Search Results

The Presidency | 11 October 2023 President Cyril Ramaphosa will on Thursday, 12 October 2023, brief the National Council of Provinces (NCOP) on key developments in the country, including the economic advancement of women and efforts to overcome widespread unemployment among young South Africans. The President will outline Government’s approach to these and other matters in a Questions for Oral Reply session in the National Council of Provinces in Parliament, Cape Town. Among questions put to the President are the outcomes of the recent XV BRICS 2023 Summit and action against construction mafia. The President will discuss the outcome of the 2023 BRICS Summit and South Africa's plans to use the outcomes to advance Agenda 2063. The President will also outline Government's progress in institutionalising gender mainstreaming across departments, provinces, and districts for gender equality through responsive planning, budgeting, and reporting. He will also address progress in advancing the economic empowerment of women, especially in townships and rural areas. Regarding the Government's commitment to global climate change mitigation efforts, the President will elaborate on the balance between ensuring an uninterrupted electricity supply and contributing to climate goals. On youth unemployment, the President will set out Government's initiatives and collaboration in developing a comprehensive youth employment and economic empowerment strategy. The NCOP Questions for Oral Reply will take place as follows: Date: Thursday, 12 October 2023 Time: 14h00 – 17h00 Venue: NCOP Chamber, Parliament, Cape Town ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.thepresidency.gov.za/press-statements/president-update-national-council-provinces-empowerment-women-and-youth-employment

Intra-group procurement spend is a normal part of spending, especially for groups of vertically connected companies, which in many cases is a sizeable amount. Internal procurement between holding companies and their subsidiaries must be included in an organisation’s Total Measured Procurement Spend as per Statement 400 of the Amended General B-BBEE Codes of Good Practice. Paragraph 5.1.2 states: Intra-group procurement: all goods and services procured from subsidiaries or holding companies of a Measured Entity (BEE Credentials of the entity supplying goods and/or services must be confirmed in the way of a BEE Certificate). Requirements for Consolidated B-BBEE Verifications amongst a group of Entities will have an impact on the above. Enterprise & Supplier Development Services are available to Members to assist in understanding the Intra-Group Procurement spend.

Virtual informal learning, otherwise referred to as distance training, has become the norm over the past few years. Providing evidence of a training intervention according to the Skills Development requirements, includes an attendance register or certificate of attendance (not limited to). However, virtual learning or distance training sometimes poses a challenge in terms of producing an attendance register. Some members have arranged for an attendance register to be shared via email or on a document sharing platform at the end of the training initiative which records the attendees for each session allowing the learners to sign once for all sessions. There is no official clarity on how an Entity should record attendance for a virtual learning or distance training intervention, but it would be important to provide evidence in some form that indicates that the training initiative has taken place. Skills Development Services are available to Members in assisting with collating evidence for virtual learning or distance training.

Generally, expenses on bursaries for employees do not constitute Skills Development Expenditure if an organisation can recover any of the employee's expenses or if the grant is conditional in any way. However, the following two conditions are acceptable as part of an employee obligation whereby expenses will be recognised: Successful completion of studies within an identified period; or The continuation of employment for a stated period following the successful completion of their studies which does not extend the period of their studies. We encourage Members to align conditional obligations for Bursaries to requirements under B-BBEE legislation. Skills Development Services are available to Members in assisting with developing sound Bursary strategies.

Business Day | 10 October 2023 Continent's entrepreneurial environment is particularly adept at developing the skills so highly prized, says Standard Bank. Despite a youthful and largely literate demographic, the current narrative is that Africa’s skills don’t match the needs of a rapidly evolving digital and knowledge-based global economy. The global tilt to remote working during the Covid-19 pandemic only worsened Africa’s critical skills shortage as the continent proved fertile hunting ground for global companies seeking affordable new-economy skills. It is expected that shrinking workforces in many developed economies are only likely to deepen the import of skills from African environments offering lower wages and less competitive urban lifestyle propositions. Standard Bank is Africa’s largest bank, employing over 50,000 people across 20 markets on the continent. As such, the bank is acutely aware of the efforts of its clients’ businesses as well as its own operations in developing and retaining skills. In Standard Bank’s view, a different skills landscape emerges. Many of Africa’s urban and peri-urban centres, for example, are rich in services skills, such as hair and beauty, retail, insurance, bookkeeping, actuarial, light engineering and motor repair, plumbing and electrical services. Since these skills are hard to market and deliver online, they often find themselves locked inside Africa’s urban and peri-urban centres. That said, Africa’s relatively well-educated and largely English and French-speaking populations are already commanding a large segment of global call centre employment, with extensive investment by insurance, technology and logistics companies and other online service providers in key urban centres. As infrastructure development improves across the continent and global digital networks grow, Africa’s pool of previously isolated urban and peri-urban skills will become increasingly relevant to broader African as well as international markets. Across Africa, Standard Bank has invested heavily in enterprise development, including programmes aimed at developing entrepreneurial skills. Most of these initiatives focus on strengthening collaboration and co-ordination among different actors in the skills ecosystem. This is largely achieved by partnering with African businesses, business schools, industry associations, universities and other social partners to provide training or build capacity and skills. From Uganda to SA and Kenya to Cote d’Ivoire, Standard Bank is involved in hundreds of programmes assisting African entrepreneurs develop finance, auditing, marketing, human resources, compliance, legal, corporate governance, and data and information management skills. This experience has shown Standard Bank that Africa’s less regulated and highly entrepreneurial business environment, requiring multitasking, independent thought and decision-making, is particularly adept at developing the higher-order holistic thinking, management and complex communication and solutioning skills so prized in the new global economy. While these abilities often add to the global attractiveness of African management skills, the independent, entrepreneurial and adaptive nature of Africa's management culture make the continent a sought-after training ground in marketing, logistics, sales and management. Many Chinese companies, for example, deliberately place their younger staff in Africa during their formative years to develop the critical independence of thought and self-motivated solutioning skills required in the new economy. In addition to running graduate training programmes informed by each country’s unique business contexts, Standard Bank also deploys its own platforms to support entrepreneurial skills development. The bank’s Backbase business platform in partnership with Microsoft, for example, assists client businesses across Africa access cloud-based accounting services. Similarly, Standard Bank’s Unayo global digital platform as well as its OneFarm Share online agricultural marketplace provide Africans access to the global digital economy via simple hand-held devices. Finally, Standard Bank’s own internal enterprise banking training programmes assist client-facing bankers support African entrepreneurs to start up, grow and win. Without ignoring the skills shortages that the continent faces, as a bank committed to driving Africa’s growth, Standard Bank’s privileged view of Africa reveals a much more innovative and dynamic skills ecosystem, alive to the continent’s rich opportunity and diverse challenge landscape. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.businesslive.co.za/bd/business-and-economy/2023-10-10-native-africa-has-what-it-takes-to-thrive-in-the-new-global-economy/

Bonga Ntuli | 10 October 2023 The construction sector must adopt a focused approach to social, economic, and environmental justice. SA finds itself amid a complex web of social, economic and environmental crises. While some progress has been made towards achieving the universally endorsed sustainable development goals (SDGs), the persistent legacy of segregated development continues to hinder the country’s pursuit of sustainable and inclusive economic growth. Despite being classified as an upper middle-income nation and boasting one of Africa’s largest economies, SA grapples with an alarming distinction: it holds the world’s highest ranking for inequality and unemployment rates. Compounding this, during a global era of climate upheaval the nation stands as Africa’s leading polluter, contributing the highest volume of carbon emissions across the continent. To bolster governmental endeavours towards realising the SDGs, diverse sectors in SA must closely monitor the social and environmental resources cultivated through their corporate social investments. It is paramount for each sector to ensure these resources possess the capacity to yield sustainable, inclusive returns in social, economic and environmental domains. At the crux of all three dimensions lies the most pivotal resource — human capital. This encompasses the reservoir of skills individuals employ to create economic value in their surroundings. However, to transcend the focus merely on economic gains the concept of human capitalisation must evolve, transforming into a process that not only generates profits but enriches transferable human proficiencies and contributes to environmental rejuvenation. Traditionally, the human capitalisation process starts in formal education institutions and extends through professional development in employment or entrepreneurial ventures. In SA, though, a significant portion of the population — a staggering 48.3% of the unemployed in the first quarter of 2023 — becomes entangled in the human capitalisation value chain and falls by the wayside. Among the unemployed, 48.3% hold education levels below matric, 40.7% possess matric as their highest educational attainment, a mere 2.7% hold tertiary qualifications, 7.5% boast other tertiary qualifications, and 0.7% are classified under the category “other”. Further worsening the issue, 44.7% of the working-age population between 15 and 34 years old remained classified as not in employment, education or training. This demographic, lacking matric qualifications and devoid of participation in formal learning, emerges as the most susceptible to unemployment. Added to this, more than 716,000 graduates applied for the monthly R350 social grant in January 2023, according to officials. In a nation where human potential languishes, the repercussions extend across society, fuelling social regression. The consequences ripple across the socioeconomic spectrum. A survey by PwC, “Global Workforce Hopes & Fears 2022”, highlights the factors contributing to the worldwide loss of human capital in recent times. The survey underscores that instilling personal fulfilment and empowerment in social institutions holds the potential to amplify wellbeing and productivity across these establishments, yielding positive outcomes on individual, professional, and even societal levels. Strategies promoting personal fulfilment and empowerment necessitate the development of specialised, scarce skills, equipping individuals to navigate market dynamics and respond innovatively. PwC emphasises that “leaders must recognise that employees can either be a force multiplier or a detractor. Research ... reveals that the workforce represents the foremost risk to growth, while also serving as the primary conduit for implementing growth-orientated strategies.” To augment corporate social impact during upskilling employees should extend beyond specific job requisites. The emphasis should pivot towards cultivating transferable skills, enabling continuous reinvestment in lifelong learning and multifaceted growth. Additionally, corporations can bolster environmental impact by empowering workers with an awareness of their role in fostering environmental growth, nurturing active citizenship. In particular, the construction sector in SA possesses untapped potential for social, economic and environmental justice impact. While recognised for its contribution to the nation’s economic advancement, the sector’s potential effects on social and environmental justice remain largely uncharted. According to the UK Chartered Institute of Building’s socioeconomic analysis, the construction industry wields influence beyond conventional metrics of human productivity and environmental alteration. It substantially shapes individuals’ psychological wellbeing and, on a broader scale, fosters social cohesion. This sector bears responsibility for erecting and maintaining homes, schools, workplaces, hospitals, roads, bridges, and various essential infrastructure that is pivotal for enhancing citizens’ quality of life. Given the constant global push for sustainable and inclusive economic growth, SA’s construction sector must adopt a focused approach that concurrently fosters social, economic, and environmental justice in the built environment. For instance, the sector could establish continuous professional development initiatives to upskill low-level construction workers in green building practices. This would not only empower workers with transferable green construction skills, applicable both in their communities and across diverse industries, but heighten awareness of collective climate action as an imperative of active citizenship. Consequently, individuals would be equipped to contribute to ecosystem regeneration in their own capacity. And only then can we start to realistically deal with the challenges of a low human capitalisation rate, high unemployment and poverty in our country and its communities. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.businesslive.co.za/bd/opinion/2023-10-10-bonga-ntuli-dealing-with-sas-neglected-human-capital-potential/

Alex Mitchley | 10 October 2023 In the last decade, the population in South Africa has increased by around 10 million people, with a total of 62 million people living in the country, according to the 2022 census. Statistics South Africa released the fourth democratic census on Tuesday. The last census was published in 2011. According to the data, there are 62 027 503 people in South Africa compared to the 2011 census, which recorded 51 770 560 people. This translated to a population growth rate of 1.8%. Compared to the first democratic census published in the '90s, the population increased by more than 20 million people from 40 583 573 recorded in 1996. The census also showed that there are more than 2.4 million international migrants in the country, which equates to around 3% of the total population. Most of the international migrants come from the SADC region. Around 45.5% of international migrants come from Zimbabwe, 18.7% from Mozambique, and 10.2% from Lesotho. Population composition Black Africans remained the dominant population group, accounting for 81.4% of the population, which translates to around 50.4 million. The black African population increased by around 9 million compared to the 2011 census, which recorded around 41 million black people. The coloured population accounted for 8.2% or around 5 million people, followed by white people at 7.3% or 4.5 million people. According to the data, the white population has steadily declined from 11% of the total population in 1996 to 8.9% in 2011 and then 7.3% in 2022. The Indian and Asian population accounts for 2.7% of the total population. Women constituted 51.1% of the population, while men accounted for 48.5%. Population distribution by languages spoken at home IsiZulu remains the language most spoken at home, accounting for 24.4%, followed by isiXhosa at 16.3%, Afrikaans at 10.6% and Sepedi at 10%. Around 8.7% of the population speak English at home. IsiZulu speakers increased by 1.7% compared to 2011, while isiXhosa speakers increased by 0.3% and Afrikaans speakers decreased by 2.9%. Religion The majority of the population reported that they were Christians (85.3%) followed by traditional African religions (7.8%). Around 1.6% of the population subscribed to Islam, while 2.9% said they had no religious affiliation. Population by province Gauteng and KwaZulu-Natal remained the most populated provinces, with 15 million and 12.4 million people living there, respectively. The Western Cape has a population of around 7.4 million. The Northern Cape has the smallest population of around 1.3 million people. In terms of internal migration, Gauteng dominated, receiving more than a third of all internal migrants, followed by the Western Cape with 15%. In the last decade, KwaZulu-Natal, Limpopo, the Eastern Cape and the Free State experienced an outflow of people. Housing Based on census 2022 findings, a total of 17.8 million households were recorded in South Africa, an increase from the 14 million households recorded in 2011. This includes formal and informal dwellings. Gauteng with 5.3 million households and KwaZulu-Natal with 2.9 million, account for just under 50% of all households in the country. The Northern Cape recorded the fewest households at 330 000. According to the data, the number of households who reside in informal dwellings has declined from 13.6% in 2011 to 8.1% in 2022. Meanwhile, households residing in formal dwelling units increased to 88.5% in 2022 from the 65.1% recorded in 1996. Homelessness The census also looked at collating the number of homeless people in South Africa. Around 55 719 people were recorded as homeless in 2022. Of these, 44 512 were roofless while 11 207 were in shelters. Gauteng recorded the highest number of homeless people at 45.6% followed by the Western Cape at 17.5%. As a metropolitan area, the City of Tshwane recorded the highest proportion of homelessness. Most people recorded loss of job/income (41.3%) as the reason for their homelessness, followed by alcohol and drug use (25%). Access to basic services The census 2022 recorded an upward trend to access to basic services from 2001 to 2022. In 2022, more than 80% of households in the country have access to piped water, either inside their dwellings or inside their yards. More than 90% of households have access to electricity for lighting, an increase from the 58% recorded in 2011. The Western Cape has the largest population that has access to electricity, 88.7%, followed by Gauteng with 85%. According to the data, there has been an upward trend in accessing the internet since 2011, which has been attributed to the rapid advancement of communication services such as cellphone ownership. Households with no access to the internet decreased from 64.8% in 2011 to 21.1% in 2022. Around 60.5% of households access the internet using cellphones and other mobile devices compared to 16.3% in 2011. Education According to the latest census, around 73.4% of the population aged between 5 and 24 attended educational institutions in 2022. This represented a 3% increase since 1996. The census notes that black African and coloured populations tend to be concentrated in the secondary level education which suggests higher dropout rates and limited progression to tertiary education. Conversely, the white, Indian and Asian population groups are more likely to be concentrated in the completed secondary level and post-secondary education levels. Meanwhile, more than 2.5 million people 20 years old and older reported having no schooling education, around 11.8 million completed some secondary schooling, with around 14.1 million people completing high school. Collation of data The 2022 census was the first-ever digital census conducted in South Africa. The information was collected via a digital questionnaire using three different modes of collection, including computed assisted personal interviews where field workers visited households and conducted the interview with a handheld device. In addition, telephone interviews were conducted, and the public was also able to complete the questionnaire over the internet. The collection of the population and housing data started on 2 February 2022 and ended in May 2022. Statistics SA received more than 20 million questionnaires from households, which formed the basis of the population and housing statistics. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.news24.com/news24/southafrica/news/sas-population-swells-to-62-million-2022-census-at-a-glance-20231010

Shona Buhr | 6 October 2023 If we get behind our small businesses, we can address unemployment. This is according to the Minister of Small Business Development, Stella Ndabeni-Abrahams, speaking at the South African Breweries (SAB) inaugural Beyond Awards in Sandton, Johannesburg on Tuesday. In an interview with Sunday World, Ndabeni-Abrahams explained how unemployment is squashed by the hands of small businesses. She said experience across the globe has demonstrated that the majority of jobs are created by small and medium enterprises. She added that our own National Development Plan tells us that 90% of jobs would come from small businesses, and that small businesses are seen as catalysts for the much-needed economic growth and engines for job creation. The minister described the relationship with SAB as one of the critical stakeholders and partners in the empowerment and development of small businesses. “We continue to work with SAB in our efforts to build a strong and sustainable small business sector,” she said. In a celebration of commitment to championing sustainability, the platform shines a spotlight on African organisations and individuals who have made a noteworthy impact through their sustainability initiatives. Ndabeni-Abrahams gave the award ceremony a thumbs-up, stating that the awards serve to motivate small businesses and encourage them to aspire to be better. “It is also a platform for businesses to learn from each other.” Winners for each category were as follows: Sustainable Development Goals Champion Award This prestigious award recognises the organisation with the most comprehensive and impactful overall contribution towards the attainment of the 17 Sustainable Development Goals. Winner: Woolworths Holdings Ltd. Sustainability Report Of The Year Award This award celebrates the most comprehensive, relevant, and engaging sustainability report. Winner: Sun International. Sustainability Project Of The Year Award This award recognises an initiative in the sustainability area which has had outstanding impact in the African continent and is scalable and sustainable. Winner: Tweak Carbon African Trailblazer Award This special recognition goes to remarkable individuals who have significantly contributed to advancing sustainability in Africa. These individuals may come from various fields, including business leaders, media personalities, civil society activists, or government officials – and they have all left a lasting footprint in the realm of sustainability. Winner: Dr. Jaisheila Rajput. Diving into what small businesses can do to become sustainable she mentioned some much needed traits. She said: “One key determinant is the resilience and determination of the entrepreneur, his ability to identify business opportunities and grab them, business, financial and marketing management skills. “However, there are also other factors that are external to the entrepreneur. Small businesses need an enabling environment to thrive and become sustainable. Among these are market access, financial support, a supportive policy and legislative environment.” Ndabeni-Abrahams put a stamp of approval on the moves that small businesses were recently making. She said the contribution of SMMEs to the economy has been impressive despite the increasingly difficult economic conditions. “We are determined to strengthen the small business sector to enable it to occupy its rightful place in the mainstream economy. “The tax revenue collected from SMMEs also demonstrates that this sector is increasingly becoming a force to be reckoned with.” ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/business/support-our-small-businesses-says-minister-ndabeni-abrahams/

Frik Boonzaaier | 9 October 2023 In the dynamic landscape of labour regulations, compliance with employment equity (EE) reporting holds significance for organisations aiming to foster inclusive and diverse workplaces. The Department of Labour's recent EE Roadshow has shed light on key updates and insights for the 2023 reporting period. The reporting period commenced on 1 September 2023, encompassing both manual and online submission methods. Manual EE submissions close on 1 October 2023, while online submissions will be accepted until midnight on 15 January 2024. These dates mark critical milestones for organisations to present their EE reports, ensuring alignment with legal requirements and demonstrating their commitment to equitable workplaces. A prominent aspect highlighted during the roadshow is the absence of an effective date for impending amendments to the Employment Equity Act (EEA), therefore the 2013 Amendments to the Act remain for this reporting period. This situation carries several implications: Inspections will continue as per the regulations outlined in the 2013 Amendments. Businesses with less than 50 employees but surpassing the turnover threshold must still adhere to designated employer obligations. Companies transitioning from designated to non-designated status after the effective date are advised not to deregister if they require a Certificate of Compliance. Expiry of existing EE Plans or imminent expiration necessitates proactive action, as inspections can occur before the effective date. Furthermore, while the duration of EE Plans remains unamended (between one to five years), uncertainty persists regarding the practical implementation of shorter durations than the five-year duration of each round of Sectoral Targets. The concept of Sectoral Targets emerged as a pivotal topic during the roadshow. The demographic transformation benchmark remains the Economically Active Population (EAP), while Sectoral Targets serve as interim milestones toward achieving EAP goals. An important point highlighted is that transformation should occur through natural attrition, avoiding dismissals or retrenchments. The formulation of Draft Sectoral Targets followed a comprehensive process, involving stakeholder engagements, written submissions, EAP data analysis, B-BBEE Sector Codes, and unique sector dynamics. These targets serve as more flexible benchmarks than rigid quotas, affording designated employers the ability to self-regulate and consult employees in their pursuit of achieving 5-year Sectoral Targets. In cases of failure to meet these targets, explanations justifying this can be provided, adding a layer of adaptability to the process. “The evolution from rigid quotas to flexible Sectoral Targets underscores a strategic shift towards equitable workplaces through collaborative transformation. Companies should seize this opportunity to engage with their employees, adapt their EE Plans, and embrace diversity and inclusivity as their corporate ethos. Ultimately, EE reporting is not merely a regulatory obligation but a testament to an organisation's commitment to equality and fairness in the modern workforce. “Employment Equity can add enormous value to an organisation, provided it is understood and implemented correctly. If we are truly committed to transformation and if we approach the EE Plan and EE Report effectively, it offers a structured approach which addresses both the transformation of a business, as well as ensuring compliance with the legislative employment equity framework.” Tips for successful reporting: Accuracy: It goes without saying that your report needs to be accurate and honest. Consultation: It is important that both the EE Plan and EE Reports are consulted through an EE Committee, the members of which are nominated by their peers. These members must have a thorough understanding of the Employment Equity Act. Report against the plan: I cannot stress this enough: you need a plan to be able to submit a proper report. It is fraudulent to submit a report without a plan. The BEE Chamber meets with clients, assisting them with drafting a compliant and transformative Plan, or adapting their plan to be achievable. Businesses can prepare an EE Plan which spans between one and five years, with three years being the most common. The optimal duration will be based on the size and nature of the business. Time: The size of a company impacts the time needed for reporting. It is a simple task for a small company, especially with the EAA2 Report (which includes the latest workforce profile, historical staff movements, as well as a focus on skills development). However, allow adequate time if you are a large business, especially for completing the EEA4 Report which looks at differences in the terms and conditions of employment, as the necessary analyses can be tedious. Amid the absence of an effective date for amended regulations, compliance with the existing 2013 Amendments is key. Businesses must stay attuned to changes in reporting forms and ensure their submissions adhere to the specified deadlines for a successful report. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’ https://www.bizcommunity.com/Article/196/820/242601.html

Press Kit | 6 October 2023 South Africa’s largest private sector employer, the Shoprite Group, has been honoured for its outstanding contribution to the ‘Social’ component of ESG at the Youth Employment Service (YES)’s inaugural Environmental, social, and governance (ESG) Awards this week. The YES programme is a business-driven initiative in partnership with government and labour to build economic pathways for black youth to reduce unemployment. Since inception of the partnership in November 2018, the Group has created 9 454 youth opportunities through the YES programme. Participants receive 12 months on-the-job training with exposure to various facets of the retail industry. On completion of the programme, successful YES learners are skilled to work in retail or to initiate their own entrepreneurial journeys. “With youth unemployment at a staggering 63.9%, the Group’s talent attraction and development strategy places a strong focus on offering early careers to youth interested in pursuing a career in retail.” - Leigh Adams, Head: Group Talent & Learning Solutions The Group’s own Retail Readiness Programme is understood to be the largest and most successful skills development initiative undertaken by a South African retailer. The seven-week programme equips unemployed youth with the basic skills required to work in a retail environment or to start their own business. Successful participants receive NQF-level 3 qualifications. Over the past three years, the Group has invested more than R384.5 million into skills development and training of 18 513 unemployed youth. For a career that matters, apply for one of the Group’s youth development programmes: Send a WhatsApp to +27 87 240 5709 and select Job Opportunities Visit https://shoprite.jobs Submit your CV at the nearest Shoprite, Checkers or Usave supermarket. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.shopriteholdings.co.za/newsroom/2023/esg-awards.html

Ina Opperman | 8 October 2023 The franchise industry is important for economic growth in South Africa as it contributed 15% of the country’s GDP in 2022. Two surveys conducted in the franchise industry show it is still going strong despite the challenges of the past few years. It seems that the sector had more ups than downs as franchisors and franchisees worked together to analyse challenges, find solutions that will not only benefit themselves but their staff, dependents and the consumers they serve. The Franchise Association of South Africa’s eighth independent survey, sponsored by Absa, was conducted among franchisors after a hiatus of four years to assess the contribution of the franchise sector to the South African economy in terms of gross domestic product (GDP), business establishment, creation of employment and the identification of key franchise practices. Some of the key findings were that: Optimism about the success of their businesses continues to strengthen among franchisors (81% in 2018; 89% in 2019 and 98% in 2023) despite the upheavals from 2020 to 2022 and the expectation that turnover will grow in the next financial year is almost unanimous. The time the franchise has been operating showed that three in four franchises fell into the more experienced range of 10+ years, with the average age of the business 21 years, proving the resilience and stability of the franchise sector in South Africa to provide long-term investment opportunities. The number of franchise systems dropped from 813 in 2019 to 727 in 2023, clearly due to the disruptions of the past four years which put the break on new concepts coming online and perhaps in the closing of smaller fledgling concepts that could not get off the ground during the pandemic. The number of franchise outlets was grossed up, due to the greater franchisor sample, especially of large franchises with 200+ outlets, to represent 68 463 franchises, reflecting the increased number of large franchisors participating in the survey. As a result, the increase in the sector’s contribution to the country’s gross domestic product (GDP) rose from 13.9% to 15% of the total South African GDP of R6.66 billion in 2022, indicating that the remaining systems were resilient and strengthened their market position. The estimated turnover generated for 2023 was R999 billion, a 36% increase over the 2019 figure of R734 billion, again reflecting the increased number of large franchisors participating in the survey. (This amount does not include revenues from listed companies operating in the franchise market as these listed companies did not participate in the survey.) Fluctuation in the number of business units showed the net number of stores opened in 2023 is 2.9, which is the sum of 3.1 stores opened less 1.2 stores closed, with 1.4 stores relocated. The general feeling was that while turnover and revenue growth was sought across the board, store growth was not on the immediate radar for most franchisors during this turbulent time. Franchisor ownership demographics showed an interesting trend, with the average percentage of system ownership by previously disadvantaged individuals improving significantly in the last four years from 20% in 2019 to 48% in 2023, with black ownership showing an increase of 10%, almost double what it was previously. Ownership by Indians and coloureds tripled overall (7% to 18% and 2% to 9% respectively). A concomitant decrease was noted among white franchisors (from 80% to 42%), perhaps a reflection of the reticence in this entrepreneurial group to launch new systems amidst continued failed infrastructure. Franchisee ownership also changed significantly in the last four years in terms of the franchised outlets, with black ownership at 18%, Indian ownership at 17%, coloured ownership at 8% and white ownership at 57%. Female ownership remained steady at 30% in 2023, possibly due to the multiple roles women had to play over the past four years, especially during Covid which may have restricted their entrepreneurial ambitions. The franchise industry accounts for an estimated 4.7% of employment in the country, which translates into an estimated 471 233 employees. In 2023, based on figures provided by Stats SA regarding employment in the first quarter of 2023, 51% are black staff; 12% are coloured, 12% are Indian staff and 25% are white. Largest and smallest franchises Franchising in South Africa is made up of a range of around 12 business categories. The retail and automotive products and services categories tend to be the larger franchises at 17% and 10% respectively, while fast foods and QSR’s (at 19%) are more likely to fall into the medium category. Smaller franchises are more likely to be building, office and home services (12%), business-to-business (7%), childcare, education & training (7%), health and beauty (6%), dine-in restaurants (5%) and real estate (5%), with personal services, construction and related and others making up 2% of franchises. Fred Makgato, CEO of the Franchise Association of South Africa, says franchising does not get enough credit for its contribution to the economic stability of the country by keeping the wheels of business turning. “This sector is one of the most dynamic and visible due to its spread throughout the country through well-recognised brands in twelve different sectors but is not recognized enough by government for its entrepreneurial endeavours, offering viable business opportunities, training staff in a range of industries and creating both direct and indirect jobs.” Measured for the first time this year, 23% of franchises are now operating in townships which opens up a whole new untapped market but government needs to come to the party in terms of supporting and funding small businesses, he says. The survey also showed that franchisors are optimistic about business growth and expectations that turnover will grow in the next financial year was almost unanimous (from 81% in 2018, to 89% in 2019 to 98% in 2023). Challenges franchises face However, despite the optimistic outlook for the future, the number of franchisors that embarked on a rebranding/revamping/upgrading exercise continues to decline. The survey also identified these challenges in the franchise space: The cost involved in operating a franchise system were perceived to be the main challenge facing the interviewed franchisors (60%). Breaking down this response, it was noted that inflation was the major aspect mentioned in this regard (32%), followed by high/expensive rentals (20%) and the slow economy (13%). The next most frequently mentioned challenge was related to the franchisees within the system, finding the right franchisees with sufficient capital (15%), with sufficient experience (12%) and not operating according to standards (12%). Load shedding and employees posed the next challenges (42% each). Load shedding was considered to have an impact on profitability (26%) and productivity (20%), while aspects related to employees included training (21%), staff turnover and attracting the right staff (12% each) and having to retrench staff (5%). The fifth most frequently mentioned challenge was marketing (36%), including marketing the franchise (25%) and the products/services offered (12%). Franchises worried about SA’s economic crisis Almost all respondents, especially those in the food sector, expressed concern that the country was facing a deepening crisis that is impacting all areas of the economy due to the ongoing and escalating load shedding which has a snowball effect on everything from food security to logistics to service delivery, with very little done by the government to mitigate this. Makgato believes that the only way to avoid an impending disaster in South Africa is for government to deal with load shedding and recognize that it is the businesses that are keeping the economy going. “On the back of such a strong survey of the franchising sector, that is prepared to safeguard its position as a significant contributor to the country’s economy and is willing to play its part to keep the wheels of business and entrepreneurship turning, we call on government to now do their part in rectifying the debilitating state of the country for the sake of the economy, its citizens and the future of South Africa.” Some of the respondents’ comments on how they survive, include: “Love your customer. Make their life easy. Have happy staff. Just keep people happy.” “The key to getting through this is to do a lot of education with all franchisees, keeping them updated, compliant and delivering high standards.” “The fact that we were able to recover quite a few key stores quickly is testament to the brand and the dedication of all the staff because everyone’s ‘all hands- on-deck’ working together.” “Load shedding has been financially devastating and brands are having to deal more and more with distressed units in their business mode and having to work harder to maintain viable businesses and keep them open across their network.” ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.citizen.co.za/business/personal-finance/surveys-show-strength-of-franchise-industry/

Bongani Mdakane | 8th October 2023 The Black Business Council (BBC) has accused some non-government organisations of sabotaging black businesses, thereby subverting the government’s transformation project, and acting as gatekeepers in the business industry. The organisations singled out for resisting transformation include the Organisation Undoing Tax Abuse (Outa), Coronation Fund Managers, Corruption Watch, Institute of Race Relations (IRR), and Budget Justice Coalition. They are also described as entities subverting black progress. BBC president Elias Monage this week said it was concerning that the NGOs associated with big businesses were allegedly interfering with processes of the Public Procurement Bill, seeking to subvert its objectives and intentions. These claims come after the BBC submitted and commented on the Public Procurement Bill currently tabled before parliament, whose purpose is to create a single piece of national legislation to regulate public procurement, including preferential procurement policy. In May, the Public Procurement Bill was introduced in parliament. However, there has been disputes between businesses and NGOs on how it should be implemented to benefit everyone in the country, with “white NGOs accused of using overt tactics to subvert transformation”. Monage in an interview with Sunday World said his organisation was concerned about the negative attitude displayed by the NGOs, arguing they are hell-bent on interfering with the processes as a trick to subvert transformation. “We have a challenge in this country where NGOs are being funded by big white-owned businesses to oppose transformation. As BBC we stand firm that we cannot allow the situation where there are people hell-bent to opposing transformation in the business space. “In this country we are sitting on a ticking time bomb, as the rich are ring-fencing their wealth, shutting out the poor from the wealth of this country. “The same wealthy people are enjoying protection they get from NGOs such Outa, Coronation Fund Managers, Corruption Watch, Institute of Race Relations and Budget Justice Coalition. Black businesses are suffering because of racism being dished out by white-owned companies. NGOs are being funded by white businesses to oppose anything that has to do with transformation,” said Monage. “These NGOs are accustomed to seeing black people live in squalor while they prosper on the other side. The big question is, why are these NGOs meddling with government procurement processes? .“I have a sense that they are being used to oppose anything that has to do with transformation. The constitution is clear about the need to address the imbalances of the past, and to achieve this objective, we need legislation to facilitate a process of procurement. Without such legislation, black businesses will be excluded from participating in the economy. “The white-owned companies use their financial muscle to fund these NGOs, and thereafter encourage them to oppose anything that has to do with transformation,” said Monage. “We cannot keep quiet while we are suppressed and bullied by these NGOs funded by white monopoly capital.” However, spokesperson of IRR Hermann Pretorius hit back, describing the BBC as “a lobby group for wealthy tenderpreneurs who use their race and their government connections to enrich themselves”. “Transformation is the tool they use to gain access to lucrative government contracts, allowing them to siphon off taxpayer money at the expense of the poor. “The IRR is against this kind of transformation. It is crony capitalists trying everything in their power to rig the system in their favour. “The transformation rhetoric is how they try to protect their privileges. This is why they like to accuse those who oppose them of being ‘anti-transformation’. “The BBC’s comments betray the nervousness of those who fear a genuine competition for government contracts, where value for money rather than political connections or the colour of a person’s skin wins the day. At the time of going to print other organisations, Outa, Budget Justice Coalition, Coronation Fund Managers and Corruption Watch, had not responded to our queries. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/business/ngos-sabotaging-transformation-agenda-says-bbc/