THOUGHT LEADERSHIP
Growing black-owned businesses
By Muzi Siyaya
While some policies are rightfully placed to develop small medium and micro enterprises( SMMEs) in South Africa, long-term strategy is required to grow black-owned businesses.
Aside from developing small medium and micro enterprises( SMMEs), consideration needs to be given to the development of large black-owned companies to ensure they can compete globally, undertake large complex projects and export their services and products to other global markets. The revised Preferential Procurement Regulations 2017, an amendment to the Preferential Procurement Policy Framework Act, Act Number 5 of 2000( PPPFA) which came into effect in January 2017, requires that 30 % of government contracts to be set aside to empower certain categories( small medium and micro enterprises( SMME) also classified as EMEs or QSEs, co-operatives, township and rural enterprises) through procurement. This is a welcome addition to the procurement regulatory environment which will go a long way towards promoting socio economic transformation and accelerating inclusive growth. However, what is missing from this legislation is a long-term strategy to create large black-owned enterprises( LBOEs). A black owned enterprise( BOE) in this context refers to a‘ black-owned enterprise’ with at least 50.1 % South African black ownership and / or more than 50.1 % management control by South African black people.
Ownership refers to economic interest while management refers to the membership of any board or similar governing body of the enterprise. A large‘ black enterprise’ therefore is one that complies with the definition of a BOE and has an annual turnover( revenue) and asset value of more than R35-million and is at least 50.1 % black owned. As it currently stands, South Africa’ s economy continues to be dominated by large, established companies, mostly white or foreign owned. While there are pockets of excellence of large black-owned companies across various sectors, such as construction, engineering, legal and auditing, these
Defender Network
The issue of quality and creating globally competitive black-owned and or South African companies that can export skill, services or products to the rest of continent must remain imperative in a globalised economy.
34- CEC January 2018