President Cyril Ramaphosa wants to see a new and improved trajectory for broad-based black economic empowerment (B-BBEE) and feasible proposals detailing how to leverage capacity and resources from across society to bolster transformation.
“We want a frank conversation about impediments to the expansion of black business, not just from government, but from the private sector as well,” he said during an address at the inaugural Black Industrialists and Exporters Conference in Sandton on Wednesday.
Ramaphosa noted that South Africa has not yet dealt with the structural flaws of the economy, despite working towards the Freedom Charter’s vision for all to share in the country’s wealth.
The president said that in other upper-middle-income countries, small and medium enterprise (SME) employers and self-employed people make up around a third of all employed people in rural areas, and one in seven in towns.
However, in South Africa the figure is just over one in 20, in both rural and urban areas.
“According to modelled estimates from the International Labour Organisation, business owners in South Africa plus family members who work for them make up just 17% of total employment. This is compared to 46% in China and an average of 31% in other upper-middle-income economies,” he added.
Speaking to the bosses of around 650 black-owned companies at the conference, Ramaphosa said the black industrialist’s strategy is underpinned by a commitment to secure greater diversity in the ownership and control of the economy.
This includes the promotion of emerging enterprises to drive “inclusive industrialisation”.
“Over the past six years, the Department of Trade, Industry and Competition [dtic], the Industrial Development Corporation, the National Empowerment Fund and other agencies have supported approximately 900 black industrialists,” he said.
“Over the past 11 years, black enterprises have been supported to the value of R55 billion.”
However, Ramaphosa stressed that there are still barriers preventing black entrepreneurs, particularly women, youth and people with disabilities, from meaningfully and equitably participating in the economy.
“They [the barriers] are particularly challenging for entrepreneurs in townships and rural areas. These entrepreneurs have difficulty accessing finance, markets, technology and infrastructure. There is red tape and other bureaucratic obstacles,” he added.
The president said there is also the issue of concentrated economic and ownership patterns, and exclusion from major value chains.
“For this reason, even as we celebrate black entrepreneurial success, our eyes must look towards the horizon … We need to talk about private sector procurement, about value chains, about access to financing for emerging black business and about how existing systems militate against black business.
“We need to talk about the inefficiencies in the economy that affect established and emerging businesses alike.”
Ramaphosa also said there is a need to act decisively and urgently to end load shedding, saying that black industrialists cannot grow without a reliable supply of affordable energy.
Minister of Trade, Industry and Competition Ebrahim Patel launched the Black Exporters Network during the conference. The initiative intends to increase the volume of exports and create local jobs.
Patel said South Africa exported R1.8 trillion worth of goods in 2021, a record performance which represented almost a third of the country’s gross domestic product.
Commenting on boosting export-led growth, Ramaphosa said the country’s achievements through the Black Industrialists Programme, which has funded black-owned companies since 2016, and other initiatives must act as a springboard to achieving higher rates of economic growth, social transformation and common prosperity.
“Through this conference we want to establish a practice of recognising and celebrating black excellence in the economy.”
Nondumiso Lehutso is a Moneyweb intern.