Participation of SMEs and women-owned businesses in the South African wine value chain

Reena Das Nair and Shingie Chisoro
2023
DOI number

#Agriculture and food
#Sub-saharan Africa

Small and medium-sized entrepreneurs (SMEs) and women-owned businesses are recognised as important contributors to South Africa’s economic growth, employment, and structural transformation objectives. In South Africa, SMEs are estimated to account for around 98.5% of all businesses (in number terms), around 26% of jobs and almost 40% to Gross Domestic Product (GDP) (Rajagopaul, Magwentshu, and Kalidas, 2020). Other estimates suggest that SME contribution to jobs was even higher at between 50-60% of the country’s work force (International Finance Corporation, 2020). 38% of SMEs in South Africa are women-owned (Rajagopaul, Magwentshu, and Kalidas, 2020). While there is limited data on black-owned SMEs, black ownership of businesses has been low in South Africa historically, with estimates that it fell to under 30% in 2021. Despite the positive contributions of SMEs to the economy, and the importance of transformation for more inclusive businesses, diverse and systemic barriers to entry, exit and growth limit higher levels of participation in economic activities. This paper seeks to understand participation of SMEs and women-owned businesses (particularly black-owned businesses) in the South African wine industry. Key objectives of this study include assessing the nature of barriers to entry, exit and growth that SMEs and women-owned businesses face, the recourse they may have to overcome these barriers, and to better understand successful and failed entry experiences. The paper assesses key activities and investments/upgrading, access to markets and finance, industry and government support, standards, and requirements, and how all these shape outcomes and opportunities for inclusion.

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Reena Das Nair

University of Johannesburg

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