Local procurement ‘to grow black entrepreneurs’

27 June 2014

The government has set itself the target of procuring 75% of goods and services from South African producers as part of its drive to create a new class of black industrialists and entrepreneurs, says Deputy President Cyril Ramaphosa.

This target was ambitious but “eminently achievable,” Ramaphosa said during the gala dinner of the Black Business Council (BBC) in Johannesburg on Thursday evening, adding: “We are quite literally building the nation.”

The Deputy President said the government’s drive for radical economic transformation had to ensure “faster, inclusive growth, combined with much higher levels of employment creation, reduced inequality and the deracialisation of the economy”.

Support for local suppliers

A critical part of this programme, he said, was the government’s massive strategic investment in infrastructure, which aimed to promote broad-based black economic empowerment through support for local suppliers and contractors.

“A lack of diversification and growth in the productive sectors of our economy has in the main contributed towards the de-industrialisation of our economy over the past 30 years.

“We will need to focus on marketing and supply activities to enable small scale producers to enter formal value chains and take advantage of economies of scale.”

Ramaphosa said successful black entrepreneurs and industrialists would require broader access to financial services to fund growth in existing and new sectors.

“We can no longer ignore poor lending practices and excessive charges in some parts of the financial sector, and the lack of more inclusive and accessible financing opportunities.

“Through our development finance institutions, we will provide increased access to affordable lending that supports diversification of the economy, broad-based black economic empowerment, and investment in smaller businesses in the productive economy.”

‘Black business must lead’

However, radical economic transformation also needed partnerships, Ramaphosa said, adding that black business had a key role to play in identifying where needs existed and in developing proposals on how to address these needs.

“Black business must lead. It must develop strategies, working with government, labour and the rest of the business community, to train tens of thousands of engineers, actuaries, accountants, teachers, doctors and project managers.

“Black business must look at how emerging entrepreneurs can be financed, supported and provided with market access. Our developmental state needs partners in the business community who supports the vision of a racially integrated industrial economy.”

Ramaphosa urged the council to join with the government in developing mechanisms that supported meaningful transformation and greater equality in the workplace.

“Government is prepared to do its part by fostering an environment for growth and investment through the development of adequate infrastructure, provision of services such as energy, and water, mobilisation of industrial financing, consistency and certainty in regulation, removal of unnecessary burdens for business and the improvement of our skills base.”

He said the country needed a dynamic and entrepreneurial class of black industrialists. “We need people who will take a long-term perspective, roll up their sleeves and drive the development of our productive capabilities from the shop floor up.

“As a nation, we are looking to black business in particular to take this country forward. It needs to be an active agent in the implementation of the National Development Plan. It needs to be a driver in its own right of radical socio-economic change.”

‘This will be a toyi-toyi of a special type’

Small Business Development Minister Lindiwe Zulu, also speaking at the dinner, said the time had come for black South Africans “to fight for what they should have been enjoying for a very long time.

“This will be a toyi-toyi of a special type, because the toyi-toyi that we’ve been seeing of late is the reflection of the energy that is directed to burning schools and libraries. Now, we need to turn that energy into a better energy that is contributing to a better South Africa.”

Zulu said the government was fully aware of all the challenges faced by small business in the country, and was ready to partner with small businesses to help them benefit from the opportunities available.

At the same time, South Africans needed to “ask what they can do for themselves, to ensure that they contribute positively to their respective communities”.

With the amount of government support available, she said, there was no reason for small businesses in South Africa not to prosper.

“Small business on the African continent operates under difficult circumstances. Many of them don’t have the institutions that South Africa has. Many of them do not have the financial support that we have. But they are thriving.”

Source: SAnews.gov.za