President Cyril Ramaphosa says Black Economic EmpowermentIt remains an integral part of government’s economic reconstruction and recovery planAs the country recovers from the COVID-19 pandemic.
Next year marks the 20th anniversary when the Broad-Based Black Economic Empowerment Act was passed.
“Our commitment to entrench and deepen economic empowerment is unwavering. This is why Black economic empowerment is an integral component of our economic reconstruction in the aftermath of the COVID-19 epidemic.
“This is one of the reassurances I articulated to the Black Business Council earlier this month, where we discussed the state of BBBEE in the country, the progress that has been made and what we need to do as a collective to build on our gains,” he said in his weekly newsletter on Monday.
This week, President Ramaphosa is expected to announce the new multi-sectoral Broad-Based Black Economic Empowerment Advisory Council which he said is aimed at “championing the cause of economic transformation”.
The President acknowledged that while BBBEE has scored some victories, there has been “regression” in other areas.
“We have gone backwards when it comes to increasing black management control, upscaling skills development, entrenching enterprise development and broadening procurement to give opportunities to black women and the youth,” he said.
Transformation in the private sector
President Ramaphosa pointed out that white ownership continues to dominate the private sector.
This, he said, is not reflective of South Africa’s transformation agenda.
“At the end of apartheid, black ownership of JSE-listed companies was less than 1%. In the last 28 years, this figure has not changed much. Nevertheless, there have been significant private sector initiatives and deliberate state measures to increase the economic participation of black people.
“Economic transformation and economic growth are intertwined. You cannot have one without the others. By integrating transformation into the process of industrialisation, we are advancing a more inclusive growth model that shares, rather than concentrates, wealth,” he said.
The following government initiatives are being taken to support the empowerment of black entrepreneurs:
- The Department of Trade, Industry and Competition’s various programmes including a support programme for township businesses, export-related training by the Industrial Development Corporation (IDC) to black, women and youth-owned businesses and increased infrastructure budget to SMMEs in the Tshwane Special Economic Zone.
- Sectoral masterplans for localization that benefits black-owned businesses
- An international network of black exporters, supported by the government, will link black-owned companies across various sectors.
- R2.5 billion of new government support for some 180 Black industrialists. This includes loans from IDC and National Empowerment Funds (NEF) as well as grants from DTIC incentive program.
President Ramaphosa indicated that although these initiatives are important, more can still be done to combat the challenges faced by Black businesses.
“This includes the difficulty of accessing start-up and expansion capital and the ability of SMMEs to find markets for their products. Black women-owned businesses, in particular, encounter difficulties in taking on large-scale empowerment transactions,” he said.
The President warned that economic growth will not be possible without the empowerment and inclusion of Black people.
“The continued exclusion of the Black majority from the economy’s mainstream constrains economic growth, which ultimately impacts all business. Expanding the country’s entrepreneurial base is fundamental to growth.
“We have a shared responsibility to drive the effort to entrench BBBEE because it is about eradicating inequality. Unequal economies breed unequal societies, and unequal societies don’t grow and flourish,” he said.
President Ramaphosa said true BBBEE can only be achieved through “partnership and a shared commitment to transformation”.
“Breaking the cycle of underdevelopment through Black economic empowerment is not just a moral imperative; it also makes business sense. The primary consumers of these goods and services are, in fact, South Africans. This should be reflected in diversity of hiring and management practices, in ownership and in procurement,” President Ramaphosa said.