Programme Director,
President of NAFCOC,
Deputy President of NAFCOC,
Secretary General of NAFCOC,
Members of the NEC,
Provincial Chairpersons and Secretaries of NAFCOC,
Delegates,
Distinguished guests,
Ladies and gentlemen.
Let me thank you for the opportunity to address this important session which, among other things, also marks the 48th birthday celebration of National African Chamber of Commerce and Industry (NAFCOC). As the province of the Eastern Cape, we are further honoured to host the 48th conference of this organisation, which was founded by visionary South Africans that, during the dark days of repression, saw the inevitability of freedom and a need for building a better life.
It is therefore fitting and appropriate to extend a word of gratitude to former Presidents of NAFCOC who led this organization during the days of the struggle for freedom. Among these giants on whose shoulders we stand today is Mr Maponya, Mr Choco, Dr Motsuenyane, Dr Nkonyeni, and in the nineties Mr Hlongwane. Fellow delegates, I mention these outstanding patriots because they steered this gigantic ship through the turbulent seas of the apartheid regime.
They were indeed a rare breed, a breed of selfless, conscientious and committed leaders who laid a solid foundation for the upliftment of black business people during apartheid. Through their commitment, work ethic and zeal, NAFCOC emerged from apartheid South Africa unscathed, stronger, united and ready to seize the opportunities of a democratic, non-racial, non-sexist and prosperous South Africa.
Indeed, since 1994 NAFCOC has been at the forefront of championing the interests of small businesses in South Africa and as such, the organisation has participated robustly in engagements that have seen the African National Congress (ANC) led government adopt a number of progressive pieces of legislation, to develop and support small businesses in our country. The ANC realised from the outset that small businesses are a vital mechanism of addressing unemployment, poverty and underdevelopment.
The pieces of legislation passed to advance these objectives over the 18 years of freedom and democracy include, the Black Economic Empowerment and the Broad-Based Black Economic Empowerment. We knew clearly well that direct government provision of social security system to fight poverty and the improvement of a social wage would not help resolve structural poverty and years of systematic and deliberate under development of areas of African people in particular. It is also in this context that we strongly believed in the potential of small and micro enterprises (SMMEs) to break many historic barriers and usher our people to the envisaged South Africa of our dreams.
The 11th President of the ANC, comrade Thabo Mbeki during his 2006 State of the Nation Address as President of South Africa said:
“Our experience with regard to the development of this sector indicates that we must pay particular attention to issues of access to capital, entrepreneurial training, assistance with marketing, and the development of cooperatives. Further, to contribute to the growth of the SMME sector, the government will reform its procurement programme to access some of its goods and services from small and medium businesses, ensuring that it pays for what it purchases promptly.”
The formal economy is crucial for our success, however its labour absorptive capacity is very limited and its role in helping us address massive unemployment was compromised during the recent world economic crisis.
I am also delighted that in our endeavours to build international partnership for growth and development, we are sharing the vision of a stronger SMME sector with NAFCOC. We are grateful therefore to NAFCOC for the honour of jointly hosting the Minister of Small Business Development in Indonesia.
As government we are deliberate in forging stronger relations with eastern countries because they have perfected to skill of building a formidable small business sector, such as Indonesia where this sector accounts for over 50% of the country’s Gross Domestic Product (GDP).
In breaking constraints to development, we are stepping up our relations with the BRICS countries as well as with a new emerging trading block that is composed of countries such as Indonesia, Vietnam, Turkey, Columbia and Mexico. These countries have phenomenal opportunities for you as businesses because they also have the market for quality products Eastern Cape small businesses can produce.
According to the United Nations Conference for Trade and Development (UNCTAD), the African Continent has continued to lose in the global distribution of Foreign Direct Investments (FDIs), while emerging, developing and transition economies have continued to experience significant increases in FDI inflows. At this moment I wish to throw down the gauntlet to members of NAFCOC to begin to look beyond the borders of South Africa for development opportunities, as our continent is the business capital of the future with some economies growing at double digit figures.
I also implore you to look beyond the traditional business outlets and consider venturing into greenfields investments and economy. This is set for explosion in the Eastern Cape as demonstrated by, among others, increasing interest in the renewable energy sector. I had an inspiring meeting earlier this week with Innowinds, and next week we are hosting an international conference on renewable energy here in East London.
Ladies and gentlemen, we also believe the ANC led government’s good intentions to build a formidable SMME sector could have been more successful than they have been. A number of variables have intervened and impacted negatively on this progress, which must be confronted by us together in order to succeed.
These factors include:
- a sense of entitlement among businesses who, even when they have won tenders do shoddy work
- some officials of government that distort processes by manipulating procurement to benefit their businesses that are trading with their employer
- resistance to the need to venture out of the traditional businesses we are most familiar with.
We must together address these factors and from the side of government, we have passed a policy that prohibits officials from doing business with their employer. We are also intensifying the fight against fraud and corruption. To succeed in these areas we need your buy-in as a sector, so that unscrupulous businesses of greedy people who want to ‘get rich quick’ at all costs get blacklisted and isolated.
We are equally unimpressed by the late payment of service providers by government officials which has led to bankruptcy and closure of many businesses. We welcome the announcement by the Minister in the Presidency Collins Chabane that a new system to crack the whip on government officials failing to pay service providers on time will be up and running next year, to add to our close tracking of compliance of departments with the 30 day invoice payment prescripts.
As a sector you need to deal with the behaviour of businesses that undermines the very progressive policies of government that are aimed at developing the sector. Because of shoddy work of some businesses, we are further spending hundreds of millions of rands to rebuild or correct houses built by people claimed to know what is required and then prioritised luxury cars and lavish lifestyles instead of ensuring appropriate mixes of cement in building houses for the poor. We must intensify our collaboration and partnerships with NAFCOC at all levels, which have been very progressive thus far.
As a province we are proud of the footprint we are making in terms of providing development finance, business infrastructure and Business Development Support to members of NAFCOC and other aspiring business people. This is at micro level or individual membership level.
Through the Eastern Cape Development Corporation, we continue to engage NAFCOC as an association of businesses in order to understand their financial and business development requirements. We are customising our products and service to respond to their needs. We do, from time to time, collaborate in undertaking projects with growing pockets of excellence in District Municipalities and in the Province. One of our highlights is our collaboration with NAFCOC to execute the “Buy Eastern Cape Campaign” as well as Local Business Service Centres.
The “Buy Eastern Cape Campaign” is an initiative aimed at promoting and enabling local (within and from Eastern Cape) procurement by the Eastern Cape government, local government, private sector and individual citizens. We must however never compromise quality of products and services because of a sense of entitlement that people must or should buy from our businesses irrespective.
The objectives of the Buy Eastern Cape Campaign include the following:
- Harnessing the power of government procurement to support economic growth and employment in manufacturing and production in the province.
- Identifying Eastern Cape sectors/products to participate in the national programme of designation for preferential local procurement.
- Identifying specific sectors/products to be supported through local procurement – primarily those with an Eastern Cape footprint/market that have the potential for growth, not those with an already established national/international market which may be prejudiced by perceptions of inter-regional competition.
- Identifying the policy and systemic changes required to implement Buy Eastern Cape in government procurement processes.
- Identifying interventions to develop the quality and competitiveness of Eastern Cape companies.
The second initiative is establishment of Local Business Service Centre within NAFCOC offices to support its members and other potential entrepreneurs with Business Development Services. The goal of the project is to build the capacity of members of the association with the aim of improving their competitiveness.
The programme involves the following:
1. Facilitating access to information;
2. Provision of business management skills in the following areas:
a. Costing and Pricing
b. Basic book keeping and financial management
c. Tendering
d. Mentorship
e. Marketing and customer care
f. Business Seminars and workshops and
g. Woman Entrepreneurship Programme
3. Facilitating access to the market; and
4. Facilitating access to finance.
Ladies and gentlemen the interventions we are making in small business development have to be sustained as we attempt to march towards the realisation of a South Africa that is free of unemployment, poverty and inequalities. Joblessness in the province is a very serious problem, as it is in South Africa as a whole. We must together reverse the current patterns of an Eastern Cape that trails behind the rest in job creation and reduce the current 28.3% unemployment rate.
The province is in a process of executing its Jobs Strategy. The strategy, among others, seeks to leverage government’s massive infrastructure development programme on which over R100 billion is already invested for the next five to seven years. This infrastructure development programme constitutes one of the five pillars of the Jobs Strategy.
Others are: Jobs Retention, New jobs in priority sectors including renewable energy sector, the social economy and Skills Development. We implore everyone to throw their weight behind these efforts so that we can deliver more than the targeted 150 000 jobs by 2014.
Key interventions in the strategy include scaling up the EPWP programme, our Industrial Jobs Stimulus Programme, and growing labour intensive sectors such as agro-industry. We realise as government that we will only be successful in our job creation efforts if we work as a united force. This will necessitate new and creative partnerships with industry, especially small businesses. Most importantly, our partnership must not be in theory, but expressed practically in projects that create jobs and change peoples’ lives.
To achieve this mammoth task we need a NAFCOC that is united, strong and stable. We need a NAFCOC that is driven by the broader objective of emancipating its members and our people from economic inequalities and bondages. A NAFCOC that is at war with itself, that is ravaged by leadership squabbles would not be able to achieve anything positive, in fact it would die a lonely death. I don’t think anyone of us wants that for an organisation that has given so much for black business people. You must resist the new tendency of shifting the focus of organisations to divisive leadership elections. Many organisations including political ones have suffered tremendously from this obsession with leadership elections.
In concluding, I wish you every success in your deliberations and hope that you will come with fresh ideas and a programme of action that would take the small business sector to new heights.
I might be seeing some of you for the last time this year, so let me take this opportunity to wish all of you a Merry Christmas and a In enjoying your quality time with your families, please share with the less fortunate so that they too can enjoy a great season of gifts and goodwill.
I thank you!
