Staff Writer | 10 July 2024 BECAUSE emerging property developers often face considerable challenges in getting projects off the ground, the Dube TradePort Special Economic Zone (SEZ) has introduced a long-term leasehold ownership model to unlock new opportunities. Speaking at the South African Institute of Black Property Practitioners conference at the Durban ICC, Andile Mnguni, Dube TradePort SEZ’s property investment head noted that emerging property developers often face substantial challenges in getting their deals off the ground especially in the lucrative commercial and industrial segment of the market due to unaffordable land and inadequate access to the necessary capital. However, he said Dube TradePort SEZ has noted a growing awareness and interest in the benefits of a long-term leasehold ownership model as the sector begins to adapt to a changing economic landscape. Mnguni explained: “The leasehold model can facilitate access to land, launching numerous commercially viable industrial projects by eliminating the need for property developers having to buy land upfront, and reducing the capital requirements to initiate the deals, whilst still meeting all the criteria needed to enable commercial banks to fund these notarial leasehold developments.” Notarial leasehold contracts allow investors to access land developable over long periods without the need to purchase it outright and ensure the property owner a stable revenue stream over the lease period. Mnguni added that, by lowering the initial expenditure necessary for development, leasehold agreements enabled a wider range of property developers who could add value to the commercial real estate market segment. “In the ten years since the leasehold model was implemented in the Dube TradePort SEZ, we, as the landlord, have a stake in both the overall prosperity of our property developers and their tenants in our zones.  We have worked with developers to enhance the industrial precinct, consistently funding amenities, support services, and new infrastructure, which has increased value and the overall experience of our investors in our zones.” “Furthermore, Dube TradePort SEZ has been working in tandem with development finance institutions like Ithala Development Finance Corporation Limited and KZN Growth Fund here in KwaZulu-Natal, together with some of South Africa’s development finance institutions and large commercial banks, to secure funding for emerging property developers developing with our precinct.” He added that Dube TradePort SEZ’s teams had helped with due diligence reports to enhance the business cases for these developers’ projects highlighting the leasehold’s ability to provide stable revenues for funding institutions over decades. Mnguni says: “We go as far as supporting black SMMEs with up to 15% discounts on rental rates and have worked smartly to provide linkages with established businesses within our precinct, providing them with a platform to market their products.’ “Dube TradePort has also piloted programmes where it substitutes fixed rentals and opts to take a percentage of a tenant revenue which helps the developer and its end clients’ cashflow. In the initial stages of operations, as the landlord, we are invested in the success of our developers and their clients and work hand-in-hand to ensure their growth.” The leasehold property development model will continue to evolve as it is adopted in more segments of the property market as it enables access to land, while providing consistent revenues for landowners and financing institutions. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://kznindustrialnews.co.za/leasehold-model-assists-dube-tradeport-sez-property-developers/

Staff Writer | 12 July 2024 The South African Health Products Regulatory Authority (SAHPRA) plans to introduce Black Economic Empowerment (BEE) conditions for the issuing of licences. The group’s draft broad-based BEE policy aims to promote the objectives of the B-BEE Act by factoring in the code of good practice when determining qualification criteria for licence issuing. Thus, B-BBEE elements will be added to SAHPRA’s activities related to its issuing of licenses to manufacture, wholesale, distribute, import, and export health products and permits as envisaged in section 22c of the Medicines Act. SAHPRA’s plans to implement the policy in two phases. In the first one-year phase, SAHPRA will require an applicant to submit their B-BBEE level certificate when applying for a licence. SAHPRA will then verify the B-BBEE level status. If an applicant fails to submit their B-BBEE level certificate or the certificate is unverifiable, SAHPRA will not issue a licence to such an applicant. SAHPRA will then use the information gathered to understand the industry structure. “SAHPRA will then develop, consult with industry, including relevant stakeholders and finalise criteria to be applied when licence applications are reviewed and eventually issued,” said the policy. In the second phase, SAHPRA will utilise the applicant’s B-BBEE level to review and issue licences according to the approved criteria. Business interest group Sakeliga said that the new BEE requirement offers an alarming preview of the drastic consequences of the NHI system, under which the state would control the entire medical supply chain. “The BEE licensing of health products and equipment is a grim illustration of how BEE promotes the narrow interests of politicians, bureaucrats, and self-enriching intermediaries at the expense of the public,” said Sakeliga. “It is inevitable that the addition of BEE requirements – a measure with inherently no relevance for the effective supply of medical products – will lead to declines in the quality, affordability, and availability of medical products. The stifling effect will discourage both local and international operators.” Although the policy was published last year, stakeholders will still be allowed to send comments to SAHPRA by the close of business on 9 September 2024. Larger trend Sakeliga said that the proposed licensing changes from SAHPRA are part of a more significant trend to make all economic activity subject to the state’s approval, with a particular focus on BEE. “The cover-up method followed by Sahpra, namely a first phase aimed at seemingly innocent BEE reporting to pave the way for a second phase requiring BEE compliance, is part of a pattern that manifests itself in more or less explicit terms also repeated with other regulators.” “We see similar efforts in the financial services industry, the real estate industry, in decisions of the competition commission, the telecommunications industry, the agricultural industry on issues such as water, and more.” For instance, the Property Practitioners Regulatory Authority (PPRA) said that level 8 BEE compliance (40 points) is now non-negotiable for all real estate agencies with a turnover of over R2.5 million. Jan le Roux, CEO of the Real Estate Business Owners of South Africa (Rebosa), previously said that the PPRA’s B-BBEE requirements for the next round of Fidelity Fund Certificates (FFCs) for 2025 had significantly changed. According to the Property Practitioners Act, no entity may act as a property practitioner without a valid FFC. In the past, the only requirement was a valid BEE certificate, where no minimum score was required. Le Roux added that the PPRA issued FFCs without the minimum BEE requirement, mainly for information-gathering purposes. However, this has now changed, with the PPRA doubling down on the requirement for higher BEE scores. “Regarding Rebosa’s points, while precedents may have been set in the past to allow additional time for industry alignment, it is imperative to underscore that compliance with regulations such as those set forth by the PPRA is non-negotiable,” said PPRA CEO Thato Ramaili. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://businesstech.co.za/news/government/782170/bee-changes-for-healthcare-in-south-africa-with-major-fears-over-the-nhi/

Paul Vos | 17 July 2024 Despite political uncertainty, effective implementation is vital to the success of public procurement legislation in South Africa. The Chartered Institute for Procurement & Supply (CIPS) welcomes the provisions of the Public Procurement Bill, but emphasises that its success hinges on how well it is executed. While the draft South African Public Procurement Bill is a commendable attempt to overhaul the country’s procurement landscape, its success will depend heavily on the effectiveness of its implementation and the ability of institutions to adapt to new roles and responsibilities. The Bill, touted as the solution to corruption and wasteful expenditure at a governmental level, is expected to be signed into law soon after being assented to by Parliament recently. The procurement Bill marks a pivotal moment in the country’s efforts to reform procurement processes at all government levels. It is vital if South Africa is to truly achieve its economic and social objectives and avoid a scenario where the country’s economic activity continues to shrink. Careful monitoring, ongoing evaluation, and a willingness to adjust are imperative for its effectiveness. One of the more significant changes introduced by the Bill is the establishment of a centralised Public Procurement Office (PPO), tasked with ensuring compliance, promoting standards, and fostering transparency. Centralised oversight may lead to more standardised procurement practices, reducing discrepancies and promoting fairness, but it also carries risks. There is a danger of creating bureaucratic bottlenecks, where the PPO could become a choke point, slowing down procurement processes rather than streamlining them. Over-centralisation may stifle local agencies’ ability to tailor procurement strategies to specific needs. One fundamental challenge public procurement teams face today is the overregulation of the procurement landscape, which not only creates rigidity but also stifles innovation. There is hope that the legislation will drive economic empowerment through state organs and, more significantly, serve to grow small and medium-sized enterprises, exempted micro-enterprises, beneficial ownership, and black women-owned companies. Even as acknowledged in Parliament during the election period, Black Economic Empowerment (B-BBEE) has served to make only a few citizens wealthy, while the rest of the people of this country suffer from hunger and poverty. Where BEE should have economically empowered the vast majority of our people, public sector spending runs into billions of rand, and our people are not empowered. Another issue is the repealing of the Preferential Procurement Act through the Public Procurement Bill. Questions must be raised about how the new preferential procurement framework will be rolled out and its intention to align with the BEE Act and B-BBEE Codes of Good Practice. Despite these concerns, CIPS welcomes sections 28-29 of the Bill, which advocate using technology to modernise procurement. This includes developing an ICT-based procurement system to enhance operational efficiency and accessibility. Using digital platforms is a no-brainer way to streamline procurement processes, reduce paperwork, and make opportunities more accessible. Digitisation also has the potential to deliver on the integrity and best practices for all organs of state. The expectation is that the availability of the correct data, coupled with smart analytics, will lead to the establishment of global framework agreements for homogenous spending categories across government departments. CIPS has identified Critical Success Factors (CSFs) that need to be implemented in the next two years for South Africa to benefit from the legislation: The PPO should be established within the National Treasury to perform functions related to the legislation impartially and without fear, favour, or prejudice. Every procuring institution must establish a procurement function to maintain this Act. The accounting officer of a procurement institution is responsible for defining procurement needs, implementing an efficient and effective procurement system, and preventing non-compliance by investigating corruption and tampering. No public office bearer, including an employee of parliament, municipality, or provincial legislature, may submit a bid. The minister must prescribe measures for the public, civil society, and media to monitor procurement processes with certain limitations. Suppliers may be debarred on the database for corruption, fraud, collusion, price fixing, breach of confidentiality, or non-performance. A person who commits an offence receives a fine, imprisonment not exceeding ten years, or both. In addition, the court may also order that the amount of loss incurred by the complainant must be compensated. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://mg.co.za/thought-leader/2024-07-17-effective-implementation-crucial-to-the-success-of-public-procurement-legislation/

Bizcommunity | 18 July 2024 In her address to Parliament, Minister of Tourism, Patricia de Lille, presented the Department of Tourism’s Budget Vote Speech for the 2024/25 financial year with optimism and a focus on sustainable growth. "I am deeply honoured to have been appointed as the Minister of Tourism again as it affords me the opportunity to build on the work of the past 16 months and focus on more effective implementation," Minister de Lille stated, expressing her commitment to advancing the tourism sector's agenda. Acknowledging the sector's resilience, she extended gratitude to "the entire tourism sector for all their hard work in keeping our tourism sector thriving." Highlighting the sector's pivotal role in economic development, Minister de Lille emphasised, "Tourism creates jobs, generates incomes, and creates viable communities." She underscored the importance of tourism in linking underdeveloped regions with developed ones, transcending spatial boundaries and providing socio-economic opportunities. Tourism Sector Master Plan Minister de Lille underscored the significance of the Tourism Sector Master Plan, noting it as a collaborative effort "to deliver tourism economic activity and jobs for the benefit of all South Africans." The plan aims to rejuvenate tourism supply, stimulate demand, and strengthen enabling capabilities crucial for sectoral growth and transformation. Citing global trends, Minister de Lille reported a substantial increase in global tourist arrivals and economic contributions in 2023. South Africa, in particular, saw a notable 48.9% increase in international arrivals, welcoming approximately 8.5 million tourists, with significant growth observed across various markets including Africa, Asia, Europe, America, the United Kingdom, and the Middle East. Domestically, she celebrated the resilience of South Africa's domestic tourism, which saw revenue increase to R123.8bn and a rise in total domestic overnight trips to 37.7 million, demonstrating robust local support for the tourism sector. Tourism budget allocation Turning to budget allocations, Minister de Lille detailed the Department of Tourism’s budget for the 2024/25 financial year, totalling R2.3bn. Key allocations include R1.2bn to SA Tourism for marketing South Africa as a tourist destination, R266 million for the Expanded Public Works Programme (EPWP) aimed at creating job opportunities, and R172m for various Tourism Incentive Programmes (TIP) supporting transformation and enterprise growth. Highlighting infrastructure projects, Minister de Lille emphasised the importance of maintaining and developing tourism assets such as national parks and community-based tourism projects. She noted significant investments in infrastructure maintenance across provinces, aiming to enhance visitor experiences and support local economies. Sector transformation and youth development Minister de Lille reiterated the Department’s commitment to sector transformation through initiatives like the Tourism Incentive Programme (TIP) and the Tourism Equity Fund (TEF), aimed at empowering marginalised groups including women, youth, and persons with disabilities. She announced plans to train 450 unemployed youth and enhance skills development programs to meet sectoral demands. Addressing tourism safety, Minister de Lille outlined efforts to enhance safety measures at key tourist attractions through initiatives like the Tourism Monitors Programme, deploying over 2,300 monitors nationwide. She also highlighted the importance of air access, advocating for increased direct flights to South Africa and celebrating recent improvements in international connectivity. Marketing and international outreach Minister de Lille emphasised ongoing marketing campaigns to promote domestic tourism and attract international visitors, highlighting initiatives like #TravelWiseMzansi and the Sho’t Left campaign. She praised the success of global marketing efforts and highlighted upcoming international engagements aimed at boosting South Africa’s global tourism appeal. In conclusion, Minister de Lille affirmed the Department’s commitment to advancing South Africa's tourism sector as a driver of economic growth, job creation, and social development. She urged continued collaboration with stakeholde rs to achieve sustainable tourism growth and ensure that the sector remains a beacon of opportunity for all South Africans. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.bizcommunity.com/article/tourism-budget-speech-highlights-economic-and-job-growth-361348a

TMO Contributor | 17 July 2024 Business leaders across Africa have highlighted the importance of empowering youth with skills of the future. The solution to address youth unemployment and the skills crisis lies in how we upskill and empower youth with relevant digital skills of the future before they enter the workplace.  ICT certifications are not enough to meet the rate of change needed in the workplace and secure sustainable job creation. As a result, South African companies that hire and create jobs for young people with real life practical skills that meet the current and future skills demands of business will succeed. World Youth Skills Day, observed on 15 July, recognises the importance of empowering young people with skills for employment, entrepreneurship, and sustainable development. The theme for World Youth Skills Day 2024 is Youth Skills for Peace and Development . It highlights the crucial role that young people play in peacebuilding and conflict resolution efforts. Business leaders across Africa have highlighted the importance of empowering youth with skills of the future. This needs to be in alignment with Sustainable Development Goals (SDGs) 4 and 8. There is a growing demand for AI skills across industries and job roles and youth need to be equipped with essential AI skills for future employability as well as for entrepreneurship. AI skill training needs to be inclusive, equitable and practical to lead future generations to enhance the digital skills of tomorrow. Partnership critical to address skills crisis Salesforce research has indicated that more than 60% of full-time desk workers do not have the skills to use generative AI technology – even though most of them are convinced this knowledge will advance their careers. As a result, training the next generation, as well as reskilling the current generation when it comes to AI, is a key component of the tech revolution. Ursula Fear, senior talent programme manager at Salesforce South Africa, says AI specialists need to be empowered now in order to implement best AI practices for the future. “We need to act urgently to mitigate the fact that we don’t want to have too many certified yet unemployable young people entering the workforce. Importing talent is not a long-term solution and we cannot extend the contracts of those who enter the country to fix the problem now. We need to upskill locally and ensure that we have the talent to take the vital technology sector, which contributes about 8% to the economy , to the next level,” says Fear. “South Africa requires a mindset change, and the government cannot address the skills crisis alone. It requires collaboration and partnership from the business sector to form long-term solutions that tangibly address the existing digital skills gap by providing youth with hands-on experience. “Education and tertiary certifications form a critical component of empowering our current and future ICT workforce, but what is truly needed is the provision of hands-on experience and mentorship to sustainably develop leaders and entrepreneurs of the future and grow the South African economy,” adds Fear. Gen Z needs both theoretical knowledge and practical skills “As South Africa’s youth navigate the challenges of high unemployment, it’s clear that traditional ICT certifications alone are not enough to meet the rapid changes in the technology sector,” says Vanashree Govender, media and communications manager at Huawei SA. “Gen Z requires a more hands-on approach to skills training, combining practical experience with mentorship to develop a workforce ready to meet current and future demands. Recognising this urgency, Huawei has been actively involved in advancing the youth ICT sector for a digital, intelligent future.” In line with this commitment, Huawei’s flagship programme, LEAP focuses on providing practical, hands-on experience in addition to traditional training. At the LEAP Summit 2024, Huawei announced its plan to train an additional 150 000 talents in Sub-Saharan Africa over the next three years. This initiative builds on their initial goal to equip over 100 000 people with digital skills by 2025, a target they have already surpassed. LEAP aims to foster strong digital leadership and create a skilled ICT workforce by offering a comprehensive range of activities, including ICT training and certification courses, government digital capacity building, and ICT skills competitions. This approach highlights the importance of the private sector in empowering South Africa’s Gen Z with both theoretical knowledge and practical skills, ensuring they are prepared to thrive in a rapidly evolving digital landscape. Entrepreneurship fosters creativity and resilience Teaching young people entrepreneurship skills is crucial, as it fosters creativity, resilience, and a sense of agency, benefiting both individuals and society as a whole, says Didi Onwu, managing editor of Anzisha, a three-year fellowship programme that supports young African entrepreneurs between the ages of 15 and 22. “Entrepreneurship drives economic growth by creating jobs, fostering innovation, and increasing productivity. When young people learn how to start and manage businesses, they contribute to the overall prosperity of their communities and countries. “But more than that, entrepreneurship empowers young people to take control of their destinies. By teaching them how to identify opportunities, develop business ideas, and execute plans, we equip them with the tools to shape their futures,” says Onwu. Teaching young people entrepreneurial skills encourages critical thinking, creativity, and adaptability, she adds. “They learn to find solutions, pivot when necessary, and overcome challenges, and while not everyone will become an entrepreneur, entrepreneurial skills are valuable in any career. Whether working for themselves or others, young people who understand business principles can contribute to job creation and economic stability.” Using low-code tools for simple tech skills development With more than 50% of South African employers reporting that they are recruiting essential ICT skills overseas it’s clear that there is a massive demand for digital skills training in this country. The most in-demand expertise, and one of the most challenging to find locally, is within the software development field. Zoho works with micro, small and medium enterprises to create digital literacy and provide critical skill development. Andrew Bourne, regional manager, Africa | Zoho Corporation says, “we need to future-proof children so that they are equipped to apply for jobs that require digital and development skills.” “With low-code platforms, for example, citizen developers can create complex and powerful business applications without requiring costly and lengthy training. Most low-code application development can be managed with users who only have moderate technical knowledge.” ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://themediaonline.co.za/2024/07/gen-z-needs-new-approach-to-skills-development/

BR Reporter | 23 July 2024 SAVCA CEO Tshepiso Kobile shared her ongoing conviction that the VC industry must continue to play a pivotal role in supporting high-growth start-ups and early-stage businesses. The performance of the venture capital (VC) sector in South Africa defied the downwards trend in annual deals seen since 2020 as investments hit the R3 billion mark in 2023, displaying the level of resilience that has since become synonymous with the start-up ecosystem. The Southern African Venture Capital and Private Equity Association (SAVCA) yesterday said the local information and communication technology (ICT) stole the show once again, capturing investor interest and reiterating the sector’s position as a frontrunner in economic development and innovation. This was one of the key insights to emerge from this year’s SAVCA VC Survey Launch 2024 – an annual research initiative by the SAVCA launched last week in Cape Town. SAVCA CEO Tshepiso Kobile shared her ongoing conviction that the VC industry must continue to play a pivotal role in supporting high-growth start-ups and early-stage businesses, while also enabling innovative solutions to our unique challenges as a country. “The need to continuously reflect on this question and keep a close eye on the development of the sector is why research like the VC survey is so critical,” Kobile said. “Today, equipped with the most recent data, I am proud to answer that yes, VC is alive and on a positive trajectory in South Africa – both in terms of active and sizeable deals.” This year saw total capital flow to start-ups reach more than R3bn for the first time since the launch of the survey 14 years ago in 2010. Holistically, since inception of the survey, the South African VC asset class had R10.73bn invested in 1 106 active deals. Activity by the number of deals has remained stable, with a slight decrease in 2023 as the number of entities receiving funding slowed down, with more investments going into the same companies. Notwithstanding the decrease in number of deals in 2023 (184 compared to 195 in 2022; and 186 in 2021) deal activity remained higher than the pre-Covid-levels of 162 in 2019; and 167 in 2020. “Across the continent, we have seen VC gain popularity as an investment strategy,” Kobile said. “Our economy depends on this sustained investment into our entrepreneurs and into innovative solutions that can help leapfrog South Africa into a more competitive and inclusive economy,” he said. Similar to the previous year, a noticeable feature was the growth in co-investment activity, demonstrative of corporations and foreign investors investing alongside early-stage fund managers. The ICT sector, which combines several active sub-sectors such as Fintech, EdTech, Software, eCommerce and Online Market continued to outweigh the investment activity in other sectors. ICT as a primary sector almost doubled in the number of investments compared to 2022, amounting to 87.6% (48.1% in 2022). Fintech remained the front-runner by value (18.3%) and number (14.8%) of deals, followed by Software at 9.8% of the total number of deals (6.7% by deal value). eCommerce made a significant jump from 2022-levels – a testament to the continued uptick in online shopping that was seen and rapidly developed during and after the pandemic years. In terms of the types of fund managers engaging in active deals, independent funds led the charge in 2023 at 66.2% of the total number of deals in the active portfolio of VC investments – up from 61.8% in 2022; and 57.8% in 2021. This was followed by captive corporates at 34.3%, with angel investors making up a small proportion of active deals at 7.1%. Interestingly however, the average deal size of VC transactions by angel investors amounted to R6.15 million – a relatively large value when compared to the average deal size coming from independent funds, which currently equate to R7.47 million. Safeera Mayet, head of policy and regulatory affairs at SAVCA, said they have been at the forefront of engagements with the government to create the most enabling working environment in which VCs can thrive and operate. “The most significant development of late has been the implementation of the Remote Work Visa which allows individuals employed by foreign companies to work remotely in South Africa. This legislation will go a long way towards driving growth and innovation, as well as allowing foreign workers to impart and share knowledge through their interactions with South Africans,” she said. “The next priority on the list is the South African Reserve Bank exchange control regulations that apply to technology and telecommunications (TMT) companies. In essence, SAVCA and its partners have been paramount in calling for the relaxing of exchange controls in order to attract foreign investment into TMT companies and to grow the capital base available for VCs,” Mayet said. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/economy/ict-sector-leads-the-charge-as-venture-capital-investments-in-sa-hit-r3bn-mark-ab0985d6-2eda-4983-9205-257ebaa9540a

Bizcommunity | 23 July 2024 President Cyril Ramaphosa has assented to the National Small Enterprise Amendment Bill, which streamlines the support services government provided to small and medium businesses as part of broadening participation in the economy by a greater number of South Africans. “The National Small Enterprise Amendment Act signed by the President amends the National Small Enterprise Act of 1996 to establish a new entity, the Small Enterprise Development Finance Agency, which will incorporate the Small Enterprise Development Finance Agency (Sefa), the Small Enterprise Development Agency (Seda) and the Cooperative Banks Development Agency (Sedfa),” the Presidency said on Tuesday. The Seda and Sefa are currently located within the Department of Small Business Development. The new Small Enterprise Development Finance Agency will function as a one-stop-shop for aspiring entrepreneurs and promote the development of the Co-operative Banking Institutions (CBIs). “The Act also establishes the Office of the Small Enterprise Ombud Service, which may, as part of dealing with complaints, recommend that the Minister of Small Business Development declare certain practices in relation to small enterprises to be prohibited unfair trading. “Under the new law, the Minister may make regulations setting the criteria to determine the classification of micro, small and medium enterprises as well as any legislation affecting small enterprises,” the Presidency said. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.bizcommunity.com/article/new-law-paves-way-for-establishment-of-one-stop-shop-for-small-businesses-705352a

Stephanie Allais and Siphelo Ngcwangu | 18 July 2024 The clumsy rules for employers to get training money back actually encourages them to give poor data. Continually tweaking behaviour via incentives, rules, and tools has led to a system that is simply too complex for its own good. Read Part Two of the series here . Dear Minister Nobuhle Nkabane, As academics who have worked closely with your department over many years, we welcome your appointment to lead higher education and training, convinced that you will bring renewed energy and fresh insights to an area critical to the future of our country’s young people and its economic success. It is often said that South Africa has a skills crisis, and that our education system doesn’t meet the needs of the economy. But we have an elaborate national system that asks employers every year what skills they need. So, why is training not meeting the country’s needs? Simply put, the rules and tools set up over the years to consult employers and fund their training requirements are too complex. Well-intentioned policymakers have added unnecessary complexity time and again, creating too many tools to do too many things. They end up doing none of them well and sometimes incentivise negative outcomes. Clumsy and tedious funding processes and complex, overly elaborate regulatory oversight complete the picture. The result is little coherent direction from the state in priority areas, and an inability by employers to prioritise the training they need. Effective leadership As the new minister, you could provide refreshed and effective leadership with a few simple changes. This is not about new policy, just simplification and streamlining. The system was designed to understand the skills employers need within the context of specific industries, and to encourage and support them to do the required training. Employers with an annual payroll exceeding R500,000 pay a levy allocated via the tax system to Sector Education and Training Authorities (Setas). They in turn give 20% of the money back when employers submit an annual workplace skills plan and training report. The idea is for these documents to provide insight into employers’ skills needs and show what training is taking place. Setas and the government can then direct funds to meeting training gaps by funding areas not covered by workplace training. The assumption is that because this data identifies the skills employers need, it can be used to formulate sectoral training planned by Setas. It also informs the list of Occupations in High Demand developed by the government, and a critical skills list that guides the allocation of certain work visas. The problem in the real world is that current data from employers gives very poor insight into skills needs. In some cases, employers only get their money back from the Setas if their training report matches their previous plan. This incentivises them to propose only training that will be easily achieved. The clumsy rules for employers to get training money back actually encourages them to give poor data. Some employers also only list those training programmes that will be funded by Seta. This might sound crazy, but it is the result of overly complex policy. Labour force trends Plans developed by Setas have two main funding mechanisms for skills provision: earmarked “funding windows” during which employers and training providers can apply, and bursaries. Setas decide on these based on the aggregated data obtained from employers, as well as analysis of labour force trends and other research. So, for example, employers list production workers as scarce even when they are not because they know they will need to train new employees, and grants are made available for scarce skills training. This way, they get back their levy funds to do the core training they need to do every year. Another example: where employers have crucial training by international providers often linked to suppliers of specific technology, they can’t get funding because these trainers are not accredited in South Africa. This essential training by highly regarded international providers is valued and needed by employers. So, some employers simply don’t report skills gaps in these areas because it’s a waste of their time as they won’t get money back for it. Broad-based black economic empowerment (BBBEE) employment scorecard reporting adds further complexity, and additional perverse incentives. Some employers report on skills gaps to obtain funded learnerships as cheap labour, with no plan to hire trainees once they have completed their courses. With no real skills gaps, training funding gives them subsidised labour. The system does try to deal with this: the BBBEE scorecard rewards employers if they hire staff they train. The result is that large employers reduce the amount of training they do in crucial trades, because they don’t want to be reporting training above their own skills needs for fear of being penalised for not hiring trainees once they qualify. This way, fewer young people are trained as artisans who could work in small businesses inside big companies’ value chains, and are lost to the relevant industries. Continually tweaking behaviour via incentives, rules, and tools has led to a system that is simply too complex for its own good. There are other problems facing employers in reporting their skills needs. They have to describe their workforce against the codes of the Organising Framework for Occupations, which many find cumbersome and hard to relate to their own organograms, job descriptions, and concrete requirements. So, transaction costs are huge. Additionally, the annual nature of the process mitigates against long-term planning. Equally significantly, many employers don’t participate at all. No insights are obtained from non-levy-paying members, and there is very little engagement with smaller companies, making the national data incomplete in significant ways. As a result, the government and the Setas collect data from employers that is essentially meaningless and incomplete within the context of the overall economy, then use it for planning through clumsy funding systems. Setas are supposed to be tripartite structures, accounting to employers, unions, and the government. So why are employers’ voices not stronger in the design of these systems? Again, we have good intentions backfiring. In reality, Setas are ultimately responsible to the Department of Higher Education and Training (DHET), not the tripartite structures. The DHET oversees their annual performance plans and adjudicates the strength of their sector skills programmes. The aim is positive – to make sure the Setas are doing what they should. But it does so within a complex and over-designed system that reduces oversight to box ticking instead of strategic assessment. The state is left checking allocations against designated windows, instead of making strategic decisions about economic and educational priorities. Recently gazetted changes to the rules and tools for skills planning address little of this because they don’t reduce complexity or change lines of accountability. Anticipating skills requirements across a complex economy like South Africa’s is not a simple exercise. International and local research shows that employers struggle to articulate their skills needs. But some small changes could substantially improve the data South Africa collects and how it is used. For example, Stats SA could regularly assess and analyse workplace skills needs by industry and for the whole economy. Developing insight at a sectoral level also requires understanding the skills needs of non-levy-paying companies. Industry associations could be helpful here. SETAs could be important intermediaries between the worlds of education and work, but only if they spend more time in high-level engagement with employers on their real training needs, planning and funding accordingly. Stephanie Allais is Professor of Education and Research Chair of Skills Development at the Centre for Researching Education and Labour, University of the Witwatersrand. Siphelo Ngcwangu is Associate Professor of Sociology at the University of Johannesburg. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.wits.ac.za/news/latest-news/opinion/2024/2024-07/part-1-getting-sas-skills-needs-right.html

Ashley Lechman | 23 July 2024 Sasol has announced that it is providing a fuel sponsorship to Township Entrepreneurs Alliance (Tea). The oil giant said that was in line with Sasol’s commitment to nurturing entrepreneurship in South Africa and supporting the socio-economic development of fence-line communities. The sponsorship will enable Tea to conduct its mission of developing entrepreneurs in townships, rural areas and informal settlements. Founded by Bulelani Balabala, Tea, a township organisation that has a national footprint, creates platforms for learning, information sharing, brand engagement and networking for entrepreneurs from disadvantaged communities. Eight years in operation, Tea has impacted more than 80 000 entrepreneurs through its workshops and mentoring. Tea connects the government, corporate South Africa and entrepreneurs together. The fuel that Sasol provides will help Balabala and his team travel across South Africa for their workshops for the rest of the calendar year 2024. The business workshops and exhibitions are hosted in all nine provinces, with one taking place every three weeks in a township. They aim to equip township start-ups and small business owners with soft and practical skills. Business owners walk away inspired, having gained access to practical learning, and connected with entrepreneurs. Further workshops this year will be in Ibhayi in the Eastern Cape, Sebokeng in Gauteng, Mokopane in Limpopo, Soweto and Tembisa in Gauteng. The vice president of strategic marketing for energy marketing and sales at Sasol, Zanele Hadebe, said: “As a proudly South African company, we are delighted to join leading organisations such as Brand South Africa and the NYDA (National Youth Development Agency) in developing township and rural entrepreneurs. These organisations share our passion in developing the SMME sector. “At Sasol, we understand that successful entrepreneurs in our fence-line communities hold the key to spurring economic development and job creation that benefits the whole country. “Recognising that many entrepreneurs spend a lot of time on the road and that fuel is a major cost to them, the Sasol Rewards programme is a terrific way to stretch their rand further. They can earn rewards for fuelling up and these rewards can be spent on fuel, in a Sasol Delight store or with a range of our Sasol Reward partners that include various iconic South African brands.” Balabala said: “Building entrepreneurship skills is essential to help address the youth unemployment crisis as it encourages the young people to start their own businesses. It is also vital to help existing entrepreneurs scale and grow their businesses in challenging times. “We welcome our partnership with Sasol as corporate partners play a key role in helping us to bring our vision of enabling small business owners to thrive and grow.” ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/companies/sasol-helps-township-entrepreneurs-alliance-fuel-small-business-growth-4bd02800-c5a1-4bae-8495-5e65a2d21c55

Flora Teckie | 23 July 2024 Development efforts should foster the well-being of all the members of society. They should be animated by a set of universal values such as cooperation, collaboration, trustworthiness, and justice. Cooperation and collaboration must be with the aim of eliminating human suffering and ensuring that the basic human needs of everyone is met. The Baháí International Community says: “…development means developing together. In fact it implies that development cannot be anything other than a reciprocal responsibility: that to allow development in the world around us we must first develop the world within us, but by the same token, development implies harnessing the best in the self by harnessing the best in others. This is not the simple call of ethics, but the lasting proof of the essentialoneness of humankind”. A major challenge today is creating conditions of social and economic equity among and within the nations of the world. A deep moral commitment, and a fundamental reordering of priorities, will be necessary in order to create such conditions. “Cooperation between countries is essential in eradicating the gross inequalities among nations that continue to destabilize the world”, says the Baháí International Community. Regarding the disparity between the rich and the poor – with its serious implications globally – the Universal House of Justice (the governing council of the Bahá’í international community) states: “The inordinate disparity between rich and poor, a source of acute suffering, keeps the world in a state of instability, virtually on the brink of war. … The solution calls for the combined application of spiritual, moral and practical approaches. A fresh look at the problem is required, entailing consultation with experts from a wide spectrum of disciplines, … and involving the people directly affected in the decisions that must urgently be made. It is an issue that is bound up not only with the necessity for eliminating extremes of wealth and poverty but also with those spiritual verities the understanding of which can produce a new universal attitude”. For development efforts to lead to prosperity for all inhabitants of the world, there will be need for cooperation and collaboration at all levels, and taking into account all aspects of development – moral and spiritual, ethical, emotional and intellectual. Embracing a unifying principle will facilitate both the discovery and the implementation of enduring solutions to humanity’s shared challenges. The path to achieving socio-economic development must begin at the grass roots – a bottom-up approach – involving everyone in the process of building a satisfactory quality of life. It must involve those suffering, because of inadequate food, water, sanitation, housing, etc, in both decision and action. According to the Baháí International Community, “successful development efforts require, above all, a spirit of cooperation and collaboration among the participants in the development process. The absence of such a spirit of common endeavour up to the present time – within local communities and nations as well as between countries – constitutes in our view the main reason for the limited success … and the persistence of gross economic inequalities. … The required higher level of cooperation can only be motivated by a sincere appreciation for the unity of all human beings. Only on such a basis can prejudices related to nation, race, religion, sex, and other prejudices that hinder determined and equitable development activities be eradicated”. It is also essential that all members of a community have input into decisions that affect the entire group. Through dialogue at grassroots levels the experiences and aspirations of the people can be incorporated in shaping action. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/pretoria-news/opinion/social-and-economic-equity-cf1ee963-be8d-445b-b275-864f33deb986

Seth Thorne | 25 July 2024 President Cyril Ramaphosa is betting on the success of the seventh administration by making sweeping economic reforms driven by Operation Vulindlela—and business leaders are hopeful it will pay off. Looking to turn around South Africa’s muted economy by building on previous and spearheading new economic reforms was a focal point of President Cyril Ramaphosa’s Opening of Parliament address on 18 July. Promising a new era of a “cooperation nation,” these commitments were welcomed by some prominent figures in the country’s business sector and his coalition agreement partners. They say structural reforms are crucial to turning the tide on South Africa’s lacklustre economic performance. Meanwhile, some, including University of the North West politics lecturer Dr Sysman Motloung,  told Newzroom Afrika  that it was more or less a “rehash of what we have heard before since Mr. Ramaphosa has taken office.” However, he said that it is more fine-tuned this time around to accommodate some level of policy positions of coalition partners – showing some give and take of coalition politics. The speech Ramaphosa started his speech by outlining that for a decade and a half, South Africa’s “economy has barely grown.” GDP growth in the country has averaged only 0.8 per cent annually since 2012, which has entrenched high levels of unemployment and poverty. National Treasury highlights that “power cuts and operational problems in freight rail and ports continue to disrupt economic activity and limit the country’s export potential… [while] household consumption is under pressure from high living costs, and investment remains low due to weak confidence and challenging business conditions linked to structural constraints.” Ramaphosa said that the administration, which is a co-governing agreement made up of several parties labeled the “Government of National Unity (GNU),” has three strategic priorities. These include: Driving inclusive growth and job creation; Reducing poverty and addressing the high cost of living; Building a capable, ethical and developmental state. The President placed economic growth at the centre of it. “When our economy grows, jobs are created [but] when our economy contracts, there is no job creation, and jobs are lost,” said Ramaphosa. While these three priorities have been at the top of the government’s agenda since the 2011 National Development Plan, their implementation has left much to be desired. Acknowledging this, Ramaphosa said that in order to actualise these commitments, there needs to be a continuation and expansion of “far-reaching [structural] reforms that enable growth.” The key reforms that he is referring to broadly entail the enabling of the private sector to move into areas of state monopoly through investments in hopes of improving efficiency. Treasury’s 2024 Budget Review economic review said, “To turn the tide and raise economic growth sustainably, the government is prioritising energy and logistics reforms, along with measures to arrest the decline in state capacity. “ Ramaphosa said that on top of these abovementioned sectors, they are also eying reforms to the country’s digital communications and water sectors, as well as visa reforms. “Successful efforts to improve the fiscal position, complete structural reforms, and bolster the capacity of the state will, in combination, reduce borrowing costs, raise confidence, increase investment and employment, and accelerate economic growth,” the National Treasury previously wrote. This was music to the ears of big business in South Africa. Prior to this speech, Business Leadership South Africa (BLSA) and Business Unity South Africa (BUSA) told BusinessTech that the seventh administration’s focus should be the continuation of structural economic reforms that have begun under the previous administration to address the issues facing economy. BUSA CEO Cas Coovadia said that “the partnership between business and government on energy and logistics,” among other sectors, is key to doing this. Presenting the ministry’s R33.2 billion budget vote speech on 17 July 2024, Finance Minister Enoch Godongwana hailed the structural reforms in the electricity sector and highlighted that other sectors will follow. “While these reforms continue, National Treasury is working on signing memoranda of agreement, similar to the agreement that governs the Independent Power Producers Office, in the transport and water sectors,” said Godongwana. “The aim is to fast track, in a programmatic way, private sector participation in these sectors,” he said. Motloung told Newzroom Afrika that the emphasis on resuscitating and expanding pubic-private partnerships across various sectors could be a key indicator that South Africa is in full swing of a coalition government. He said that this focus in the speech, although not entirely new, shows “a more nuanced influence of the Democratic Alliance’s (as well as other parties in the GNU)” towards economic policy. The push for forms of Private Sector Participation has, however, categorised much of President Cyril Ramaphosa’s tenure. “Since the partnership began, the private sector has contributed more than R170 million of direct support and has mobilised over 350 technical experts,” wrote Ramaphosa in a weekly newsletter just before the elections. Operation Vulindlela 2.0 Operation Vulindlela (OV) is a collaborative initiative by the Presidency and National Treasury aimed at accelerating structural reforms to support South Africa’s economic recovery. According to the Presidency, structural reforms are crucial for reducing costs, encouraging competition, and fostering a more efficient and competitive economy. Its goal is to improve critical network industries like electricity, water, transport, and digital communications, alongside reforming the visa system to attract skilled workers and tourists – seeing that improvement in these areas will, over time, jumpstart the country’s muted economy. Martin Kingston, the chair of Business for South Africa, said that OV has thus far “been successful in addressing many of the constraints in the system.” Ramaphosa said that these earmarked sectors and regimes will be continued in the new administration. During the Opening of Parliament speech, the implementation of the “second phase of Operation Vulindlela” was announced. The President highlighted that a particular focus will be placed on local government – and the numerous woes within some, including collapsing service delivery, which has hampered business and spooked off investment. “In its second phase, Operation Vulindlela will focus on reforming the local government system and improving the delivery of basic services,” said Ramaphosa. “This focus is critical to enable the success of key socio-economic reform objectives,” said BLSA CEO Busisiwe Mavuso. Ramaphosa said that they would establish an institutional structure and funding model for local government and implement systems to appoint capable individuals to senior municipal positions, with independent regulation and oversight of the process. This is one of the first times that the ANC has acknowledged that local government challenges are deeply rooted in systemic and structural problems. “Municipalities are in dire need of assistance to overcome the many challenges they face, from water infrastructure to waste management,” which repels investment, said Mavuso. “The focus on appointing capable and qualified people to senior positions in municipalities should be applauded [as] we have seen the impact indebted municipalities have on the overall system, including the electricity and water sectors,” she added. The focus of OV on local government was also welcomed by BUSA’s Khulekani Mathe, saying that “from a business point of view, we are happy with these priorities.” However, “we now expect the government to get down to work and make these not just priorities on paper, but a lived reality of all South Africans,” said Mathe. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://businesstech.co.za/news/government/783871/ramaphosas-big-bet-to-save-south-africa/

Creamer Media | 26 July 2024 As South Africa grapples with a youth unemployment rate of 59.7% in the first quarter of 2024, the challenges faced by young individuals in securing employment opportunities are stark. In the midst of this concerning statistic, leading drilling technology provider Rosond is making significant strides to empower young people. It offers specialised training programmes, offering them invaluable skills and avenues for career advancement. This commitment to youth development comes as a timely celebration as it coincides with World Youth Skills Day on 15 July. It was declared by the United Nations General Assembly in 2014 to celebrate the strategic importance of equipping young people with skills for employment, decent work, and entrepreneurship. The day highlights the role of education and training in preparing young individuals for the future. This year’s theme, ‘Youth Skills for Peace and Development’, underscores the crucial role young people play in peacebuilding and conflict resolution. Given the challenges faced by youth today – such as violent conflicts disrupting education, a polarised online environment , and economic inequality – it is essential to equip them with the necessary skills for fostering a culture of peace and promoting sustainable development. By doing so, we can build a more just, inclusive, and sustainable future for all. According to MD Ricardo Ribeiro, the company’s dedication to nurturing young talent within the drilling industry is paramount. With training centres strategically located in Thabazimbi, Rustenburg, Fochville, and Kathu, Rosond offers a comprehensive range of operational training courses. These courses cover a spectrum of essential skills including health and safety , First Aid, basic firefighting, working at heights, lifting equipment operation, machine-specific training , and leadership and management development. Crucially, all training provided by Rosond is accredited by the Sector Education and Training Authority (SETA) and encompasses various Original Equipment Manufacturer (OEM) programs. Central to Rosond’s training ethos is the quality of its instructors. All training staff are accredited assessors, facilitators, and moderators, ensuring the highest standards of education delivery. Moreover, Rosond collaborates with preferred external providers when necessary to enrich its training offerings. Beyond in-house programmes, Rosond extends opportunities to young individuals through a range of learnerships, covering disciplines from contact centre operations to project and business management. Additionally, the company provides bursaries for various fields such as geology, IT, and engineering , further expanding the horizons of aspiring young professionals. Ribeiro’s message to all youth considering entering the industry is to “embrace all your opportunities and never feel that training or development is above or below you. You have the power to direct your own future. Anything is possible with the right mindset, training , and perseverance.” In addition to skills development, Rosond places a strong emphasis on ensuring operational proficiency and safety among its employees. Through rigorous training and performance evaluation protocols, the company identifies and addresses proficiency gaps, striving for optimal levels of performance. Customising training programmes to suit the specific requirements of each project , Rosond collaborates closely with clients to deliver training solutions without compromising on quality or effectiveness and ensuring it achieves its goal of Zero Harm on all its operations . The training department at Rosond plays a pivotal role in designing and developing educational materials tailored to employees at all levels, from novices to management personnel. A dedicated team of ten full-time trainers manages the operations of the four training centres, extending their expertise to projects in neighbouring countries such as Botswana and Mozambique. As Rosond continues to champion youth development through its training initiatives, the company underscores the importance of investing in the next generation of talent. By equipping young individuals with the requisite skills and knowledge, Rosond not only addresses the pressing issue of youth unemployment, but also fosters a more inclusive and dynamic workforce within the drilling industry. “As we acknowledge world youth skills day, our commitment to empowering young people serves as a beacon of hope, inspiring a new generation of skilled professionals to chart their paths towards success,” concludes Ribeiro. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/rosond-develops-the-next-generation-of-drilling-industry-professionals-2024-07-26