Impact of Government Policy on Entrepreneurial Activities in the Raymond Mhlaba Local Municipality, Eastern Cape

Orientation: Across all economies, the role of entrepreneurship in employment creation and poverty alleviation is acknowledged. Despite their contribution, entrepreneurs are still facing many challenges, which affects their survival. The government in trying to assist these businesses to cope introduced many policy interventions. However, within the SMME and entrepreneurship development literature, little attention is being given to understand the relevance of government policy on the demand side, which gives an entrepreneurial perspective on the relevance of these support programs in relation to their specific individual needs.

Research Purpose: The study explored the impact of existing government policy on entrepreneurial activities in the Raymond Mhlaba Municipality in the Eastern Cape.

Motivation for the study: Calls have been made within international and local literature for studies that give attention to factors that increase the success of small businesses.

Research Design, Approach and Method: Due to the nature of the information required to attain the research objectives a qualitative research approach was used. Data was collected using in-depth questionnaires, which were distributed to a sample of SMME owners/managers in Raymond Mhlaba Municipality.

Research Findings: The study concluded that government policy influences the performance and profitability of SMMEs. However, a lot of policy interventions still need to be developed and implemented to support entrepreneurial activities.

Practical/Managerial Implications: While SMME policy interventions exist it is imperative, to note the need for reorganisation these interventions and to incorporate the practical aspects in the form of SMME needs and expectations. Additionally, the public and private sectors should create a supporting environment that enhances the effective and efficient use of support programmes, which in turn will increase SMME success.

Contribution: This paper is of importance to the SMME sector and policy makers since it provides ways to improve the SMME business support based on the recommendations given.