I would like to thank you most heartily for the invitation to attend the launch of this one-stop shop for small and medium businesses, the Transnet Enterprise Development Hub. Once more, we are witness to the catalysing role of State-Owned Companies (SOC) in driving transformation in the economy, creating opportunities for new entrants who otherwise would have been precluded from economic participation if the public sector did not intervene to change this situation and their fortunes.
For SOC, this is not a nice-to-have programme, but a pivotal element of their mandate to ensure that through the capacity at their disposal, they influence significant change in the economy by expanding the frontiers of economic participation and ownership to broader groups than was the case until now.
It is the imperative of our economy to continue expanding the middle-stratum and lay the foundation for new wealth in an inclusive and shared manner. We are very mindful of the fact that we launch this Enterprise Development Hub during this month when our country shall commemorate the 57th Anniversary of the historic women’s march on 9 August 1956 in Pretoria when they demanded an end to apartheid as well as gender emancipation and equality.
For so long as we have fought against apartheid-colonialism, the women have participated in that struggle as equal partners to the men, leading from the front and committing heroic feats of struggle and sacrifices which helped to locate the issues of women right into the epicentre of the struggle for national liberation.
The resilience of these women under the leadership of Lilian Ngoyi, Helen Joseph and Sophie de Bruyn against the violent system which was later declared a gross crime against humanity was demonstration of collective commitment to social justice and helped to demonstrate the fact that women’s rights are human rights.
This month we honour and salute the women of Africa, who believed that they were the agents of political, social and economic transformation and who refused to occupy the lower rungs of the struggle and be at the periphery of progressive change.
The courage and bravery of the South African women, their vision and foresight, has ensured that throughout the period of the struggle and during the nineteen years of the liberation of our country, they have occupied an honoured place both in South Africa and beyond.
Today’s launch of enterprise development programme is in some way a tribute to them and a continuation of what they stood for and demanded.
Ladies and gentlemen,
Since government adopted economic transformation policy, South Africa has seen a change in the structure of the economy and this can be measured through African and Black participation in various sectors of the economy.
This contribution has been through public sector procurement and we have during the past nineteen years of our democracy witnessed the removal of the glass ceiling that had contained black people from progressing in the economy.
Inevitably, by brutally expropriating all black people from the soil, from the means of subsistence and from the means of labour, and forcibly converting all of them into super exploited labour, denying even the black middle-stratum except those recruited for the purpose of supporting the system and serving it against the common interests of their own folks, the apartheid-colonial system turned all black people, bar a few collaborators, into its enemies and ensured that their economic aspirations were integral into and inseparable from the entire struggle for national liberation.
However, notwithstanding the massive progress achieved during the past nineteen years, this has not changed the patterns of economic ownership and nor has this achieved the goal of combating unemployment, inequality and poverty.
The struggle for national liberation has always been based on this all-encompassing vision for the removal of these antagonisms which had found expression in national oppression based on race; class super-exploitation directed against Black workers on the basis of race; and triple oppression of the mass of women based on their race, their class and their gender.
Accordingly, the economic transformation agenda has always been based on the principles of inclusive growth and social inclusion. It does not only seek to broaden the productive base of the economy, but also expand job creation, raise productivity, improve competitiveness and promote the greening of the growth as well as the diversification of ownership patterns.
In this we understand very clearly that the pursuit of this agenda cannot be the function of laissez-faire and trickle-down policies as well as that it cannot happen without the direct intervention of and leadership by the public sector flexing its muscle.
Over the next periods of our social transformation, as we progress further away from the apartheid, the state, including through the SOC, will intensify the struggle for socio-economic freedom and use its procurement leverage even more robustly and boldly to drive this agenda for inclusive growth and a shared wealth both by expanding the SMME sector as well as by bringing more black business people on board.
The launch of the Transnet Enterprise Development Hub will expand business opportunities for smaller enterprises and new entrants, especially black-owned SMMEs, through a central portal of information.
Access to information is crucial for sustained growth. The Hub, the first of its kind in the country with an integrated approach will be a one-stop shop for entrepreneurs and potential suppliers to Transnet. Services on offer will include business development, business registration, procurement advisory services, tax registration and compliance, financial support and guidance on black economic empowerment requirements, among others.
The plan is to roll out the concept across the country and R60 million has been set aside for this and might increase in the months and years to come. R200 million will be for other enterprise development initiatives such as business incubation, financial and non-financial support focused on providing an enabling environment for small business.
R200 million will be invested annually over the MDS period, increasing as the Transnet profit itself increases. The Hub will primarily target potential suppliers to Transnet and budding entrepreneurs will also receive advice on a broad range of opportunities, including them on how to tender for Transnet business.
During the Financial Year ending in March 2013, excluding the operational expenditure, Transnet had spent an unprecedented R27.5 billion on infrastructure investment as part of its rolling seven-year R307 billion plan aimed at rejuvenating its railways, ports and pipelines.
The company has identified the need to create an enabling environment for small players to take full advantage of the economic opportunities presented by its investment programme.
Accordingly, the company will invest between R1.5 billion to R2 billion over the MDS period to support enterprise development, which is in addition to other investments such as supplier the development programme.
Additionally, the intention is to assist black-owned entities that struggle to build their businesses into sustainable and profitable entities. To date, statistics show that while small businesses in developed countries contribute around 50% to economic growth, South Africa’s small businesses contribute a disappointing 30% to the Gross Domestic Product.
One of the key growth inhibiting factors in the small business sector is access to affordable capital, information and technical assistance. The aim of this intervention is to ensure that we increase the participation of small businesses in the mainstream economy, as they have been identified as critical to unlocking economic growth as well as the pursuit of inclusive growth.
More than 12 million South Africans rely directly on small businesses for their livelihood. Small businesses in South Africa employ between 60% and 70% of the employable population.
I therefore believe that it is our responsibility as government to harness this opportunity. The Hub, which operates five days a week, is a partnership with the South African Revenue Service, Gauteng Enterprise Propeller, BEE Verification Agency, the National Youth Development Agency, Small Enterprise Development Agency and the Department of Trade and Industry’s Companies Intellectual Property Commission.
The participation of, and partnership with SARS will ensure that small businesses comply with their tax obligations whilst the NYDA will focus on entrepreneurship training and funding for black youth-owned businesses. This partnership advances economic coordination so that small businesses can reduce transactional cost associated with time lags and information.
Transnet provides the bulk of the funding while the partners provide advice and expertise on their respective areas. The partnership is expected to cultivate strategic relationships between Transnet, provincial and national economic development institutions and provide small businesses access to financial and non-financial support.
It is our firm belief that the hub will provide meaningful contribution in supporting and promoting viable and sustainable SMMEs that will have a direct impact in the economy through job creation.
In that regard, we have committed the SOC under our stewardship to take the lead in this drive and I am proud to open and announce this Hub as the first of our initiatives. Transnet has other enterprise development partners, which include the Transnet Itireleng Fund1, the Shanduka Black Umbrellas Fund2, the Transnet-SEDA Supplier Development Fund3 and the Transnet Canteen Project4.
A collaborative effort between Transnet and the Gauteng Enterprise Propeller (GEP) aimed at encouraging the participation of SMMEs in the green economy, agri-processing, manufacturing (steel related industries) and construction and which provides financial and non-financial support to Black Women Owned, Black Owned, Black Youth Owned, and People living with Disabilities companies in Gauteng province.
A non-financial services fund aimed at incubating 100 percent black-owned SMMEs, which meet Transnet’s supply chain needs, in the manufacturing and services sectors. The fund is set to benefit the KwaZulu-Natal, Richards Bay and Eastern Cape (Coega) areas.
All these partnership initiatives are a contribution towards facilitating the development of an entrepreneurial culture amongst young people and support women and a better skilled workforce, innovation, and to expand trade with national, regional and global markets.
Of course, we believe the private sector has a critical role to play in economic development but it must be coordinated better and there must be consensus between these social partners on what are the priorities for the country and how do we allocate capital and resources.
These financial driven partnerships between Transnet and various private sector companies advances is about the allocation of capital in the economy in a more and better coordinated way. We call on the financial or banking industry or other private sector companies to follow suit so that we can create decent employment for all South Africans, eliminate poverty and deal decisively with the extreme inequalities in our country.
A fund aimed at strengthening the performance of supplier firms and enabling them to be globally competitive. The target market is Black-Owned Suppliers within Transnet’s database and provides non-financial support for manufacturing and services in Gauteng province.
A fund targeting catering businesses set up to accelerate the development of Black Women-Owned Exempted Micro-Enterprises through varied non-financial support services such as office space, the use of equipment, furniture as well as specific training and mentoring interventions.