Search Results
1314 items found for ""
- NAVIGATING THE ROAD AHEAD FOR B-BBEE TRANSFORMATION IN SA
Yuneal Padayachy | 28 January 2024 As South Africa moves into 2024, the landscape of Broad-based BEE (B-BBEE) is poised for significant shifts. The B-BBEE framework has been a cornerstone of economic transformation in our country, aiming to address historical imbalances and promote inclusive economic growth. In 2024, I am hoping to see the following taking place in the B-BBEE transformation space: Updated B-BBEE Sector Codes of Good Practice The B-BBEE Codes of Good Practice, including for specific sectors, are subject to periodic reviews, and 2024 may see updates to the code, especially aligning to the 2019 Amendments to the General B-BBEE Codes of Good Practice. Businesses should anticipate changes in scorecard elements, weightings, principles and compliance criteria. Staying abreast of the modifications will be crucial for companies striving to maintain or improve their B-BBEE status. Enhanced focus on implementation and monitoring One of the primary expectations I hope to see is an increased emphasis on the effective implementation and monitoring of B-BBEE initiatives. The notion of impactful B-BBEE initiatives needs to be instilled within the mindsets of B-BBEE practitioners and transformation managers. There is a need to place a stronger focus on ensuring that companies are working towards achieving the outlined B-BBEE goals and that the intended benefits are reaching the targeted black beneficiaries. The shift from being transactional to transformational is a must. Increased collaboration and partnerships Collaboration between businesses and stakeholders is expected to be a key theme. Companies may engage in strategic partnerships to pool resources, share best practices and collectively work towards achieving B-BBEE objectives, which will achieve larger impacts on the intended black beneficiaries. Focus on skills development Skills development has been a crucial pillar of B-BBEE, and there may be an intensified focus on training and upskilling initiatives. I do foresee companies exploring more innovative approaches to skills development, including mentorship programmes, online training platforms and partnerships with educational institutions to address the skills gaps in our country. Focus on job creation South Africa faces a large challenge in respect of unemployment. I hope to see more collaboration between the public and private sector to address challenges of unemployment. From a B-BBEE perspective, it would be great to see more of an uptake of participation under the Youth Employment Service initiative and giving a young people the opportunity to gain working experience. Inclusive procurement practices Procurement is a significant component of B-BBEE, and 2024 will probably witness a continued emphasis on inclusive procurement practices. Companies are encouraged to source goods and services from black-owned and black women-owned businesses, with a focus on small business. The evolution of B-BBEE transformation is inevitable. Companies must proactively adapt to the changing landscape, embracing technology, fostering collaboration and prioritising the holistic impact of their B-BBEE initiatives. The trajectory of B-BBEE transformation promises an array of pivotal changes and opportunities for businesses. As we anticipate updated B-BBEE Sector Codes of Good Practice, a pronounced emphasis on implementation and monitoring, increased collaboration and a sharpened focus on skills development, job creation, and inclusive procurement practices, the landscape of empowerment and economic growth is set to undergo significant evolution. Businesses must be vigilant in staying abreast of the developments, ready to pivot and align their strategies to effectively navigate the shifting B-BBEE landscape. Embracing innovation, forging strategic partnerships, and committing to impactful initiatives will be integral in not just meeting compliance criteria but fostering inclusive economic growth and addressing historical imbalances. Yuneal Padayachy is the chief support officer at The BEE Chamber . You can contact its team at members@bee.co.za or (011 726-3052). https://www.iol.co.za/business-report/economy/navigating-the-road-ahead-for-b-bbee-transformation-in-sa-b528d3e1-cb3f-4206-b8d8-53cc7ace8405
- COLLAPSE OF STEEL INDUSTRY IMMINENT, WARNS SEIFSA
Bongani Mdakane | 29th January 2024 The imminent collapse of South Africa’s steel industry poses a threat to thousands of employment, according to a warning from the Steel and Engineering Industries of Southern Africa (Seisfa). As of now, the industry employs 362 000 people, compared to 577 000 15 years ago. Seisfa COO Tafadzwa Chibanguza made this remark on Friday. More job losses are likely, he said. The main reasons behind the closure of the ArcelorMittal South Africa (Amsa) facility were slow economic growth, low gross fixed capital creation, energy-related structural constraints, and logistical challenges. Businesses at every stage of the value chain have to cope with these problems, and Chibanguza said that without quick action and reform, it is unlikely that they will be resolved in the medium term. Therefore, with a few modifications to account for the Amsa closure, it may be conceivable to estimate the current pace of employment declines into the medium term in the absence of reform. He is alluding to Amsa’s declaration at the end of the previous year that it was considering closing its factories in Newcastle and Vereeniging, which would have a devastating effect on the economies of both towns and eliminating 3 500 jobs. According to Chibanguza, the steel and engineering industries play a pivotal role in the South African economy, serving as the foundation of the nation’s unparalleled industrial base within the continent. According to him, “the value chain represented in the sector comprises the full metals value chain, from merchants and service centres to metal fabrication, heavy and light engineering, and metal manufacturing [ferrous and non-ferrous].” Numerous other industries, such as water, logistics, mining, construction, agriculture, and many facets of the electrical supply business, depend heavily on this industry for its input needs. In addition, the industry exports 40% of its total output, generating an annual gain in foreign exchange revenues of $20-billion for the country. The CEO of the National Employers Association of South Africa, Gerhard Papenfus, predicted that continued government meddling in the steel sector will lead to the sector’s inevitable steady decline and Amsa’s eventual extinction. “Minister Patel continues to introduce and renew these duties despite the harmful effects. This raises the question, why continue with a policy that is reducing the competitiveness of the steel downstream and hastening the alarming trend of de-industrialisation, which is a primary cause of the sharp rise in unemployment and ensuing socioeconomic instability? “The only way to stop the steel industry’s fall is to stop and reverse the department of trade, industry and competition’s irrational initiatives. In the near term this will cause disruption, but over time, the industry will return to balance.” ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/collapse-of-steel-industry-imminent-warns-seifsa/
- INSETA ‘BELLIGERENCE’ IMPERILS YOUTH JOB OPPORTUNITIES
Edwin Naidu | 27 January 2024 What happens to learners when left in the lurch by the organisation meant to help them? In a major blow for transformation, hundreds of students who have completed learnerships for critical skills in the insurance sector have been denied their accreditation certificates from the Insurance Sector Education and Training Authority (Inseta). As a result, they cannot work in the insurance industry and up to two years of training may have been in vain. Scores of students are being denied the opportunity to work in the sector dealing with long-term insurance, short-term insurance, life insurance, insurance and pension funding, risk management, unit trusts, administration of health insurance, funeral insurance, reinsurance, ancillary and intermediary services. Some have been awaiting their certificates since 2020. Carol Mentz, a learner, asked the Inseta to conduct quality assurance and issue her with a certificate. It was a requirement for her job application at Hyundai, the South Korean car manufacturer. Unfortunately, due to not receiving the certification, she lost her job. In emails, she pleaded with the Inseta to help load the accreditation onto the system so that she could work. It never happened. Learner Craig McLachlan has been awaiting his certificate since 2022. He urgently needed to show proof of his qualifications to his employer. The learner’s commission was stopped because of the non-certification. Another learner, Vuyolwethu Malamlela, was fortunate. He was fired because he did not have his accreditation. However, following extensive interventions from his training institution, he was reinstated after receiving the certification. At least 192 students who have completed the skills training programme are awaiting accreditation for 2023. It has been estimated that another 555 have not been accredited since 2020 because the data may have been lost or mysteriously disappeared. In another twist, some students may have received their certification without putting in the hours. The Inseta's inaction on certificates means that instead of helping students, it is throwing them on the street – and passing the blame for the delays. The students are in the crossfire involving Inseta and the respected skills development provider the Graduate Institute of Financial Sciences (GIFS), through whom hundreds of students have undergone training. The penny dropped when GIFS complained to the Public Protector about alleged corruption, inefficiencies and operational matters of concern related to the management of students' accreditation. But instead of addressing the issue, Inseta maintained an uncompromising attitude, going to the extent of axing GIFS, which has been involved in the industry for almost two decades. Whistle-blowers are not protected in South Africa. While GIFS says it wants to prevent Inseta from being "captured", avoiding a long-term collapse of the sector, it is the students who are suffering. It also begs the question, what is Inseta doing to honour its mandate to “grow the pool and quality of critical and scarce skills within the insurance sector” when hundreds of students are left in limbo? This conduct occurs against a backdrop of corporations contributing massively to the Skills Development Levy (which companies pay to upskill their staff). Yet, annually under Inseta's watch, leadership funding has been cut – so much for giving youth in the country a chance. It has emerged that employers who question the reduced funding and Inseta's poor service delivery are victimised or, like in the GIFS case, have their funding cut. On October 17 last year, GIFS asked the Public Protector to intervene, expressing concern that Inseta was riddled with corruption. Despite being framed as a neutral regulatory body, GIFS uncovered evidence that Inseta deliberately streams prospective learners to one favoured learning institution whose educational practices have been questioned. The head of this rival training body favoured by Inseta labels it “a frivolous competitor making claims”. The Public Protector takes it seriously enough to warrant a probe. Ironically, GIFS' whistle-blowing has resulted in Inseta launching a public campaign to discredit it and put it out of business, despite the educational institution's crucial role in training most of South Africa's insurance professionals. When the institute closed for the end-of-year holiday on December 14 last year, Inseta sent GIFS a letter at 5:38pm, informing it of its immediate de-accreditation as a Skills Development Provider. They warned other service providers not to work with them – or face the music. GIFS programmes form part of the National Qualifications Framework and were approved by the South African Qualifications Authority. They're experts when it comes to skills development in the country. In addition, Inseta itself had awarded GIFS full accreditation status up to June 2024 in line with its practice of awarding certification annually. So, GIFS turned to the courts for help. In an urgent High Court interdict on January 4 this year, GIFS' legal counsel accused Inseta of corporate bullying and victimisation. They argued that Inseta's withdrawal of GIFS' accreditation was based on a GIFS fraud investigation report compiled just over two years ago, now under review in the courts. GIFS maintains the report is fraught with trumped-up allegations, overt bias, glaring irregularities and multiple procedural flaws. It has only held off on its legal review as Inseta renewed its accreditation after the report was finalised in 2021. But the court ordered Inseta to reinstate GIFS' full certification within 24 hours; withdraw all unlawful notifications it had distributed to industry stakeholders informing them of GIFS' de-accreditation; reassure the public on its website and via email of the complete restoration of GIFS' accreditation and pay the costs of GIFS' legal counsel. Inseta has ignored the court order. Chief Executive Officer Gugu Mkhize dismissed questions about the case and the complaint before the Public Protector. That is how bullies operate. They are going to appeal and waste taxpayers’ money while learners are left in the lurch. With the Minister deflecting a scandal and the lack of delivery from the National Student Financial Aid Scheme (NSFAS), one can understand his attention is elsewhere. But what about the Quality Council for Trade and Occupations (QCTO) doing its job and holding Inseta accountable for its delay in issuing certification that jeopardises the very young people who need the piece of paper they worked hard for? The silent QCTO is responsible for quality assurance and the oversight of the design, accreditation, implementation, assessment and certification of occupational qualifications, part-qualifications and skills programmes. Why look the other way? Inseta's belligerence now means that students without proof of their qualifications risk losing their livelihoods. Is that how we look after learners? ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/news/politics/inseta-belligerence-imperils-youth-job-opportunities-ef84ab35-61fa-4cd7-a44b-5e37ebbf5e96
- ANNUAL SUBMISSIONS | WORKPLACE SKILLS PLANS & ANNUAL TRAINING REPORTS
For most SETAs, the deadline for submitting Workplace Skills Plans (WSPs) and Annual Training Reports (ATRs) is 30th April 2024. Where organisations must submit these reports to their relevant SETA, they should obtain points under the Skills Development element. As Skills Development is an identified Priority Element, not submitting an ATR and WSP could trigger the Discounting Principle, which will impact an organisation’s overall score. The information contained in the WSP and ATR must coincide with the data submitted to an organisation's B-BBEE Rating Agency at the time of their B-BBEE Verification. Both the WSP and ATR are strategically designed documents that systematically identify any skills gaps, which align with the government's overall Skills Development Strategy. Both intend to track development, plot succession plans, and monitor the overall progress of organisations against set targets. Skills Development Services are available for any queries or challenges regarding submissions.
- EMPLOYEE BURSAR SALARY RECOGNITION
An organisation may not claim the salary for an Employee Bursar as part of its Bursary Programme. However, as per 2.1.1.2 of Statement 300 of the Amended General B-BBEE Codes of Good Practice , an organisation may claim a Stipend for an unemployed Bursar. 2.1.1.2 refers: “Skills Development Expenditure on bursaries for ‘Black’ Students at Higher Education Institutions”. Furthermore, clause 5.5 states: “Salaries or wages paid to an employee participating as a learner in any Learning Programme constitute Skills Development Expenditure if the Learning Programme is a Learnership, Internship and Apprenticeship (Category B, C and D) of the Learning Programme Matrix or a stipend linked to a bursary programme in terms of paragraph 2.1.1.2.” Historically, this principle results in organisations giving preference to unemployed Bursars, where they can claim a higher overall cost. Members need to consider the return on investment as well as the B-BBEE points when developing their bursary strategy. Additionally, members must ascertain whether bursaries fall into their Employee Value Proposition (EVP) and their Training Plan before being driven blindly by the B-BBEE points in isolation. Skills Development Services are on hand to guide members in making expenditure claims.
- WHO HAS THE RIGHT TO SIGN A SWORN AFFIDAVIT?
The author or deponent of a Sworn Affidavit must be a duly represented registered Director / Owner / Shareholder / Member etc. of an organisation as per company documentation. Where an organisation has foreign shareholders, the same principle applies. A Sworn Affidavit is invalid if anyone other than duly represented individuals function as a deponent. Certificate Collection Services are available to assist with identifying valid and invalid Sworn Affidavits.
- MASTERCARD TO EMPLOY 14 YOUTH THIS YEAR AS PART OF YES SCHEME
Schalk Burger | 30 January 2024 Global payments technology company Mastercard has partnered with South Africa's Youth Employment Service (YES) to help bridge the youth unemployment gap in the country and will take in 14 YES youth during this year, up from the 12 it employed in 2023. The intake is pivotal in providing young individuals with crucial work experience, exposure and a unique opportunity to gain experience in the global payments industry. “Mastercard is deeply committed to forging opportunities for African youth through various channels and partnerships. We are addressing the significant challenge of youth unemployment, especially in South Africa, by providing opportunities for cognate work experience and developing relevant in-demand skills. “We plan to scale these initiatives and make them sustainable in the coming years,” says Mastercard People Business Partner sub-Saharan Africa director Akinola Akinrin. “The commitment is exemplified through our recent announcement of a significant in-market investment in South African infrastructure that aligns with the government’s Vision 2025 strategy, along with the establishment of two new data centres. These developments further highlight our focus on addressing regional challenges, and our dedication to making a meaningful impact on the African continent. “Our partnership with YES is in line with building collaborative and productive partnerships across the public and private sectors, with an emphasis on government priorities,” Akinrin adds. It is estimated that, by 2030, the number of young people in the African labour force will increase to 375-million. This means that, by 2035, there will be more young people entering the workforce each year than in the rest of the world combined. One of the long-term objectives of Mastercard’s partnership with YES is to provide young people with 12 months of meaningful, quality workplace experience, and sustainable jobs. The goal is to equip the youth with skills that will grant them access to the economy, while also providing them with an opportunity to make a significant contribution towards the development of society. “Continuing our partnership with Mastercard is a testament to our ongoing commitment to provide youth the opportunity to gain valuable skills and experience in the global payments industry, and to make an impact on the youth employment crisis in South Africa,” says YES CEO Ravi Naidoo. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/mastercard-to-employ-14-youth-this-year-as-part-of-yes-scheme-2024-01-30
- MAKE YOUR COMPANY’S TRAINING PAY FOR ITSELF
IT-Online | 31 January 2024 Strategic business planning in South Africa needs a forward-thinking approach so when it comes to cultivating a skilled workforce, there is one action that repeatedly delivers – the inclusion of learnerships into Workplace Skills Programmes (WSP) and Annual Training Reports (ATR). “Companies are constantly seeking ways to remain competitive and future-ready,” says Rajan Naidoo, MD of EduPower Skills Academy. “One of the best ways to achieve this is to leverage learnerships in their WSP and ATR. “This not only contributes to the creation of a robust talent pipeline, it also unlocks substantial financial benefits in the form of mandatory and discretionary grants.” Understanding WSP and ATR. WSP and ATR are integral components of the Skills Development Act in South Africa. The WSP outlines a company’s skills development needs and strategies, while the ATR serves as a report on the actual training undertaken. “These documents are fundamental for companies seeking to align their workforce with industry demands and government regulations,” explains Naidoo. The role of learnerships Tried and tested, learnerships are one of the best mechanisms for building a talent pipeline. These work-based learning programmes integrate structured theoretical learning with practical, on-the-job experience. “Learnerships greatly enhance the employability of individuals and with the skills they gain over the 12 months of the programme, graduates can add value from day one,” he adds. “By including learnerships in the WSP and ATR, businesses can, therefore, achieve a multi-faceted approach to employee development that benefits both the business and its workforce.” Creating a talent pipeline Another advantage of incorporating learnerships into your WSP and ATR is that fact that this will allow companies to identify and nurture individuals with potential, moulding them into skilled and competent professionals. “This provides a mechanism to address current skills gaps and ensures the sustainable flow of qualified employees to meet evolving industry needs,” states Naidoo. Financial benefits Beyond the intrinsic value of cultivating talent, integrating learnerships into WSP and ATR is a strategic move that also pays off financially. Companies can tap into the government incentives in the form of Mandatory and Discretionary Grants available through the Skills Development Levies Act, enhancing their return on investment in skills development. * Mandatory Grants: Companies required to pay skills levies are eligible for mandatory grants when they submit their WSP and ATR. By including learnerships in these plans, businesses increase their chances of qualifying for a higher percentage of the grant. This serves as a direct financial incentive for investing in learnerships. * Discretionary Grants: In addition to mandatory grants, companies may qualify for discretionary grants based on their commitment to promoting skills development. By aligning their learnerships with the strategic objectives of the relevant SETA, businesses can access additional funding, amplifying the financial benefits associated with talent development. Strategic considerations for success Naidoo advises companies that want to maximise the impact of learnerships in their WSP and ATR to adopt a strategic approach that includes the following: * Alignment with Organisational Goals: Ensure that learnerships are aligned with the overall strategic goals and skills development needs of the company. * Partnerships with SETAs: Collaborate closely with relevant SETAs to identify priority areas and secure discretionary grants that support targeted skills development initiatives. * Effective Implementation: Work with an accredited and reputable training provider that will implement your learnerships effectively, providing a balance between theoretical knowledge and practical experience to create well-rounded professionals. * Monitoring and Evaluation: Regularly monitor and evaluate the progress and outcomes of learnership initiatives, adjusting strategies as needed to optimise results. He emphasises that by strategically incorporating learnerships into the WSP/ATR framework, companies establish the groundwork for long-term success. “As organisations prioritise learnerships aligned with their business goals, they not only augment their eligibility for government incentives but also pave the way for a future-ready workforce. This progressive approach simultaneously contributes to addressing unemployment and inequality in South Africa,” Naidoo concludes. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://it-online.co.za/2024/01/31/make-your-companys-training-pay-for-itself/
- WHY SA PROCUREMENT REGULATIONS SPELL A DEATH SENTENCE FOR ESKOM GENERATION IN A LIBERALISED ELECTRICITY MARKET
Opinion | 31 January 2024 While the South African government maintains an official position that the unbundling of Eskom into three entities, transmission, distribution, and generation, won’t lead to privatisation, the assertion that the move is “reckless” and would result in Eskom’s eventual death spiral could prove to be valid. In the current regulatory environment that Schedule 2 state-owned enterprises (SOEs) like Eskom are compelled to operate under, there is no possibility in the world that Eskom Generation state-owned company would be able to sell electricity through the National Transmission Company and still be competitive against independent “subcontracting” power producers (IPPs). Eskom Generation will, under an unbundled framework and with the burden of all the red tape, without a shadow of doubt, be the most expensive producer of electricity in South Africa. The policies that hamstring Eskom are a consequence of the strict transformation agenda, mandatory localisation laws and the Preferential Procurement Policy Framework Act (PPPFA), as well as the so called “Treasury Instructions”. Contrary to public misperception, an SOE does not operate like an ordinary company. One simply cannot pick up the phone and call the best-suited company to solve the problem at hand, as doing so would “exclude potential new players in the market”, because the SOE is forced to acquire services through a competitive bidding process. Ignoring competitive bidding even for an emergency task would automatically be classified as fruitless and wasteful, or irregular expenditure as per the regulations. In contrast with the private sector, where there is more discretion, it sometimes does not matter to pay a small premium to get operations up and running fast, because any downtime is deemed wasteful expenditure that affects the private company’s bottom line. Government regulations do not allow such business thinking and current procurement policies do not factor in the important consideration of opportunity cost into the strategies. With the current procurement systems imposed on SOEs, even a straightforward task such as securing a contractor for emergency repairs can extend to weeks instead of hours, as is the case for private power producers. Despite being labelled an “emergency”, the process is not expedited according to the scope of “emergency” regulations. As outlined in Treasury Note 3 of 2016/17, emergency procurement is only limited to situations where there is a serious and unexpected threat to health, life, property, or the environment, necessitating immediate action and lacking sufficient time for competitive bids. An operational emergency, such as a critical component failure in a power station, does not trigger emergency procurement under the current framework, and any acquisition of components or subcontractors to address the issue must undergo a competitive bidding process. Incidentally, the issue of “emergency” procurement came up in early 2021 when Eskom’s former CEO André de Ruyter requested the South African Treasury to amend the regulations and allow Eskom to use original equipment manufacturers (OEMs) instead of the politically connected black economic empowerment (BEE) middlemen. They amended the regulation and introduced Instructions 3 of 2021/22, which outlines the concept of “urgent procurement”. Urgent cases involve critical early delivery where inviting competitive bids is either impossible or impractical, not due to improper planning. While it may seem like a reprieve from Treasury, even this approach comes with specific conditions and therefore an admin burden, because urgent procurement must: – clearly define in its procurement policy cases in which urgent procurement may be invoked – the process to be followed in identifying suppliers for urgent procurement – draw up plans to curtail such procurement – carry out an assessment of all instances that give rise to such procurement. Therefore, even a task such as straightforward as an urgent procurement will necessitate administrative activities and increase procurement costs, especially as per the regulations the auditor-general must conduct an audit of these cases. As the upcoming articles in this series will demonstrate, Eskom is being hindered by a set of impractical policies and regulations such as the above-mentioned emergency and urgent procurement regulations as per Treasury Note 3. Reforming these policies is in our view one of the prerequisites for unbundling Eskom; otherwise, South Africa may end up with a compromised electricity system, leading to either the de facto demise of Eskom Generation or a South African led government effort to wield control over electricity supply as the privatisation process commences. Amid growing political pressure from unions in the Mpumalanga region, we anticipate that the South African government might deviate from the path of unbundling by leveraging the influence it still holds over the institutions under its control. The government could still obstruct the process through the selective application of tenders or licensing laws via the Department of Mineral Resources and Energy (DMRE) or by asserting political pressure on the the National Electricity Regulator of South Africa (Nersa). In the scenario of backtracking on the commitment to unbundling, Eskom Generation retains a de facto monopoly over South Africa’s electricity supply, resulting in a more rapid decline in energy availability, an increase in the price of electricity, and a surge in fuel poverty among South Africa’s most vulnerable communities. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/economy/why-sa-procurement-regulations-spell-a-death-sentence-for-eskom-generation-in-a-liberalised-electricity-market-f81d2be2-f448-46bb-9164-bb53e9119b9c
- SUGAR INDUSTRY MEETS R1BN TRANSFORMATION FUNDS DISBURSEMENT GOAL
Schalk Burger | 31 January 2024 Industry organisation the South African Cane Growers Association (SA Canegrowers) says that, following the disbursement of transformation funding this month, the sugar industry has met its objective of investing more than R1-billion in transformation funding over five years. The funding has been critical in sustaining the livelihoods of more than 21 000 small-scale growers and their farm workers, as the industry has endured waves of crises over the past five years, says SA Canegrowers chairperson Andrew Russell. In January, the South African Sugar Association distributed nearly R176-million in dedicated transformation funding, which brought the total paid out to small-scale and black-owned growers, as well as land reform beneficiaries, between 2019 and 2024 to more than R1-billion. These payments, to which growers contributed 64%, have been distributed biannually over the five-year period. “Through these payments, the industry has been able to help the most vulnerable to absorb the shocks caused by drought and floods, cheap sugar imports, the Health Promotion Levy (or sugar tax), Covid-19 and the ongoing crisis in parts of the milling industry,” Russell points out. Further, the funding commitment also supported the objectives of the Sugarcane Value Chain Masterplan, with the first three-year phase concluded in 2023. Industry stakeholders have since worked together to conceptualise a framework for a second phase of the Masterplan. This new phase will help to continue the work of the first phase, protecting vital jobs within the industry and restructuring it for a sustainable, diversified future, he says. It is essential that government supports the efforts of the industry by reaffirming its commitment to prioritise procurement of locally produced sugar, and by halting all plans to increase the sugar tax that has contributed to the hardships faced by the industry, he asserts. “SA Canegrowers is committed to preserving and expanding opportunities in the industry for young, black and women growers among others. To achieve this, we must overcome the challenges the industry faces and work together with all industry stakeholders, especially government, to create a policy environment within which new growers can find a foothold and build sustainable livelihoods,” says Russell. SA Canegrowers urges President Cyril Ramaphosa and Finance Minister Enoch Godongwana to announce critical measures to help it to protect the one-million livelihoods the industry supports, including through the suspension of the Health Promotion Levy. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/sugar-industry-meets-r1bn-transformation-funds-disbursement-goal-2024-01-31
- SMMES HAD A TOUGH 2023 FIGHTING OFF MANY CHALLENGES BUT CAN LOOK AHEAD ON A POSITIVE NOTE FOR THE NEW YEAR
Ashley Lechman | 1 February 2024 Most survey respondents identified sky-rocketing operational costs, as well as continuous load shedding throughout the year as the main challenges stifling performance in 2023. Small businesses in South Africa last year found it tough to operate amid the many economic challenges faced. This was according to Garth Rossiter, the head of credit and chief risk officer at Lula. Lula is a fast-growing Business 2 Business digital credit and capital provider in the country. Rossiter said that 2023 was a difficult year for SMMEs, marked by fluctuating market dynamics. “The results of our recent business performance survey are sobering. Nearly 68% of businesses did not meet their own goals, with close to 40% of respondents reportedly falling significantly below their business and growth expectations,” Rossiter said. Over 609 South African SMMEs responded to a survey promoted by Lula in December 2023. The survey ran from December 21, 2023 till January 5, 2024 and asked SMMEs to look back on the year in trade and answer questions related to business, finance, and their challenges while also looking ahead to 2024. Most survey respondents identified sky-rocketing operational costs, as well as continuous load shedding throughout the year as the main challenges stifling performance in 2023. “The silver lining was that, of the 32% of businesses which met their business goals, results of more than half of these respondents exceeded expectations, highlighting that South African businesses are resilient. Broader economic stagnation led to shrinking customer pools, which in turn meant that businesses had to tighten belts in 2023,” Rossiter said. “In our 2023 survey, general inflation emerged as the most significant challenge affecting more than 80% of SMME owners and entrepreneurs. The increased cost of fuel (reported by 75% of businesses surveyed) was also a major factor,” Rossiter said. “In terms of business cash flow and financial management, access to working capital remains a top-of-mind concern. Many respondents also pointed to the high interest rates and fees associated with capital acquisition. Furthermore, around half of the responding businesses said they grappled with slow customer payments, which impacted their daily operations and cash flow. Nearly 40% struggled with effectively tracking and managing their cash flow; an obstacle we are working to solve with a range of digital banking and business finance tools. “Our official trading numbers for 2023, suggest that, despite the challenging economic climate, we have seen notable areas of growth and resilience. It is clear that our focused approach to providing tailored financial solutions to SMMEs has assisted our clients in addressing critical pain points with which SA’s small businesses commonly grapple,” Rossiter said. Despite the challenging year that was, most businesses Lulo asked (65%) are feeling confident going into 2024. The survey revealed that this optimistic outlook suggested a sense of positivity and a prevailing belief that the business environment will improve in 2024. “The most-cited rationale for this confidence is rising customer demand, and secondly, the galloping pace of technological innovation, which promises to boost operational efficiency considerably over the coming years,” Rossiter said. “An overwhelming majority, almost nine out of every ten, anticipate a need for more funding or financial support in 2024. Most indicated they would use such capital to cover the costs of equipment and maintenance, with about half indicating they would primarily use it to drive growth and expansion. Inventory and materials purchases, and simply covering operational costs also featured prominently,” Rossiter told Business Report. He further advised that 2024 would be a year shaped by trends like a focus on environmental and social sustainability; the steady rise of remote and hybrid work models; and greater personalisation and customer-centric approaches. “On the tech side, get ready to embrace e-commerce and online marketplaces, and to create digital marketing content. Also, keep a cautious eye on the rise of generative AI, and try to spot any business opportunities or threats it might present,” he said. “As the business year kicks off in earnest, we expect to see South Africa’s businesses target new markets and invest in the skills training needed to expand. Our advice is to consider upscaling the tech they use this year to help save time – and ultimately, money – in 2024. We suggest that companies self-reflect honestly, analyse their performance and try to identify their ‘low-hanging fruits’,” Rossiter said. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/entrepreneurs/smmes-had-a-tough-2023-fighting-off-many-challenges-but-can-look-ahead-on-a-positive-note-for-the-new-year-87d4e3e9-0473-45b9-b6e2-3792f251fd24
- CANAL+ FACES UPHILL BATTLE TO LAND MULTICHOICE DEAL
Nkosinathi Ndlovu | 4 February 2024 French broadcasting giant Groupe Canal+ has expressed confidence in its bid to acquire South African pay-television operator MultiChoice Group, despite the high regulatory hurdles the Vivendi Group subsidiary must first overcome. “The deal would have to go through both [communications regulator] Icasa and the Competition Commission, and Icasa is very strict on foreign ownership rules. There is no exemption from section 64 of the Electronic Communications Act (ECA),” Kerron Edmunson, legal and regulatory specialist at Kerron Edmunson, said in an interview with TechCentral on Friday. Section 64 of the ECA limits foreign ownership of South African broadcasters to 20% of voting rights, although their economic interest may be higher. This is the scenario currently at play regarding the Canal+/MultiChoice relationship, where Canal+ owns 31.7% of MultiChoice but does not enjoy an equivalent share in voting rights. Proposed changes to legislation, in the form of the white paper on audio-visual services, is still in draft form – and are unlikely to be gazetted for years still. The white paper has proposed lifting the 20% restriction to 49% (for both the economic and voting interests) for any foreign entity investing in a local broadcaster. “Canal+ would have made their decision to bid with the upcoming legislation in mind, which could take at least a year to come into effect, but we must consider that the draft has been around for some time already,” said Edmunson. The draft legislation could take years to come into effect, and even if it does, it likely won’t solve Canal+’s problem as it wants a controlling stake in MultiChoice. Another point for consideration is Icasa’s rules pertaining to transformation, an agenda which the regulator is cracking down on in 2024. BEE rules Transformation legislation in South Africa’s broadcasting and telecommunications sectors dates back to the Telecommunications Act of 1996, with other stipulations outlined in its replacement law, the ECA of 2005. After noting that the industry was largely non-compliant regarding transformation, Icasa published the Limitations of Control and Equity Ownership by Historically Disadvantaged Groups regulations in March 2021. Under the rules, licensees must have a minimum of 30% of their equity owned by previously disadvantaged individuals and reach level-4 broad-based black economic empowerment status as defined by the IT sector empowerment codes. The deadline for compliance is 31 March this year. “Canal+ would have to set up a local entity, have an office, and employ local staff,” said Edmunson, explaining some of the steps the broadcaster will have to take to meet the transformation criteria. The French broadcaster’s intention to unbundle from parent Vivendi and pursue a separate listing in South Africa will help its cause, but the MultiChoice acquisition may be blocked, not due to a lack of compliance, but on the basis of market dynamics and competition law. The Competition Commission aside, Icasa itself has been carrying out an inquiry into the subscription broadcasting services market since 2016. In a preliminary findings document from 2019, Icasa found that MultiChoice “possessed significant power in markets that are characterised by ineffective competition”, effectively saying that MultiChoice holds a monopoly in its operational markets. As a remedy, the regulator proposed several changes to the broadcast licensing regime. The matter is currently open for stakeholder comment before a final decision is made. Edmunson suggests that the Competition Commission’s view of MultiChoice’s position in the market is likely similar to Icasa’s. “You have MultiChoice having a monopoly that the commission says it wants to remedy and then Canal+, which is just a bigger MultiChoice with even deeper pockets and more ‘monopolistic’ power wanting to take it over. Allowing the transaction would go against commission’s current thinking,” said Edmunson. Justifying Groupe Canal+’s optimism is a business case that is hard to argue against: the combined forces of Africa’s market leaders in the Anglophone and Francophone pay-TV markets would give birth to a continental broadcasting powerhouse. “Combined with Canal+, MultiChoice would have the resources to invest in scale, local African talent and stories, and best in class technology, to allow it to grow in Africa and compete with the global streaming media giants. We are steadfast in our belief that MultiChoice could enjoy a bright future as part of a combined group with Canal+,” said Maxime Saada, chairman and CEO of Canal+, in a statement on Thursday. However, foreign ownership restrictions and the effect the deal would have on competition in the local market might prove an insurmountable hurdle for Canal+. – © 2024 NewsCentral Media ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://techcentral.co.za/canal-plus-uphill-battle-multichoice-deal/239071/