By: Anna Majavu
State-owned entities need to change their procurement models so that the SMMEs they train in incubator programmes are guaranteed contracts after they complete their training. This is the view of Ubuntunomics owner and sustainability practitioner Sibusiso Nyathi on South African Forestry Company Limited’s (Safcol) SMME development programme.
Safcol CEO Tsepo Monaheng, told Parliament’s Portfolio Committee on Public Enterprises last week that the state forest company was using spare land that it owned to work with communities and SMMEs to set up agroforestry businesses like beekeeping and vegetable growing co-operatives. “We have lots of land, because of our 189,000 hectares of land only 129,000 is plantable. So, the other piece of land we use for other activities, and agroforestry is a key focus for us for jobs and for food security,” said Monaheng.
One co-operative had already been approved as a supplier to Woolworths and Shoprite. Monaheng said that Safcol had also given 13 small-scale farmers farming tools and training, which created 106 jobs. Three land claimants had been appointed as silviculture contractors to provide logistics services connected to forest quality management, including arranging tree planting and controlling the vegetation that grows in forests. “In the enterprise and supplier development space, we have spent R116-million so that we can have (train) service providers that can continue to create jobs anywhere in the forestry sector and get contracts and create jobs for other people,” Monaheng told the meeting.
But Nyathi believes that continuing to train small businesses for participation in a procurement system based on tendering will not result in long-term, sustainable livelihoods for forestry SMMEs. “Even after SMMEs have been trained, the prevailing procurement system again is inherently unsustainable, because bidding means there will be losers and a winner. SMMEs get stunted because there is no certainty of a work pipeline,” said Nyathi.
He recommended that small forestry businesses started lobbying Safcol to create incubation programmes where all the SMMEs were trained and guaranteed contracts. “Planned contracts should be split into small portions so that everyone gets a piece and so that there is continuity,” he said. “In order for the training to be impactful, SMMEs should be brought higher up into the value chain – with more agro-processing opportunities. This will contribute to alleviating poverty and unemployment, will assist in meeting Safcol’s corporate strategy, opening up future opportunities for the SMMEs.”
Beekeeping on unused state-owned forest land could be an excellent business opportunity for SMMEs, but small enterprises in the honey production business had their “lag times” subsidised, said Nyathi. “There is a bit of capital outlay needed in beekeeping. Most SMME’s have no way to sustain themselves and end up losing interest and abandoning the business. Financial packages need to be organised to cater for the lag time before the first revenues are realised,” said Nyathi. Safcol is one of the few state-owned enterprises that has achieved a clean audit opinion for the last three years in a row.