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SME's - regulatory compliance - is it an issue

Written by: Dr. Rob Smorfitt

Article Overview: Is regulatory compliance a real issue in Africa?

SME's - regulatory compliance - is it an issue

An independent study of regulatory compliance in South Africa showed annual compliance to come at a cost in excess of R70bn. This is a lot of money that is simply being wasted. The question that follows is whether over regulating the economy is an African trend or not.

Unfortunately a brief review of the latest global competitiveness report tends to lead one to conclude that the trend in Africa is to over regulate. In an effort to resolve the problem we need to understand why.

Is it a dictatorial approach to government? I do not think this is often the case. In my humble opinion the cause is often a severe case of paternalism. These governments have too little faith in their own people. The collectivism culture together with strong tribal/traditional leadership models leaves little room for people to be entrepreneurial and make their own mistakes.

This has been compounded by the socialism approach learnt during the fight for freedom from colonialism, when their support base was the communist bloc.

Whatever the cause, it is killing the entrepreneurial drive within these countries and needs to be addressed.
Rob Smorfitt

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Article Tags: Africa, entrepreneur, entrepreneurship, overregulation, SME, SMME, Smorfitt



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