 3 in the findings section below) were represented in line with Jensen and Jankowski (1991) guide. That is, all leaders or stakeholders who availed themselves to represent their institutions were interviewed in both municipalities.

FIGURE 2: Summary of Jozini Local Municipality’s small medium and micro enterprises social and institutional networks.

FIGURE 3: Summary of Matatiele Local Municipality’s small medium and micro enterprises social and institutional networks.

This study ascribed to the grounded theory (GT) analysis as defined by Strauss and Corbin (1990). In their own words, Strauss and Corbin (1990:7) defined GT analysis process as a process that begins with:

[O]rganizing data into discreet categories according to their properties and dimensions and then using descriptions to elucidate those categories and then theorizing, conceiving or intuiting ideas-concept –then also formatting them into a logical, systematic, and explanatory scheme. (p. 7)

That is, the process defined by Strauss and Cobin was followed after the recorded information was transcribed. NVivo 12 was used to analyse the vast data collected because of the software’s ability to analyse different types of data. Bazeley and Jackson (2007) corroborate by pointing out that,

[T]he efficiencies afforded by software release some of the time used to simply ‘manage’ data and allow an increased focus on ways of examining the meaning of what is recorded. (p. 22)

NVivo 12 made it possible to import and analyse and present the data collected during fieldwork using semi-structured interviews, social network analysis, pictures and secondary data.

Ethical considerations

This study followed all ethical standards according to the University of KwaZulu-Natal guidelines, reference number: HSSREC/00000253/2019. All participants signed the consent form and participated voluntarily. The respondents were assured of anonymity and that the information gathered was for research purposes only. To ensure validity and reliability in this study, the researcher followed Bougie and Sekaran (2009)’s guide. Bougie and Sekaran (2009) point out that the validity and reliability of a study depend heavily on two aspects: how the tools of collecting data were administered and whether the tools chosen can capture the relevant data that the researcher is looking for. The researcher ensured that two different types of tools were used to collect data and that one tool was used to follow up and validate the findings of the first tool. Triangulation was therefore used to validate the collected data repeatedly during the fieldwork. Table 2 provides a summary of data collection and sampling showing participants and tools used as explained above.

Findings and analysis

This part of the study presents the findings and analysis of the study. The objective of this article is to contribute to an understanding of the impact of the implementation of present and past SMME policies in sustaining rural livelihoods during disasters in South African rural municipalities.

Implementation and challenges of small medium and micro enterprise policies, laws and regulations in the promotion of rural smal medium and micro enterprises

The first in the SMME policies, laws and regulations to be discussed is the Broad-Based Black Economic Empowerment (BBBEE) legislation of 2004 and the National Strategy on the Development and Promotion of Small Business (NSDPSB) in South Africa (1995). The leading institutions and organisations responsible for the implementation are presented in Figure 2 and Figure 3.

Broad-based Black Economic Empowerment and the National Strategy on the Development and Promotion of Small Business

Broad-Based Black Economic Empowerment and NSDPSB were passed to empower previously disadvantaged communities to participate in the local and national economy. Small medium and micro enterprises in the JLM and MLM have also been impacted by the above-mentioned national legislation.

The leading institutions and organisations responsible for the implementation of National Strategy for the Development and Promotion of Franchising (NSDPF) and National Informal Business Upliftment Strategy (NIBUS) in the study areas have been identified as the Department of Small Business Development (DSBD), Department of Public Enterprises, MLM, JLM (local business chambers), SMME representative institutions (these differ in each municipality), traditional authorities and NGOs. The strength of the study areas is in the readily available land (natural resources) and the working force (human resources) that are available for future empowerment projects. The weaknesses identified (from the findings) are in the generalisation (by the national government) of the two empowerment policies’ implementation guidelines and the inability of local officials to implement them locally. The generalisation and lack of implementation happen because of lack of or poor consultations. The senior Local Economic Development officer interviewed at JLM pointed out that such lack of or poor consultations impact the sustainability of rural SMMEs and livelihoods directly. He further states that the reason the tourism industry and associated rural SMMEs are struggling is that ‘it is not well marketed’ (Participant 2, Male, Jozini Local Municipality). He further remarks concerning the poor effort of all relevant departments to work together in empowering rural SMMEs saying ‘it is still at a very small scale’ (Participant 2, Male, Jozini Local Municipality). The local traditional leader interviewed was also of the view that relevant departments that are crucial in sustaining rural SMMEs during disasters were simply not consulting with relevant rural stakeholders. He points to an existing example where the community indicated they need national or provincial water department offices to have offices in the areas most affected by drought, but their views are being ignored. In his own words, he states that: ‘What we would like them to do is for them to bring Umhlathuzi closer. It is currently based in Empangeni. Empangeni is not complaining about water, we are’ (Participant 4, Male, Jozini Local Municipality). Empangeni is about 200 km away from the area that is being referred to by the respondent. The findings further reveal that the impact of BBBEE and NSDPSB on rural SMMEs has been slow except for Mnothophansi associated small-scale farmers at JLM. Next to be presented in the findings section are the NSDPF in SA (2000) and the NIBUS (2013).

National Strategy for the Development and Promotion of Franchising and National Informal Business Upliftment Strategy

National Strategy for the Development and Promotion of Franchising and NIBUS are critical pieces of legislation in that they enable the rural SMMEs to access the market regardless of size or previous economic participation record. Thus, small informal businesses are not only recognised but assisted (through the provision of resources or assets identified in the SLF) to thrive.

The leading institutions and organisations responsible for the implementation of NSDPF and NIBUS in the study areas have been identified as the Department of Trade and Industry, DSBD, Small Enterprise Development Agency, Small Enterprise Finance Agency, ANDM, MLM, JLM, SMME representative institutions, NGOs and local retailers. The strength or positive developments from the collective efforts of the stakeholders in the study areas is that in both MLM and JLM there are now opportunities for new markets and important business equipment. The leading participant from the MLM Local Economic Development tourism unit elaborated on how rural SMMEs continue to benefit from the opportunities generated as a result of good collaboration between key stakeholders. She stated that:

‘A good example is the Matatiele Music festival. At this event, Alfred Nzo District Municipality is the leading stakeholder we have. Alfred Nzo District Municipality assists with funding for the event. The event is structured in a way that benefits the local B&B/lodges.’ (Senior MLM Local Economic Development officer, Female, Matatiele Local Municipality)

She then continued:

‘But also, the other SMMEs selling meat, vegetables and alcoholic beverages find opportunities to sell their products. The licensed outdoor alcohol seller and braai meat supplier will have the opportunity to sell their products at such festivals. The local artists benefit the most and therefore few national artists are called to participate. The type of artist performing every year depends on where we want to create exposure/opportunities for the locals. So we have traditional singers, poetry, jazz and so on and so on.’ (Senior MLM Local Economic Development officer, Female, Matatiele Local Municipality)

This statement by the participant indicates that every stakeholder has a crucial role in the sustainability of rural SMMEs and livelihoods.

Local municipalities in both MLM and JLM have, in their implementation of the NSDPF and NIBUS strategies, successfully concluded franchising arrangements that benefit local SMMEs and local livelihoods. The JLM Local Economic Development interviewed proudly remarked that:

‘[F]armers have signed a partnership with Cambridge. Cambridge is going to take our products not only to this Cambridge store but to other Cambridge stores. Our produce will now go to other stores through the Fruit spot. Our farmers have signed an agreement with the Fruit spot. Fruit spot then takes the products to different stores. It won’t be a provincial, it will be national because Fruit spot operates nationally because it is under Massmart. ‘(Participant 2, Male, Jozini Local Municipality)

The weaknesses or negative developments identified are that there are challenges associated with politics and a lack of knowledge in accessing the resources made available through NSDPF and NIBUS. A positive impact of good collaboration between rural SMMEs is more evident in NIBUS’s success in JLM although the same cannot be said concerning MLM as far as physical resources are concerned. The positive impact is evident because of tractors, a truck, coldroom, solar panels and other physical resources that can be observed at Ndumo community local farmers’ site office site managed by Monthophansi.

National Development Plan

The analyses of the participants’ views and opinions are based on their experiences as far as the sustainability of rural SMMEs is concerned, that is, the National Development Plan’s (NDP) position in issues such as job creation, growing the economy and reducing the impact of inequality on the sustainability of rural SMMEs.

The leading institutions and organisations responsible for the implementation of NDP in the study areas have been identified as DEDEAT, Eastern Cape Province DRDAR, KwaZulu-Natal Provincial Department of Agriculture and Rural Development (KZN DARD), DSBD, MLM, JLM, local NGOs, local SMME representatives and traditional authorities. The strength or positive development from the collective efforts of the stakeholders in the study areas is the ability (expertise) to produce good-quality crops and good-quality meat that are ready for exportation despite challenges. The weakness or negative development identified is that the loss of income because of a combination of lack of new markets and poor infrastructure that weighs heavily on rural SMMEs. The impact of the weakness identified weighs heavily (i.e. slow the envisioned empowerment/sustainability process) on the implementation of all already discussed policies in this study.

Disaster Risk Management Act 2002 (Act no.57 of 2002)

The Disaster Management policy framework clarifies the roles and resources needed to sustain rural SMMEs. Resources are needed for fighting disasters such as drought, fire and possibly COVID-19. The participants’ views are based on their experiences as far as the sustainability of rural SMMEs is concerned, that is, how the key stakeholders are participating in the implementation of the legislation presented above.

All the stakeholders presented from the beginning of this section are considered key in ensuring there is enough participation in the implementation of every local municipality’s Disaster Risk Management Act 2002 (Act no.57 of 2002). The strength or positive development from the collective efforts of the stakeholders in the study areas is that local chiefs, small-scale rural vegetable farmers and livestock owners have devised local plans that allow them to survive local disasters.

The weaknesses identified are the local municipalities’ lack of staff capacity and funding to hire qualified firefighters and other disaster management staff. A senior councillor at JLM acknowledged that they do not have enough staff capacity. In his own words, he stated that ‘they are not enough’ (Participant 6, Male, Jozini Local Municipality). He further pointed out that they have ‘challenges getting funds’ (Participant 6, Male, Jozini Local Municipality) elsewhere to address the existing staff capacity challenges within the municipality.

A lack of a clear consultation process to address disaster challenges has also been identified as a major weakness. The MLM officer interviewed confused and interchanged concerning the roles played by NGOs and consultants that work for the municipality. Such confusion has also been observed from the NGO representative that works with the municipality. In her own words, she stated that: ‘We as the NGOs are the implementing agencies on behalf of the government’ (Participant 5, Female, Matatiele Local Municipality).

Nevertheless, the undesirable impact of such a lack of a clear consultation process has led local rural stakeholders to devise their rural friendly processes to fight disasters. The NGO employee who also manages the local rural partnership between NGOs, MLM and relevant government departments pointed out that compliance with government regulations has been a problem. She also pointed out how the NGOs have managed to overcome the problem of compliance with established rural regulations to sustain grazing land during disasters. In her own words, she stated:

‘Conservation grazing agreements are also seen as local sustainable livelihoods projects because they are based on compliance and benefits. That is, the community comply with the land grazing resting rules and the NGOs such as Conservation South Africa, Mid natural PTY and Environmental Rural Solutions; bring the auctions (market) where they sell their livestock and earn livelihoods. People agree on different grazing methods, it could be rotational resting or rotational grazing. These agreements last for a period and at the end of such period, the benefits of auctions are organized by the NGOs for the community that is, Environmental Rural Solutions; or Conservation South Africa.’ (Participant 5, Female, Matatiele Local Municipality)

Discussion of key findings

This section presents and discusses key findings and their implications considering SLF (see Figure 1) and institutional theory (see Table 1). The discussions lead to the summarised original contribution to knowledge in the form of different policy implementation suggestions and a new proposed framework (see Figure 4) that sustains rural SMMEs in times of disasters.

FIGURE 4: Proposed rural SMME policy implementation framework.

Broad-Based Black Economic Empowerment and the National Strategy on the Development and Promotion of Small Business: Key findings and implications

The key finding concerning BBBEE and NSDPSB is that government departments such as DEDEAT and DRDR hardly collaborate with local NGOs, traditional leaders and the local business community when embarking on the economic empowerment of rural SMMEs. Such an approach denies the locals an opportunity to engage with other stakeholders that are needed in the implementation of policies. A purely regulative approach without a cultural cognitive approach also denies local values, beliefs and approaches a part in the implementation strategies. Chirau and Blaser-Mapitsa (2020) concur and point out that such an omission is at the centre of the failed implementation of well-resourced policies, laws and regulations in South African municipalities.

The implication of such an approach is the exclusion of rural SMME representative institutions in crucial empowerment networks and hence the continuation of the current slow transformation process in the country. This means the approach by the policymakers has not made it easier for the majority of rural SMMEs to benefit from BBBEE and NSDPSB policies. The approach by the government departments identified above is therefore going against the national government’s aim of redressing the imbalances of the past and implementing policies that promote developmental local government as described by Ssekitoleko and Du Plesis (2021).

Suggested approach to implementation of Broad-Based Black Economic Empowerment and the National Strategy on the Development and Promotion of Small Business

After careful analysis of the findings, it is therefore suggested in this study that the participants could benefit from a more collaborative process (see Figure 4, the proposed framework below). This may entail asking the previous owners or current owners (identified as transformation resistance stakeholder in Figure 4) to slowly transfer ownership until the prospective owners whom the government wants to empower know enough to run the business on their own. While such an approach has been partly blamed for the slow transformation process in the country, it is a better option for handing over the business to those who cannot operate. Implementers (those identified to have the transformation capacity in Figure 4) could avoid the challenges of throwing more funding and resource into training and attending empowerment meetings if they research the best candidates who are willing to offer land and such peaceful transfer of land. They would then go on to publicise such successful examples causing many landowners to want to instead of having to (Palthe 2014). Such an approach to being proactive and engaging the stakeholders before making binding decisions is consistent with Scott’s (2008) findings. Such an approach is also consistent with SLF and institutional theory’s cultural cognitive element. Therefore, a thorough information processing exercise, in this case, would lead to proactive judgements. Proactive judgements by the implementers rather than dealing with the consequences of the judgements reached without engaging the white farm owners whose land needs to be transferred to the locals. Mushangai (2015) also affirms such a leadership approach detailed by Scott by pointing out that BBBEE is meant to assist rural SMMEs with the necessary support that is tailored for management, ownership and skills development purposes. Scott and Mushangai’s analysis are also applicable to the implementation of NSDPSB. That is because prior engagements could ensure a successful empowerment encounter and hence save the implementers time and money in implementing the strategy during and post disasters. Next to be discussed are the NSDPF in SA (2000) and the NIBUS (2013)’s contribution to rural SMMEs.

National Strategy for the Development and Promotion of Franchising and National Informal Business Upliftment Strategy: Key findings and implications

The key finding concerning NSDPF and NIBUS is that local collaboration between rural SMMEs makes it easier for investors and big businesses to move in. The findings revealed that investors and big businesses (such as ANDM, Spar, Cambridge, fruit spot and local butcheries) participated in the implementation of the above-mentioned strategies in both MLM and JLM whenever there was a good collaboration among the stakeholders. An example of such a good collaboration between rural SMMEs is NIBUS’s success in JLM although the same cannot be said concerning MLM as far as physical resources are concerned. This view is echoed by Lüdeke-Freund (2020) who argues that SMME networks form the crucial ecosystem needed for entrepreneurial sustainability. These findings and analysis are consistent with Smyth and Vanclay’s (2017) own analysis, which is informed by the sustainable livelihoods’ framework. The SLF emphasises the need for all stakeholders to work together (availing a diversity of individual resources or assets to each other) to produce sustainable livelihood outcomes.

This finding implies that organised rural SMME institutional networks will not only attract better investments which are crucial in the sustainability of rural SMMEs but also make it easier for other stakeholders to participate in the implementation of NSDPF and NIBUS. Kang et al. (2021) corroborate and further affirm Scott and Meyer’s (1983) argument that local stakeholders need to identify with the local initiatives for them to be supportive.

Suggested approach to implementation of the National Strategy for the Development and Promotion of Franchising and National Informal Business Upliftment Strategy

The analysis of the findings revealed that NSDPF and NIBUS’s main contributions to rural SMMEs in the study areas have been in market creation and bringing physical resources. The findings also pointed to the different distribution and limited success confined to either JLM or MLM. An example is that NIBUS’s success was confined to JLM and not MLM as far as physical resources are considered. Therefore, it is important to find out why so many stakeholders contributed physical resources at JLM and not MLM. The findings are the same concerning NSDPF. The reason derived from the findings is that the concentration of small-scale farmers in one place and speaking through one co-operative (Mnothophansi) made it easy for the investors to engage JLM vegetable rural SMMEs.

There is also a need for engagement before the commitment and arrival of physical resources as donors and investors often need assurance that the physical resources will be safe and looked after. Once the donors are satisfied with the answers out of engagements they then willingly commit and release such physical resources. They donate and support because they want to and not because the laws of the land require them to participate in the economic empowerment of the rural SMMEs. Such findings are consistent with Palthe’s (2014) analysis and the proposed framework in Figure 4.

The proposed framework (Figure 4) puts collaboration at the centre of transformation encounters. That is because, through elements of Institutional Theory and SLF, the rules or policies of sponsors are considered alongside the values and assumptions of the local community. That is because, through elements of Institutional Theory and SLF, the rules or policies of sponsors are considered alongside the values and assumptions of the local community, whose livelihoods need sustaining through SMMEs. Molefe, Meyer and De Jongh (2018) also corroborate such a proposed framework on collaboration and go further to recommend that collaboration in the transformation strategies must be an ongoing (see Figure 4 for the ongoing process starting from the situational process, planning, implementation, monitoring and evaluation) exercise among stakeholders. Such an ongoing collaboration exercise is key to the ongoing support and sponsorship needed for successful NSDPF and NIBUS implementation and the sustainability of rural SMMEs during and post disasters. Next to be discussed is the NDP. National Development Plan strategy is key in the implementation of all SA government policies.

National Development Plan: Key findings and implications

This study’s findings on the impact of NDP focus on three goals associated with the strategy’s aim of growing the economy, creating jobs and reducing inequality. Such goals include promoting access to the international markets so that rural SMMEs and farmers can participate, investing in local infrastructures such as roads, water and electricity so that rural SMMEs can have access to better services, and improvements in skills, that is, mentoring and coaching workshops on running SMMEs, so that rural SMMEs can offer improved or quality services.

The key finding concerning the goals of the NDP is that there is little to no progress in the implementation of NDP goals in the rural municipalities covered by this study. The failure to implement NDP is more evident in the first two goals (i.e. promoting access to the international markets and investing in local infrastructure), while the last goal (i.e. improvements in skills) is largely implemented by NGOs. Such little progress in the first two goals could be traced to reliance on a regulative approach rather than a cultural approach. On the other hand, where cultural approaches were sought by mainly NGO leaders the progress was better but limited, because of the limited resources or assets that NGO leaders could master compared to the government. The main aspect of the regulative and cultural approaches being applied in both cases involves using force (power to make rules and enforce them) and shared values (finding something that works for all parties). These power relations that are being raised have to do with how much voice and influence other rural SMME institutions have at different levels of policy planning, implementation, monitoring and evaluation. Kang et al. (2021) affirm and put it this way:

[T]he collaborative Monitoring &Evaluation system enables the sharing of a common understanding of the programs’ goal, strengthens collaborators’ commitment to the program, and extends the understanding of the program’s progress and evaluation activities. (p. 7)

This simply means that when people feel consulted, the easier it is for them to be part of the implementation process. See Figure 4 for the proposed implementation process that ensures that all stakeholders feel consulted (i.e. ongoing process from situational analysis to evaluation) and part of (i.e. rules and policies of sponsors are observed alongside local values and beliefs or assumptions of the local community) the programme.

The implication of such a lack of collaboration at different levels in the implementation of NDP is the continuation of the status quo involving strategies that do not translate to improved implementation, transformed rural SMMEs, sustainable SMMEs or livelihoods.

Suggested approach to implementation of the National Development Plan

The first two goals of promoting access to the international market by rural SMMEs and farmers, and investment in the local infrastructure such as roads, water and electricity has seen far little progress in their implementation as compared to the third goal of improvements in skills – mentoring and coaching workshops on running SMMEs. Thus far little progress in the first two goals could be traced back to reliance on the regulative approach rather than a cultural approach by the implementers (see Palthe 2014). On the other hand, where cultural approaches were sought by mainly NGO leaders, the progress wabetter but limited because of the limited resources that NGO leaders could put together as compared to the government. A close examination of the proposed framework in Figure 4 gives insight into how the government leaders could do better by using their power not only to enforce but seek shared values. In that way, the implementers could achieve the goals of NDP. This is so because the proposed framework (which consolidated views from SLF, institutional theory and monitoring and evaluation processes) clarifies the roles and stages in the engagement and sharing of resources needed in the implementation process. Next to be discussed are the key findings and implications related to the Disaster Risk Management Act 2002 (Act no. 57 of 2002).

Disaster Risk Management Act 2002 (Act no.57 of 2002): Key findings and implications

The Disaster Management Framework clarifies the roles and resources needed to sustain rural SMMEs (National Disaster Management Centre 2005). These resources are needed to fight disasters such as drought, fire or COVID-19 impact. The key finding concerning the implementation of the Disaster Risk Management Act (Act no. 57 of 2002) is that local municipalities outsource their responsibilities to consultants in responding to disasters and forging new solutions that should sustain rural SMMEs affected by local disasters. The problem is that consultants work with fixed deadlines and they do not create enough time to offer their services to local SMME leaders as to how they can collectively find lasting solutions to these constant disasters. Therefore, by delegating their work to the consultants, the local municipalities have delegated all local stakeholders to work with the consultants.

Such undertakings imply that other leaders from NGOs, traditional leaders and business communities are not able to implement some of the recommendations because they were not part of their making (Kang et al. 2021; Scott 2008; Scott & Meyer 1983). Another implication is that crucial resources or assets (see SLF) needed by rural SMMEs during disasters will either be inadequate to sustain rural SMMEs and rural livelihoods on their arrival, or they will not come at all (Smyth & Vanclay 2017).

Suggested approach to implementation of Disaster Risk Management Act 2002 (Act no.57 of 2002)

From those interviewed in the study areas, the summary of the findings and analysis concerning the disasters that frequently devastate the areas have been presented above. These are frequent droughts and fires that make most SMMEs unsustainable immediately or shortly after occurring. While all leaders from the available stakeholders in each municipality act in assisting local SMMEs to survive such disasters, the local municipality is by law obligated to lead. Such obligation by law also means that they are solely responsible if there is widespread devastation of life or livelihoods in their municipality. It is in that view that the municipalities are doing everything on their own to avoid the blame. In doing that, the findings reveal that they employ consultants to speed up the process of recovery after such disasters. Because consultants work with deadlines, they do not make enough time available for consultation with the local SMME leaders as to how they can collectively find lasting solutions to these constant disasters. Therefore, by delegating their work to the consultants, the local municipalities have delegated all leaders’ work to the consultants. The results of such undertakings are that other leaders from NGOs, traditional leaders and business communities (see Figure 2 and Figure 3) would not be able to implement some of the recommendations because they were not part of their making. By changing their legal obligation perspective, local municipality leaders could work directly with local leaders and not only avoid rebellion against the findings and recommendations of the consultants but create recommendations that every leader can internalise because they were part of solution making process and feel that their interests in sustaining their livelihoods are safeguarded. Such undertakings are not only consistent with the proposed framework (see Figure 4) but are consistent with Kang et al. (2021) and Scott’s (2008) analysis. Scott (2008) points out that:

Actors who align themselves with prevailing cultural beliefs are likely to feel competent and connected; those who are at odds are regarded as, at best, ‘clueless’ or, at worst, ‘crazy’.

From this perspective, it is easy to understand that if the crucial stakeholders do not feel valued in the process of the above-mentioned regulation, the implementation route will be more challenging for the implementers.

However, the findings in this section also revealed that a lack of consultation process between the local municipalities and communities in overcoming local disasters has given birth to local alternative processes. Local alternative processes whereby the local NGOs (such as ERS in MLM) and local tribal authorities (such as chiefs in JLM) work together with local communities to fight local disasters and sustain their SMMEs. While the local initiatives at both municipalities have managed to keep many local businesses during frequent disasters over the years, such a process needs further collaboration (see the proposed framework shown in Figure 4) from the local and national stakeholders to maximise the impact by sustaining rural SMMEs during and post disasters. Figure 4 propose that policymakers ought to involve all stakeholders (i.e. following a five-step continuous process starting with a situational analysis and ending with evaluation) to ensure effective rural friendly policy making and implementation. Figure 4 further proposes that policies, rules and regulations can only be implementable in rural areas if they are considered alongside rural values, beliefs and assumptions when responding to disasters. Such a proposal draws lessons from the grazing agreements and rules that were successfully implemented (see findings section). Such agreements and rules were successful because they considered the local values, beliefs and assumptions in fighting local rural disasters and sustaining livelihoods.

Conclusions and practical recommendations

This study established that the failures of South African policies in empowering rural SMMEs to sustain rural livelihoods as anticipated by national policymakers are rooted in the strategies employed to implement SMME policies, laws and regulations discussed in this study. The national policymakers are not fully embracing the contribution of rural SMMEs or rural stakeholders in the crucial stages of policymaking and implementation. Policymakers are also not giving rural stakeholders enough platform to shape the strategies that would result in the sustainability of rural SMMEs and rural livelihoods. It is recommended that strategies that national policymakers employ to sustain rural SMMEs and rural livelihoods be thoroughly discussed with all stakeholders before policymaking, during policymaking and continuously during implementation in rural areas. The original contribution to knowledge in this study lies in the proposed framework (Figure 4) and suggestions to guide the implementation of SA rural SMME policies during disasters such as fire, drought or COVID-19.

Keeping in mind that full collaboration during policymaking and policy implementation between national policymakers and local rural stakeholders could be costly, it is recommended that cost-cutting measures and leadership approaches be considered. Discussions on policymaking and policy implementation should be announced from the top (national) but be allowed to be led by local rural stakeholders for a reasonable period before national policymakers are fully engaged. Rural institutions such as NGOs who have both interest and resources (meeting venues or finances to pay initial costs) should lead discussions on how best to maximise policy implementation and sustain SMMEs and rural livelihoods. NGOs or other best-suited rural institutions should lead with the blessing of national policymakers to allow local stakeholders to consolidate their preferred approach in the implementation of policies to maximise outcomes that are rural friendly. What follows are the recommendations for future studies.

Recommendations and direction for future studies

This study established that the existing rural (local) knowledge that guides or responds to disasters, as well as the need to sustain rural SMMEs, is not fully understood by policymakers. It is therefore recommended that future studies focus on the best processes of transferring rural knowledge into national, provincial and local policymaking institutions like the national parliament, provincial legislatures and municipal councils in SA. The transfer of rural knowledge is crucial in guiding the policymakers and legislators on how best to approach policymaking so that the implementers at the local level can identify with it and find it easily implementable and beneficial in the sustainability of rural SMMEs during and post disasters.

Acknowledgements

A great part of this article stems from the author’s PhD thesis entitled ‘Sustaining South African rural SMMEs, a sustainable livelihoods research’, submitted in January 2021 and passed in September 2021. Prof. Betty C. Mubangizi supervised the PhD thesis but was unable to contribute to this article.

The author would also like to thank his wife, Nickie Hlekani Farisani, for her support and suggestions with the diagrams and figures.

The author declares that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.

T.F.R. planned and conducted the research, reviewed the literature, formulated the research design, collected and analysed the data, made interpretations and finalised the article.

T.R.F.’s PhD thesis titled, ‘Sustaining South African rural SMMEs, a sustainable livelihoods research’ was sponsored by both the University of KwaZulu-Natal (UKZN) and National Research Foundation (NRF). The financial assistance of the NRF is hereby acknowledged.

The data that support the findings of this study are available upon reasonable request.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any affiliated agency of the author.

References