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Simangele Khoza | 11 September 2023 Sefa’s core mission - Empowering SMMEs and cooperatives. In a remarkable event held at a local hotel on Thursday, August 31, the Small Enterprise Finance Agency (Sefa) reaffirmed its commitment to supporting women-owned businesses. This initiative was in honour of Women’s Month and aimed to bolster the entrepreneurial spirit among women in eMalahleni. Sefa, operating under the umbrella of the Department of Small Business Development (DSBD), has a primary mission to foster the establishment, development, and growth of Small, Medium, and Micro Enterprises (SMMEs) and cooperatives. Beyond this mission, Sefa’s activities also contribute significantly to poverty alleviation, job creation, and overall economic growth. The heart of the event lay in face-to-face engagement with women entrepreneurs. It was a unique platform that welcomed both seasoned entrepreneurs and budding start-ups. Here, women had the opportunity to learn about the diverse array of products and programmes that Sefa offers to support women-owned businesses. Sefa’s unwavering dedication to empowering women in business is not just a Women’s Month endeavour, it’s an ongoing commitment. By providing women with the necessary resources, knowledge, and opportunities, Sefa plays a crucial role in fostering a more inclusive and economically robust society. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.citizen.co.za/witbank-news/news-headlines/2023/09/11/sefa-empowers-women-entrepreneurs-during-womens-month-celebration/

Terence Creamer | 11 September 2023 A new Centre for Development and Enterprise (CDE) report argues that the South African government’s policy of localisation is locking the country “into the wrong path” of rising protection and rising inefficiency. Published following an expert roundtable, the report outlines what it calls the “seven sins of localisation”, including: A policymaking process that is neither transparent nor evidence-based; The imposition of conditionalities that pose a threat to investment; A strategy of import substitution that is biased against exports; A reduction of competition, owing to a restriction on imports; Constraining innovation by excluding foreign knowhow; Threatening trade relations by forced localisation that may violate international obligations; and locking the country into an industrialisation path that relies on protection and facilitates rent-seeking behaviour. The report comes as the Department of Trade, Industry and Competition (dtic) continues to prioritise localisation as a central pillar in South Africa’s industrial policy and amid growing concern over what some are describing as the country’s premature de-industrialisation. Government has responded with a series of initiatives, including a 2021 approach to the social partners represented in the National Economic Development and Labour Council with a call for a 20% reduction in nonfuel imports over a five-year period. In addition, the dtic has for some time been working across various sectors, from steel and automotive to renewable energy and clothing, to develop masterplans to identify opportunities for local industrial development. It also comes as several other countries, including highly developed countries, are ramping up their own industrial policies to revive domestic manufacturing. Nevertheless, CDE executive director Ann Bernstein argues that, instead of compelling the local manufacture of products, government should be working to shape a business environment that attracts and rewards investment shaped by strong competitive pressures and which is more often export-oriented. She, thus, calls on government to rethink its adherence to the localisation policy, which the CDE report describes as “expensive”. “We need a different approach to building an expanding local economy with many more growing, innovative and export-oriented firms creating employment opportunities for the whole South African labour force. “That is the kind of ‘localisation’ we need,” Bernstein concludes. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/new-report-says-localisation-policy-locking-south-africa-into-wrong-path-2023-09-11

Sibahle Malinga | 8 September 2023 MTN South Africa has introduced the MTN Xlerator programme, to scale and improve procurement processes and the development of the mobile network’s local small and medium enterprise (SME) suppliers. According to the telco, the enterprise and supplier development (ESD) initiative, which was launched today in Johannesburg, aims to accelerate local supply chains and drive economic growth within MTN’s supplier ecosystem. It will also provide training and skills development based on the needs of the individual participating entrepreneurs. Through the Xlerator programme, MTN has set a target to spend R50 million in procurement, at 50 black-owned suppliers (up from 13 in 2021), with more investments planned for the future. The telco says it plans to have 140 active qualifying small enterprises within MTN SA’s supply chain, from 70 now, and 120 active exempted micro enterprises (EMEs) from 66 currently. EMEs are businesses that are exempt from measurement in terms of the Department of Trade and Industry’s codes of good practice for black economic empowerment. The introduction of Xlerator marks a significant step forward in MTN’s journey to support black-owned enterprises, as part of the environmental, social and governance pillar of its Ambition 2025 strategy, says the company. “At MTN, we’re significantly ramping up procurement and development spending into key areas, where outcomes can be accelerated and maximised,” says MTN SA CEO Charles Molapisi. “Supply chain resilience will be enhanced by increasing supplier diversity and strength, collaboration, and the ability to adapt to the ever-changing operating environment and challenging economic conditions. We’re improving value chain efficiency by fostering responsiveness, flexibility, innovation and cost-effectiveness.” MTN’s total measured procurement spend increased from approximately R26 billion in 2018, to more than R44 billion in five years; R17 billion of that spend went to entities that are at least 30% black women-owned in the 2022 financial year, says the company. MTN SA says it also seeks to lower the barriers to entry to the telecommunication and technology sectors, which have been notoriously difficultfor SMEs to break into, due to the often-high cost of capital investment required. “As an example, this programme is already helping us facilitate more black-owned network operators in SA, which is an important milestone for the industry. Beyond procurement opportunities, we are also reshaping the ownership landscape of our Y’ello stores, with the goal of better mirroring the demographic tapestry of South Africa,” Molapisi explains. MTN’s Xlerator will also offer support to participants in a number of ways, to aid their growth and ability to meet the programme requirements. The short-term processes focus on assisting with working capital funding and will include early payments and working capital loans for small businesses. Longer-term processes will include low-interest loans, asset finance and guarantees, it says. “Through MTN Xlerator, we are transitioning our supply chain strategy from transactional to values-driven, with ESD at its epicentre. The programme aims to be a beacon of economic transformation, where budding entrepreneurs and suppliers are nurtured, while fostering competitive markets that catalyse job creation and establish self-reliant communities,” adds Molapisi. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.itweb.co.za/content/KBpdg7pm9wLMLEew

Bongani Mdakane | 10 September 2023 Multinational construction group SMEC this week went to the Johannesburg High Court to interdict the South African National Road Agency (Sanral). The interdict is aimed at stopping Sanral from proceeding with and or implementing the outcome of the tender adjudication process. This relates to the tender invitations contained in SMEC’s papers, pending a review application launched in Gqeberha High Court. Sanral’s decision to implement a new scoring system in awarding tenders is challenged. The construction company has taken umbrage with the new scoring system introduced by Sanral in awarding new and existing tenders, saying it disadvantaged some companies. Sanral, which is responsible for the road infrastructure in the country, has introduced a new Preferential Procurement Policy, which includes a new scoring system. The new scoring system was revealed in May, when the new policy was uploaded to the Sanral website. SMEC said the new scoring system was introduced through an addendum to all tender invitations then pending and all the new tender invitations. Before introducing this system, a company’s B-BBEE level could account for 0 – 10 or 0 – 20 of the points, depending on its B-BBEE level. With the new system, a B-BBEE level, regardless of the level, now only accounts for a maximum of one or two points, depending on the contract size. Added to that is the possibility of another five points (if the maximum is 10) based on being wholly black-owned and four points (if the maximum is 10) if targeted enterprises are subcontracted. SMEC, bidding for work in the Eastern Cape, said in its court documents, the new system renders the Broad-Based Black Economic Empowerment Act a nullity. The company also says all the money companies spent to obtain a high B-BBEE score would now mean nothing if the new scoring system is allowed to stand. In its response, Sanral denied SMEC was precluded. The state-owned entity said that no pre-qualification criterion prevents a bidder from submitting the relevant bid. Sanral said if SMEC wants to improve its score in the black ownership category, it can make use of subcontractors from targeted enterprises to better the score. The rest of the 90 out of the 100 points relate to pricing, and this might well mean the SMEC wins the tender. Sanral also said the harm complaint was speculative as they cannot predict the outcome of the tender process. In fact, Sanral said SMEC stands an equal chance to the other bidders in being successful. However the court ruled in favour of SMEC. “The applicant (SMEC) has a reasonable prospect of success and should be allowed to take the decision on review and have an effective remedy available. “The right to partake in a constitutionally compliant procurement process is a clear right. The right to have a review application heard in which the court would be able to grant just and equitable relief is also a clear right. The applicant has thus established that it has prima facie right,” the judgment reads. “It follows that any exclusion from participation in a process must be based on a sound and lawful foundation, absent of which, the applicant will have prima facie right and an apprehension of imminent irreparable harm. The immediate irreparable harm lies in the possibility that its constitutional rights are infringed by being subjected to an unconstitutional scoring system.” ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/business/multinational-firm-interdicts-sanral-from-implementing-scoring-system/

SA News | 10 September 2023 Deputy President Paul Mashatile has attributed the growth in gross domestic product (GDP) to the economic recovery measures that were implemented by government to support the economy. Stats SA reported that the country's GDP grew by 0.6% in the second quarter of 2023 while it grew by of 0.4% in the first quarter. These measures include financial support for distressed businesses, infrastructure investment, and job creation initiatives such as the Presidential Youth Employment Initiative (PYEI), implemented as the Basic Education Employment Initiative (BEEI) across all nine provinces. “Between April and June this year, at least 135 000 earning opportunities were secured by young people through the Presidential Youth Employment Initiative’s National Pathway Management Network. “Some 108 061 of these were accessed through the SA Youth platform, with 27 088 opportunities scored through the Department of Employment and Labour’s Employment Services of South Africa (ESSA) website. We are adamant that if PYEI can receive more funding, it will reach more young people,” Mashatile said on Saturday in Johannesburg. Addressing the Forty Under 40 South Africa Awards Ceremony, he called on young people to take up the opportunities available in digital sectors and others to combat the high youth unemployment rate. “Our government believes that entrepreneurship is part of the remedy for the massive youth unemployment. In partnership with the private sector, we have launched several youth business funding opportunities to help youth start and maintain their businesses. This includes the Youth Challenge Fund (YCF), the Youth Pipeline Development Programme, and the Youth Technology Innovation Fund (YTIF). “While these measures have helped stabilise the economy, we must remain vigilant and adaptable to emerging challenges. Moreover, we have also gained some pace by implementing the structural reforms for the reconstruction and recovery plan, Operation Vulindlela,” Mashatile said. Since Operation Vulindlela was launched in October 2020 as part of the Economic Reconstruction and Recovery Plan, government has implemented 35 priority structural reforms identified for their impact on economic growth and job creation. “We have made progress in energy, our logistics network, digital communications, and the reform of the visa regime to enable businesses to attract the skills they need to grow. Eleven reforms have been completed, while 14 are on track or progressing well. “Regarding the energy challenge that has remained a top priority in our country, we have amended Schedule 2 of the Electricity Regulation Act to remove the licencing requirement for generation projects of any size,” the Deputy President said. More than 100 projects are at various stages of development, representing over 10 000 megawatts of new generation capacity and over R200 billion in private sector investment. “Additionally, three projects from the risk mitigation programme have been constructed, with five projects expected to reach financial closure this quarter. “We approved the Electricity Regulation Amendment Bill in March, which has been tabled in Parliament. This Bill will establish a competitive electricity market, enabling multiple generators to compete on a level playing field. These are essential to ramping up energy generation in the short and medium term,” the Deputy President said. He said government’s efforts in investing in young people means redirecting efforts and resources in a number of critical areas, including the skills revolution and education, providing quality health care, investments in new technologies as part of 4IR and artificial intelligence as well as investments in infrastructure for ease of business and movement of goods allows entrepreneurs to flourish. “Investing in youth participation is not just a trendy concept but a necessity for our collective future. It goes beyond just financial resources. It requires a mind-set shift and a collective commitment to nurturing talent and empowering individuals,” Mashatile said. Taking advantage of opportunities on the continent The Deputy President urged entrepreneurs to take advantage of the African Continental Free Trade Area (AfCFTA). “In this regard, South Africa is a significant member of this trade revolution that will shape the continent's future by stimulating innovation and value-chain growth and boosting industrialisation and job creation across industries. The AfCFTA has 54 signatories, making it the largest free trade area in terms of the number of member states, second only to the World Trade Organisation. “As part of Agenda 2063, we must dismantle the barriers that hinder youth participation in the economy. We need to break free from the cycle of generational exclusion and embrace an intergenerational approach where the knowledge and experience of our elders are combined with the fresh ideas and perspectives of today's youth,” he said. Mashatile said unlocking the demographic dividend will spark a wave of growth and progress that will benefit the youth and the entire continent. “We need greater collaboration among governments, civil society, the private sector, and international partners to achieve this,” he said. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.sanews.gov.za/south-africa/economic-recovery-measures-improve-economy#:~:text=These%20measures%20include%20financial%20support,BEEI)%20across%20all%20nine%20provinces.

Cameron Mackay | 7 September 2023 Management consulting company EY Africa private capital leader and partner Graham Stokoe on September 7 discussed key findings of the Southern African Venture Capital and Private Equity Association’s yearly Private Equity (PE) Industry Survey, and emphasised the improved performance of Southern African PE firms in 2022, when compared with global trends. “We had 49 PE firms participate in this survey. EY has been doing the survey for the past three years, and it’s pleasing that the number of participants has increased from 40 last year. This is a great representation of the industry and what’s happening. This has contributed to great data for us, and it has grown the credibility of the results,” he stated at the 2023 PE Equity Survey launch, held in Johannesburg. Information in the survey covers events up to December 31 last year. The survey covers analysis of the industry’s strategic priorities. This includes environmental, social and governance (ESG) and impact investing, talent, broad-based black economic empowerment, fundraising, investment and divestment activity, value creation and funds under management. The survey includes comparisons to global PE trends and the level of detail that respondents have provided varies across topics and questions in the survey. “It’s the first time in our three years of doing the survey that we got industry participants to share enough information on their portfolio companies. This includes information on revenues, employees and earnings before interest, taxes, depreciation and amortisation information. This helps to see if this industry is driving value creation and therefore economic growth.” While a global recession and geopolitical concerns are seen as the biggest industry concerns by both Southern African and global PE firms, Stokoe pointed out that the timing of the survey could have a slight impact on the findings. The views of PE firms in Southern Africa were gathered in March and April 2022 and those of global PE firms in November and December 2022. “Some of those macroeconomic shifts on interest rates and inflation have only come out in the last few months, not when the survey was done in March and April last year. “In some of the broader areas like cybersecurity and other global concerns such as geopolitics, one has to keep in mind that with the global survey, global PE firms are much larger than the average Southern African PE firm size. This will lead to some differences in the findings.” ESG, IMPACT INVESTING & TRANSFORMATION In addition to geopolitical concerns, the survey found that 57% of PE firms have specific impact investing mandates, an increase from 45% in 2021. Of the respondents whose funds do not have impact investing mandates, 79% are likely to consider such mandates within the next five years, a decrease from 86% in 2021. The study also indicates that strategic priorities for Southern African PE firms, aside from asset growth, are ESG initiatives and talent management. “This is a theme that has grown massively global. It’s been a theme in a number of Southern African PEs for many years, but the importance of this theme is growing globally, to attract capital and you know, showing meaningful impact. Investors want financial returns, but also want the fuller impact of their investments as well,” Stokoe said. He also pointed out that survey results indicate that the PE sector is making positive shifts in terms of transformation. Fifty-nine per cent of PE firms have over 50% black ownership without applying modified flow through. Further, 28% of PE firms have over 30% black female leadership and 60% of PE firms have over 50% black management. Stokoe also noted that Southern African PE firms have continued to focus on hiring more people with racially and ethnically diverse backgrounds in both the front and back offices. He added that, in terms of PE firms with over 30% representation of under-represented people with racially and ethnically diverse backgrounds, Southern African firms with over 30% representation increased from about 60% to 70% in 2021 to 80% last year. Global firms with over 30% representation, however, grew from about 10% to 20%. “We’re far more diverse in Southern Africa compared to global PE firms. It’s a trend that’s added a lot of momentum to the growth of transformation, as Southern Africa has also improved in this metric. Black management meanwhile has decreased slightly, so there’s more transformation in terms of ownership, but there are ups and downs in various areas.” He also pointed out that survey results indicated that the number of firms with over 30% women participation on boards has increased from 28% in 2021 to 42% last year. This follows a decrease from 2020 to 2021. FUNDRAISING & EXITS Survey results also indicated that PE fundraising in Southern Africa witnessed an increase of 21% in 2022, compared with 2021. This took fundraising activities to closer to pre-pandemic levels in 2019, which was contrary to global PE fundraising trends, which decreased by 13%. “In rands and dollar terms, it doesn’t look as good, but Southern Africa is dominated by smaller PE firms so this plays a role”. He also pointed out that 51% of funds raised were from investors outside of Southern Africa, with European and UK investors making up 77% of investments from outside Southern Africa. “For the first time, last year we had more capital coming in from non-Southern African investors than from Southern African investors. Despite all of Southern Africa’s challenges, investors from outside of the region are putting their money into Southern African PE firms.” Study results also showed that contrary to global trends – where PE exits were muted in 2022 – Southern African PE firms witnessed a strong increase in both the value of exit proceeds (breaching the R20-billion level for the first time since 2011), and the number of exits (highest in the last four years). ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/survey-shows-improved-southern-african-private-equity-performance-2023-09-07

Nqobile Masimula | 6 September 2023 Durban — The BIO Africa Convention ended on a high note, on Wednesday, at the Durban International Convention Centre with an announcement of the winners of the Start-Up Stadium. This feature of the convention sees start-up businesses and SMMEs being able to participate in the Start-up Stadium, a dedicated space specifically designed to showcase the potential of emerging biotech start-ups. On Monday, the Minister of Higher Education and Science and Innovation, Blade Nzimande officially opened the 2023 BIO Africa Convention. Nzimande said the BIO Africa Convention is an important platform for enhancing biotechnology applications on the African continent. The biotechnology innovations that were featured pertains to the health, energy, agriculture and entrepreneurial sectors. The pitch-up session was held on Tuesday. The winner for the pre-revenue start-up is Dr Habtamu Abafoge who is the CEO of Simbona Africa Healthcare. Simbona won $10 000 (R192 166), and is a health-care company that designs and manufactures medical devices. Currently, Simbona is working on three different products: a baby warmer, a phototherapy machine, and an ultraviolet disinfection machine. The winner on the category of post-revenue start-up is Dr Genevieve Thompson who is the founder of Gene Vantage. She won $50 000. Gene Vantage is a specialist in the field of nucleic acid extractions, and is the only manufacturer of such products in Africa. The convention attracted industry experts, researchers and Small and medium-sized enterprises (SMMEs) in the biotechnology sector. The event, was held under the theme “Re-imagining Biotechnology Innovation for Africa‘s Development and Security”. Dr Janet Byaruhanga of Nepad, said the journey for the start -ups has just begun. “As we embark on this journey, we have witnessed the power of collaborations. It is your agility and innovations that will not only shape the industries but will shine the light of Africa,” she said. Biotech stakeholders from across the world shared ideas in parallel sessions, plenaries and an exhibition featuring about 100 exhibitors was there. The Department of Science and Innovation has been championing biotechnology, and the bio-economy in South Africa since 2001. Dr Nhlanhla Msomi who is the chairman of AfricaBio said the convention offered a unique opportunity to gain exposure, network with industry veterans and potential investors, and receive valuable feedback from experts in the field. “Thirty two countries were represented and 800 delegates showed up. To all the start-ups, you are the engines of our future growth. Next year we are convening on 23 August,” said Dr Msomi. He said the event also aims to foster collaboration and partnerships that can drive innovation and contribute to Africa’s sustainable development. WhatsApp your views on this story to 071 485 7995. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/dailynews/news/winners-announced-for-the-start-up-stadium-at-the-bio-africa-convention-67b1d71f-342f-4c0c-9a91-ef88f532e16b

Sibahle Malinga | 4 September 2023 South Africa’s transition from internal combustion engine (ICE) vehicles to new energy vehicles (NEVs) will displace many automotive sector workers, with around 67% of local component exports expected to be lost in the process. This was the word from deputy finance minister Dr David Masondo last week, delivering a speech, titled: “Growing the SA automotive component manufacturing sector: A state perspective”, at the National Association of Automotive Component and Allied Manufacturers (NAACAM) 2023 show, in Tshwane. Discussing the economic significance of the automotive sector, particularly local component manufacturing, he highlighted government’s role in providing more support to the industry, particularly components manufacturing in the context of NEVs. The component sector, as part of the wider automotive sector, is a mainstay of SA’s industrial economy – so far contributing 4.9% to SA’s gross domestic product this year, he noted. According to Masondo, last year, total automotive vehicle and component exports from SA were over R227 billion, and this number is expected to be significantly affected by the country’s transition to NEVs. “As we look towards the future, embracing electric vehicles is not just a choice. It is imperative for the sustainability of our planet and the prosperity of our nation,” he explained. “Like every transition, the emergence of new energy vehicles brings with it massive potential disruptions. With that disruption, [there will be] a host of risks and even more opportunities to channel the disruption into new industries, skills and jobs. “The technical change in the labour process driven by artificial intelligence requires fewer blue-collar workers. Around 67% of SA component exports will be lost in the transition from ICE vehicles to NEVs. This simply means the transition will entail a fundamental restructuring of the labour market.” A NEV utilises alternative energy sources instead of relying solely on traditional fossil fuels. Last year, SA exported 360 000 vehicle units – 33.7% manufactured in Gauteng, 53.5% in the Eastern Cape and 12.8% in KwaZulu-Natal. According to Masondo, the growth of SA’s automotive component manufacturing sector takes place in the context of systemic transformations driven by decarbonisation and artificial intelligence. The automotive sector will be, and is, deeply affected by these systemic changes. “New employment opportunities will have to be created for those who will inevitably lose out. Reinvestment and support [will be needed for] reskilling and upskilling of the workforce to ensure the right skills are available for the design, engineering and manufacturing of electric vehicles and related components and systems.” He emphasised the importance of fiscal assistance, supporting local original equipment manufacturers (OEMs) and adequate policies to drive the development of SA’s NEV industry and create a conducive environment for the transition to electrification. While many jobs will be displaced, the emergence of NEVs will also result in new jobs created, added Masondo. According to a report by the National Association of Automobile Manufacturers of South Africa, NEV sales by 14 industry brands in the country increased by 18.8%, from 1 401 units in the first quarter of 2022, to 1 665 units in the first quarter of 2023. While SA is ahead of its African counterparts, it lags significantly behind on the global front. The two-day NAACAM Show 2023 was hosted in partnership with the Tshwane Economic Development Agency. It was attended by over 1 300 guests and attracted 130 exhibitors, across established manufacturers and service providers in the automotive components sector, and emerging SMMEs, according to organisers. A R4.8 billion investment pledge was announced by NAACAM CEO Renai Moothilal on the final day of the event. The pledges were made by 16 of the show exhibitors, consisting of companies specialising in SA’s e-mobility industry, including Atlantis Foundries, Shatterprufe, Ebor Automotive Systems, Auto Industrial Group, Formex Industries Acoustex and CRH Africa Automotive. “These pledges reflect the importance of SA’s e-mobility sector to the local economy and they were all productive investment-related. This includes plant upgrades and new technology to support OEM customer requirements,” said Moothilal. Trade, industry and competition minister Ebrahim Patel also spoke at the event and welcomed the pledges made. The investments will support more than 10 000 jobs, he noted. “I am particularly pleased to be part of this major announcement today, because investment is the lifeblood of every economy. It contributes to expanding the economy, creating jobs and providing taxes that government can use to build hospitals, schools, universities and many other positive things that contribute to improving the lives of our people. This is a strong vote of confidence in the South African economy by the automotive components makers.” Patel added that government needed to respond to the private sector’s appetite to invest in the South African economy by creating a conducive environment, where companies are confident in putting money into building more factories. “I was also pleased to learn that two of the companies that made pledges are black industrialist-owned firms that have been brought in as a result of the Automotive Industry Master Plan and the Automotive Industry Transformation Fund (AITF).” The AITF was established as a collective equity equivalent investment programme as defined in the broad-based black economic empowerment codes between seven multinational automotive manufacturers in South Africa. It aims to facilitate transformation across the sector’s value chain through the provision of access to developmental funding, the market and capacity development for qualifying black-owned entities. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.itweb.co.za/content/kLgB1Mez9Pxq59N4

SA News | 6 September 2023 Fifty-nine youth-owned businesses are set to benefit from the R90 million KwaZulu-Natal Youth Empowerment Fund. Announcing the youth businesses approved for funding during a ceremony held in Durban on Tuesday, KwaZulu-Natal Premier Nomusa Dube-Ncube said the event marks an important milestone in government’s quest to push back the frontiers of the stubbornly high rate of youth unemployment in the province. She said moment marks the fulfilment of a pledge made during the State of the Province Address earlier this year, which was delivered under the theme, ‘Taking Decisive Action in the time of Renewal and Hope as we Rebuild a Better, Prosperous, and Resilient KwaZulu-Natal’. The Youth Fund was established by the Office of the Premier in 2018 as part of government’s concerted efforts to crank up youth development and empowerment in the province. According to the fund structure, 90% of the fund received by each beneficiary is channelled to buy equipment in order to lower their cost of business, while 10% is for working capital. Dube-Ncube said during the first phase, R60 million was disbursed to 51 youth-owned businesses. In the current phase, which was opened in July 2021, a total of 4 016 applications were received for funding. “Of those applications, 2 854 were disqualified for various compliance and other reasons while 1 162 were processed by the KwaZulu-Natal Growth Fund, an entity of government that is responsible for the disbursement process and management of the Youth Fund. “A further rigorous evaluation process was undertaken, and 352 applications were shortlisted for the due diligence stage. Ultimately, site visits were conducted, which resulted in the 59 [businesses] that are today the recipients of the funding. The funding ranges from R200 000 to R2 million,” Dube-Ncube explained. The Premier said youth-owned businesses that benefited from the current window operate in various strategic sectors, including water security, transport and logistics, farming technology, the digital economy, automotive and maritime industries. “We could not have asked for a better present to mark the close of Women’s Month, as evidenced by the fact that 42% of the approved applicants are women. This is a significant improvement, if we consider that only 15% women applicants had benefitted previously. “Our goal, moving forward, is to ensure at least a 50-50 access between men-owned and women-owned businesses,” the Premier said. The Premier said they are encouraged by the fact that there is adequate geographic spread in terms of the distribution of beneficiaries as they come from across all the districts in the province. She said the provincial government is decisively addressing the divide between urban and rural, the poor and affluent. They believe that all people must benefit equally from government’s interventions. The Premier noted that the fund also approved businesses that are owned and managed by unemployed graduates and youths from professional sectors, including medical, engineering and accounting disciplines. The Premier also announced that the new window (for R100 million funding) will be opened soon. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.sanews.gov.za/south-africa/kzn-youth-owned-businesses-benefit-r90m-fund

Nelly Mohale and Emma Montocchio | 5 September 2023 YES has been a success and has proven that innovative legislation and coordination between the public and private sectors can create jobs. We just need to ensure that we create jobs the economy needs. The YES B-BBEE incentive introduced by the Department of Trade, Industry and Industry is arguably one of the most successful incentives introduced in the past 15 to 20 years. As the incentive gains traction, it is worth interrogating two elements: absorption and alignment with the national minimum wage. For those not familiar with the incentive, it was gazetted in 2018 and effectively allows organisations to move up one or two levels on their B-BBEE scorecard through the creation of a certain number of youth jobs. Due to a high degree of flexibility in implementation, undemanding job creation targets and low absorption requirements, the incentive has seen nearly 2,000 businesses sign up. Many have returned for multiple years of participation. The average YES implementation – including for multinationals – would require the creation of fewer than 15 jobs earning the national minimum wage, and only one of these youths would need to achieve permanent employment at the end of the 12 months. In essence, it is an R825,000 investment for a full level on your B-BBEE scorecard. Quality vs quantity of jobs When YES was launched in the market, it was positioned as a tool to ultimately unlock large-scale employment. In reality, it is constrained by private sector funding and B-BBEE legislation driving its targets – this has meant that the incentive typically creates between 25,000 and 30,000 jobs per year. While large-scale employment is critical for South Africa, a focus on quality jobs is equally important. Strategic sectors such as technology, tourism, healthcare, renewable energy, water and infrastructure are all crying out for capacity. One of the great aspects of YES is that you don’t need to employ the youth inside your organisation to “make up the numbers”, but can be strategic about where you deploy them. A look at the clients we are engaging with suggests that many are starting to be quite innovative around integrating youth into their value chains, enterprise and supplier development initiatives or other strategic industries. We believe organisations are viewing YES as less transactional and more strategic – a trend we hope continues. The national minimum wage debate For anybody who has had to do interviews and recruitment for YES programmes, it is heartbreaking to see young people with degrees – including B.Comms, LLBs, Engineering and Medical – applying for work opportunities to earn R4,407 per month. While the YES 12-month work experience is critical to providing access to the market and helping youth break the so-called “experience trap”, we are not going to unlock quality talent by paying the national minimum wage. First, from a mental health perspective, recent research has shown that 73% of working South Africans are earning less than R6,000 per month. When that statistic is viewed alongside research out of Unicef showing 65-73% of South Africans are struggling with mental health issues that cost the South African economy R100bn per year, we started to appreciate the steep change that is required to empower youth. Second, from a logistics level, a major challenge we face in South Africa is social mobility. A middle-class university graduate with access to a car, a laptop and data will find it far easier to access work opportunities than a youth who must navigate multiple taxis to get to and from work and is constantly weighing up data and transport costs while trying to gain work experience. Third, young people will, as a result of the experience gained through YES programmes, be able to move to better-paying positions – often before their 12-month contract expires. As a cost consideration, a youth who drops off before the eight-month mark needs to be replaced by another with a new 12-month fixed-term contract. This leaves you with a replacement cost of R50,000 if the youth is struggling to get to and from work. The Employment Tax Incentive A topic that has been bubbling under for those implementing YES programmes is the issue around the Employment Tax Incentive (ETI). The ETI is a South African Revenue Service (Sars) incentive aimed at encouraging youth employment by offering a payroll recovery for those under the age of 29 and under R6,500 per month. It works on a sliding scale and, in practical terms, means that a youth employed on a YES programme at the national minimum wage effectively only pays R3,407, having received a rebate of R1,000 per month. Unfortunately, the ETI has become subject to significant industry abuse and Sars has aggressively clamped down on claims in this space. Based on our industry feedback, there are hundreds of millions of rands of ETI claims being withheld by Sars. Due to its flexibility, YES allows organisations to fund youth who don’t sit on their payroll, and this has created a grey area for Sars and ETI claims. Sars, in essence, is arguing that despite funding youth jobs, the youth are not on your payroll so would not be eligible for ETI. At the same time, they are arguing that the employers of record for the youth are not the creators of jobs as they receive specific funding for these positions and similarly are not entitled to ETI. The other concern is that the national minimum wage is rising faster than the ETI brackets. This issue is creating a lot of frustration in the industry and for every R100m of withheld ETI, this holds back the creation of at least 1,800 jobs per year. Ultimately, this issue needs to be addressed to unlock further jobs. YES has been a success and has proven that innovative legislation and coordination between the public and private sectors can create jobs. We just need to ensure that we create jobs the economy needs. And while we are at it, review the real cost of adhering to paying only the national minimum wage in a short-sighted attempt to keep overheads low. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.dailymaverick.co.za/opinionista/2023-09-05-just-say-yes-job-creation-incentive-should-be-aligned-with-the-national-minimum-wage/

Lindsay Dentlinger | 05 September Under the new bill, supply chain management will become the function of a new public procurement office housed within the Treasury. CAPE TOWN - Nine years since Cabinet first approved an overhaul of government’s procurement system, a new bill that will centralise tender processes across all spheres of government is finally under discussion in Parliament. But concerns were raised on Tuesday by opposition parties whether the new Public Procurement Bill will advance transformation and the capacity of the state. Under the new bill, supply chain management will become the function of a new public procurement office housed within the Treasury. The Treasury says a single procurement system for the state will level the playing field and will also address many of the ethical concerns raised by the Zondo Commission of Inquiry into State Capture. Under the new Public Procurement Bill, several existing preferential procurement laws will fall away in favour of new regulations to be decided by the finance minister. But Economic Freedom Fighters (EFF) MP Mzwanele Manyi believes the bill’s intentions are misguided. "What we should be discussing is how the state aims to build capacity within itself to provide the services it’s preparing to outsource to other people right now." The Democratic Alliance (DA)'s Dion George is concerned about corruption within the central procurement office. "This body is going to be very powerful and very big and very susceptible. How does that get held to account?" Treasury says it believes these aspects have been fairly addressed in the bill, which will now be subjected to public scrutiny. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://ewn.co.za/2023/09/05/opposition-parties-raise-concerns-over-public-procurement-bill

Industrial Development Corporation of South Africa | 5 September 2023 New NBI Fund is aimed at addressing the funding challenges many small businesses face. The Industrial Development Corporation of South Africa (IDC) is excited to introduce its ground-breaking initiative that embodies the spirit of growth and innovation – the IDC credit facility to non-bank intermediaries. This initiative marks a significant step forward in our mission to empower and elevate small, medium, and micro-sized enterprises (SMMEs) and those who provide them with financial support. Non-bank intermediaries (NBIs) are financial institutions that do not have a full banking licence and cannot accept deposits from the public. NBIs facilitate alternative financial services, such as investment (both collective and individual), risk pooling, financial consulting, brokering, money transmission, and check cashing and are a source of credit along with licensed banks and development finance institutions. SMMEs are usually diverse businesses operating in the service, trade, agri-business, and manufacturing sectors. SMMEs play an essential role in contributing to South Africa’s economic development. In 2021, SMMEs accounted for 24% of income and 58% of employment in the manufacturing industry, according to data from Statistics SA. However, SMMEs face various challenges, such as: Access to finance; Affordable and suitable finance; Collateral; Access to markets; Skills, experience, and track record; Climate/environmental models for risk management; Access to value chains and market-related prices for production inputs; and Access to non-financial support. The IDC aims to extend credit lines to NBIs to expand the funding reach to black-owned SMMEs, in part to address the funding challenges they face, thereby contributing to job creation and supporting economic development in South Africa. The IDC is making a R3 billion credit facility available to eligible NBIs. To qualify for this fund, non-bank intermediaries are eligible if they are 100% Black-owned with a three-plus-year track record or those with an eight-plus-year track record and a minimum 25% Broad-Based Black Economic Empowerment certification. Let us usher in a new era of financial empowerment through the IDC’s NBI Fund. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.moneyweb.co.za/in-depth/idc/idc-unveils-new-fund-to-empower-and-elevate-smmes/