On 24 March 2023, South Africa’s Deputy President, Paul Mashatile, gave the keynote address at the BBQ Awards held at Emperors Palace in Kempton Park, Gauteng
We are grateful for the opportunity to participate in this auspicious gathering of black business excellence, and the celebration of South Africa’s business leaders in transformation, which, for the past 19 years, has advocated for the promotion of good corporate governance and sustainable economic leadership.
Your contribution to the growth of our economy, through the support of micro-businesses located at informal settlements and rural areas, which are primarily owned by black Africans, is highly commendable.
Moreover, we appreciate your effort as BBQ Magazine for keeping the transformation discourse on the national agenda through recognising pioneers in this important mission of economic transformation.
Current economic challenges
The 2023 BBQ Awards take place at the most critical time in the history of our economic transition and transformation as a country. We have just emerged from the devastating grip of the COVID-19 pandemic.
Despite the fact that our nation was affected by the same global pandemic, its repercussions have disproportionately damaged the livelihoods and well-being of those most-at-risk within our society—the black majority who already had been struggling economically before the pandemic.
On the upside, the epidemic has demonstrated the importance of the small business sector, in terms of income generation and economic upscaling across the vast majority of our nation.
As government, we remain committed to supporting the black-owned business sector, in their efforts to rebuild their businesses after the economic downturn. We have begun to have important conversations about how people in the informal economy can get the most out of what our economy has to offer.
Moreover, the devastating and disruptive effects of loadshedding on the economy and the small business sector in particular remain a major concern for all of us.
Loadshedding has cut business hours and production capacity, with the consequent result of reduced income. Businesses have also had to spend large amounts towards finding alternative energy sources to keep their operations viable.
Consequently, this has resulted in significant losses in jobs between the years 2019 and 2021, both in the formal and informal sectors. Nevertheless, the South African economy grew slightly for the second year in a row, expanding by at least 2% between the years 2021 and 2022, which represented an increase from 4.50 trillion Rands to 4.60 trillion Rands.
Nevertheless, as government, we remain fully cognisant of the negative impact of loadshedding on the country’s economy, and the inconvenience and hardship it causes to the country and businesses.
You will recall that, just over a month ago, at the State of the Nation Address, President Cyril Ramaphosa identified obstacles and highlighted interventions to unlock our nation’s potential, including lowering and eventually ending loadshedding to promote investment that is vital for economic growth and job creation. As you are now aware, the Minister of Electricity has been appointed and is currently hard at work. He will soon outline his steps to bolster the Integrated Energy Plan, which seeks to address this devastating energy crisis. We are encouraged by the factor that the Minister of Electricity has been engaging with various stakeholders, including yourselves because the long lasting solution to the energy crisis will arise out of collaborative efforts among all of us. The increase in the number of unemployed South Africans, particularly among the youth, necessitates more immediate steps to assist us in fundamentally altering our economic growth trajectory.
As the Sixth Administration of government draws to a close, we must be truthful with ourselves. We must have an open and inclusive conversation about rebuilding that which will result in increased economic activity.
We must acknowledge that there is a greater and more pressing need to support aggressive means and forms of economic integration for black-owned firms, particularly in the historically untransformed sectors of the economy.
Furthermore, in order to give various economic issues urgency, including the evaluation of how we may reinforce policies that are focused on economic emancipation, it is necessary to look at the agenda of the governing party.
We must pay close attention to how government at all levels, can create a supportive policy and regulatory environment that in turn supports the informal economy.
We need to improve the state’s overall capacity to expedite the processing of applications and approvals, in order to integrate the commercial and economic operations of unorganised players in the informal economy into the mainstream sector.
As such, it cannot be business as usual, when businesses, especially, black-owned enterprises, continue to experience the harshest types of hardship and depression as a result of a system that is unresponsive to their needs.
This includes the need to resolve the ongoing challenges of government’s non-payment and settlement of invoices due to small businesses within regulated time frames. The National Treasury requires that invoices for these critical service providers be paid and settled within 30 days.
As government, we are committed to implementing consequence management for departments and state agencies that fail to implement these requirements. We recognise that late payment after services have been rendered has significant repercussions for your businesses’ finances.
Youth and job creation
For us to be successful in guaranteeing a prosperous and sustainable informal sector, we must remember that our strength is our unity of purpose. We will be able to harness this sector and make it work through collaborating across government, with social partners, and with the business world.
We are also committed to creating more sustainable jobs, particularly for the youth. During the 2021/2022 financial year, the National Youth Development Agency grant programme has provided more than 2000 youth-owned enterprises in rural and township economies with grant funds to launch their firms.
Moreover, supported by the National Youth Development Agency funding programme and the Youth Micro Business Relief Fund, youth-owned firms have created and maintained employment of 8,600 employees in the economy. Yet, these are by no means sufficient.
We need to grow these efforts further by scaling up on investments to build skills. On our side as government, we need to sharpen our role in coordinating, facilitating, as well as unlocking opportunities for people who wish to expand their local businesses.
We believe that in the midst of our current discourse on the country’s economic trajectory, there is room for growth, development, and hope.
Another milestone from our ongoing economic reconstruction and recovery efforts is the Presidential Employment Stimulus Programme, which has enrolled one million people since its inception in 2020. As part of the largest stimulus-funded project, about 600 000 young people were hired to help teachers in more than 22 000 schools.
As we work to increase economic development and generate more permanent jobs for a much bigger population, we will expand on the positive effects of this programme.
Measures to facilitate economic inclusion and integration
While we have noted progress, for instance, in government’s efforts to restructure the economy through the Broad Based Black Economic Empowerment (B-BBEE) policy, legislative framework and other interventions, more needs to be done.
Notably, there has also been recent incidents of regression and resistance towards B-BBEE, with some organisations successfully challenging the policy in court and, as such, leading to unacceptable levels of uncertainty.
Regardless of the challenges we have faced since the B-BBEE Act was passed 20 years ago, our government is steadfast in its aim to bolster and expand economic empowerment and inclusion in all sectors.
We still affirm that this is a correct policy to pursue. However, we will be doing ourselves a disservice if we do not do a critical assessment of its impact on the economic transformation agenda as a whole.
Part of doing so requires us to answer the following questions in line with the elements of this policy:
- What effect, if any, has the B-BBEE had on the rate at which formerly marginalised people and groups acquired economic ownership? In this regard, we need to indicate what obstacles are preventing us from achieving this objective, and what we plan to do to eliminate them.
- How has B-BBEE affected the management of businesses? Or are boards and other control structures still in the hands of a minority?
- To what extent has B-BBEE contributed to employment equity in the private sector?
In 2022, the Department of Labour produced a report showing that up to 70% of all new appointments and promotions still favour white persons, despite employment equity policies. This apparent resistance to change necessitates a new strategy from government in order to realise the aims of the B-BBEE legislation.
We should ask ourselves these questions with the aim of finding solutions to include black-owned enterprises in the macro industrial sector and across value chains.
The Black Industrialist Programme and the Industrial Policy Framework
With regard to the Black Industrial Programme and our Industrial Policy Framework, our collective efforts must therefore focus on two main goals:
- One, facilitating Black Industrialists’ entry into strategic and targeted industrial sectors and value chains so that they can contribute to growth, investment, exports, and employment; and
- Two, providing Black Industrialists with a variety of pathways and instruments to increase their participation in the national economy.
Through the Black Industrialist Programme, the Department of Trade, Industry and Competition and the Department of Small Business Development will continue to lead the way in opening up business opportunities to help black businesses grow and take full part in the economy.
To that end, we should celebrate in the success of the programme, for it has helped create nearly a thousand Black Industrialists. As a result, they now have successful businesses that employ a growing number of our citizens.
Business Disruptions
However, as we foster and facilitate the growth of black businesses, we must equally guard against those who seek and employ violent means towards disrupting our economic sectors.
While the outcries and demands for economic inclusion and transformation must be supported, this needs to happen within the framework of the law.
The increasing number of reported incidents of intimidation and violent attacks on business owners in the construction, chemical, mining and transport sectors in KwaZulu-Natal, Gauteng, Western Cape, Mpumalanga and other parts of the country is not conducive to the positive image of the nation that we seek to promote, and only contributes to disinvestment and economic decline.
As a government, we strongly discourage such behaviour, and offenders must face the full force of the law. We also call on you as black enterprises to condemn and eradicate these forms of thuggery and criminality in our communities.
We also reiterate that lack of collaboration with Government renders us on a lone path in which government alone cannot create stability or fulfil the National Development Plan and Vision 2030’s goal of eradicating poverty.
We must therefore work together to expand the scope of black-owned businesses beyond the convenience store chains such as spaza shops or vehicle repair shops. Our economy has much to offer, but the informal sector, which is dominated by black-owned businesses, has not been able to take full use of it until now.
Importantly, we as government, we encourage you to come up with new ideas for establishing sustainable enterprises that will leave a legacy for future generations. Collectively, we should endeavour to establish businesses that will continue to thrive in the decades to come.
Finally, we are very grateful for the opportunity to recognise people who are contributing to our country’s economic growth and transformation.
We wish to heartily congratulate all the nominees on their remarkable achievements. Those who will be recognised as achievers should be inspired to help those less fortunate than themselves tonight.
We urge you to use your newly acquired recognition to further our country’s economic transformation goal.
Let us continue to acknowledge, encourage, and honour Black Excellence.
I thank you.
Issued by the Presidency
