THE EFFECT OF FOREIGN-OWNED SMALL BUSINESSES ON LOCAL SMALL BUSINESSES IN SOUTH AFRICA

 THE EFFECT OF FOREIGN-OWNED SMALL BUSINESSES ON LOCAL SMALL BUSINESSES IN SOUTH AFRICA

In recent years there has been a major influx of foreign nationals in the Republic of South Africa (RSA) from Eastern Countries and elsewhere in Africa. These foreign nationals settled themselves in the length and breadth of the RSA and chose to live in informal settlements in black townships and small towns.

It is difficult for most of these foreign nationals to find employment in the formal economy of RSA as a result of their foreign origins, and as a consequence, they have capitalized on opportunities to set up small informal businesses to meet their livelihood needs.

By virtue of their remarkable business prowess, they have proven to establish reasonably successful enterprises, to the envy of RSA entrepreneurs, who function within their chosen business sectors. This perceived success has opened them to unfair business rivalry, internecine criminality, and unwarranted violent attacks spurred on by xenophobic tendencies.

Can we say whether these foreign-owned businesses have any positive or negative impact on locally-owned businesses in South Africa? We have found that the success of foreign-owned small businesses can be ascribed to their business ingenuity, their collective buying power, and their ability to intermingle with their host community members.

We have found that these foreign-owned businesses contribute considerably to the economies of Some Municipality's constituent towns and provide much-needed employment opportunities to local residents.

RSA small business entrepreneurs on the contrary do not feel the need to interact with one another and consequently cannot benefit from the collective buying of merchandise. They persist in the belief that foreign-owned small businesses threaten their business enterprises and take their livelihoods away.

We recommend that this myth be dispelled through mentorship and business skills development programs to strengthen the operations and viability of RSA small businesses in order to create pliable business relations with foreign-owned business enterprises.

Furthermore, it is important that the economic contribution made by foreign-owned small businesses be recognized by the state and local government to render the necessary support through small business support agencies, in order for the total small business sector to prosper.

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