The recently relaunched Black Business Council (BBC) on Thursday said that a game-changer was required, particularly for small and medium-sized enterprises (SMEs), to put the country on an effective job creation path.
While black economic empowerment (BEE) and the inclusion of black-owned businesses into white-owned organisations, would still play a significant role, black-owned business should be enabled to step up and achieve its own aims, said BBC president Ndaba Ntsele.
“We want to change the game, we want to do things ourselves,” he emphasised.
BEE should not be the “centre stage” for enterprise development, but should rather be seen as an enabler, added BBC CEO Xolani Qubeka. He believed that the country was not completely focused on enterprise development that effectively benefited SMEs and skills development.
“We want to create people that are going to work, going to form these companies and going to be hands on. We are not pushing ourselves to the highest levels,” said Ntsele.
Black-owned businesses incorporated in organisations under BEE regulations fell under a broad-based grouping, which meant that the business was not fully participating in the industry, resulting in the lack of skills transfer or further skills development, he said.
The business council also called for the formation of a Ministry dedicated to small businesses in South Africa.
BBC secretary general Sandile Zungu believed that SMEs held the key to the challenges of youth unemployment and entrepreneurship. However, the lack of adequate focus on SMEs was a cause for concern.
“The historical problems of lack of access to funding, delayed settling of invoices, lack of adequate skills remain the order of the day,” he added.
A ‘Ministry of Small Business’, focused on dealing with funding and developing SMEs, could create more jobs and allow for increased budgets, further enabling smaller businesses, BBC VP Lawrence Mavundla said.
“The issue we have with job creation could be a problem of the past as small business could be the greatest enabler of job creation,” he added.
Further, Qubeka said that, under a memorandum of understanding signed earlier this week with the United Nations Development Programme, the issue of enterprise and supplier development would be examined.
The agreement, in partnership with Business Unity of South Africa (Busa), would involve the development of a supplier programme that would allow for the formation of a partnership between corporate organisations and SMEs to boost the latter’s sustainable participation in the value chain.
Zungu noted it would initiate a step change in the way black-owned businesses are enabled in the industry and would bolster the aims of transformation in, besides others, the mining sector.
“Only 3%, or R6-billion, worth of products and services is sourced by mining companies from black-owned companies. We estimate that mining companies spend more than R200-billion on goods and services,” he said.
He said that the mining sector required “revolutionary” change, noting that extra-constitutional measures were ineffective.
“We believe that the investment in mining-related infrastructure by the State should be met with a reciprocal commitment by the exporters of bulk commodities to beneficiate locally,” Zungu explained, adding that restrictions should be introduced to limit the wholesale exporting of unbeneficiated bulk commodities, precious metals and other minerals.
Further, BBC said that while it supported the youth wage subsidy, which would incentivise employers to take on young workers, the country should be cautious in its implementation.
Zungu said the subsidy could create close to 500 000 jobs, but added that it could placed senior workers at a disadvantage as employers could be dissuaded from retaining senior employees in favour of cheaper, younger employees.
The Congress of South African Trade Unions is opposed to the subsidy for workers under the age of 30 whose salaries are below the personal income tax threshold. Government plans to pay the subsidy for a maximum of two years and proposed a maximum value of R12 000 a year.
Inclusive multilateral social dialogue with the National Economic Development and Labour Council was required to ensure the implementation of the subsidy would achieve the aims it was designed for and chart a reasonable way forward, Zungu added.
BBC was formally relaunched in March, after a number of black business formations expressed unhappiness with their treatment within Busa. The BBC was dissolved in 2003 when it merged with Business South Africa to forge Busa.