Black Business Council CEO Kganki Matabane has proposed several measures which he believes will lift the economy out of the doldrums, including more small businesses participating in procurement opportunities. These measures are centred around ensuring that businesses owned by the youth, women and people living with disabilities become the centrepiece of this drive for economic revival.
Matabane was speaking at the National Youth Development Agency’s (NYDA) Investment Roundtable on Wednesday. Matabane said the first measure focused on industrialisation and localisation. “We all know, and learned through Covid-19 that we end up looking for a simple thing like a mask because we have killed localisation and industrialisation,” he said.
“We are the biggest consumer of HIV medication, but we have no factory to produce medication, thereby indirectly creating jobs in China and India. Localisation and industrialisation in this instance become a theoretical exercise. “It is important that we localise because if the Russia and Ukraine war continues for a long time, we are going to run out of food,” he warned. Matabane said that the second measure related to procurement and allowing small enterprises to participate in procurement opportunities.
He said the country could do well to learn from its recent history, pointing out how the apartheid government used state-owned enterprises to deal with the issue of poor Afrikaners by helping set up many small but now well-established businesses. “Current legislation does not support the notion that we should set aside 40% procurement for youth and women-owned businesses,” he said. He furthermore encouraged the youth to participate in policy discussions so that it could be known what they wanted to see implemented in legislation.
Matabane’s third proposal was that big companies should pool together money from their Enterprise Supplier Development (ESD) budgets into one fund to tackle the lack of funding for SMMEs owned by young entrepreneurs. “Big companies will say something like they are spending R5 billion on ESD, and if that is the case we should be seeing young people driving Maseratis,” he said. “We proposed to take all of the ESD funds from these businesses, put it in one fund and let the fund operate like the Solidarity Fund.
“Let the fund be administered by distinguished and honourable business people who have achieved success on their own, and are not hungry,” he said. The CEO said the Solidarity Fund, which is a public-benefit organisation created in March 2020 by businesses and other organisations in response to the pandemic, did not disappear, but it was used according to its mandate.
Matabane also took issue with the National Development Plan’s goal to have 90% of jobs provided by SMMEs by 2030. “If we were actually implementing the NDP’s goal, the Department of Small Business Development would have been the most important department, and all support would be directed to it,” he said. “However, the actions we are seeing do not seem to support this goal.”