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