Date: 10/04/2003
Source: Deputy Ministry of Trade and Industry
Title: Hendricks: Launch of Black Business Supplier Development Programme
SPEECH BY DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, AT THE LAUNCH OF THE BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME, 10 April 2003
Programme Director, Ladies and Gentlemen. Thank you for inviting me here today to open this event. The problems facing black owned businesses are many and the government has been grappling with these issues and how to best respond to black businesses needs for several years. We recently released the Black Economic Empowerment Strategy as a guiding document for us to support and improve the position of black enterprises in South Africa.
Today's launch of Black Business Supplier Development Programme less than three weeks after the release of the Black Economic Empowerment Strategy marks the beginning of a new chapter that shapes and changes the allocation of resources especially, incentives schemes, towards black owned businesses.
To-date over 80% of incentives given by the Department of Trade and Industry are received by white owned companies, which is largely due to the structure of the economy. This does not reflect the demographics of South Africa but is a reflection of the Apartheid legacy and is something that we in the dti have to change as we embark on our mission of socio-economic transformation of our country, with the BEE strategy as one of our tools. Part of the challenges that we face is that we often find that Black Economic Empowerment companies do not have the capital to start up and grow their businesses. In addition, they might lack the skills that are necessary to manage their companies effectively nor do BEE companies have the business networks, and the support and information that these networks bring, to enable them to overcome these gaps. A further challenge in this area is that the Black business community is still not united and we all know the negative impact of a non-cohesive voice. There are also many challenges that BEE companies have that are as a result of the environment or how business is done in South Africa, which limits their access to markets and opportunities.
In order to overcome these many challenges, what the BEE strategy strives to do is ensure that there is:
1. Economic Growth that is centred on the participation of black people,
2. Equitable distribution through broader participation in the mainstream economy,
3. An inclusive process in the Empowerment of black owned enterprises, and,
4. Good corporate governance by black enterprises.
The measure that we are launching today, the Black Business Supplier Development Programme addresses these four principles behind the BEE Strategy and the BBSDP should be seen as one of the implementation tools of the BEE strategy as it is supporting the strategy by ensuring that small black businesses with potential are given the necessary assistance to grow their enterprise and become more competitive.
The programme provides black-owned enterprises with access to business development by supporting their enterprises' core competencies such as management skills, marketing, productivity improvements, obtaining international quality standards such as ISO 9000 and ISO 1400, and improving their logistic and supply chain management. The Black Business Supplier Development programme will achieve this by offering an incentive that will subsidise 80% of the costs of these business development services. Dr Mohale the CEO of The Enterprise Organisation, the division of the dti that will be overseeing the incentive, will give more details about how the incentive will work during her presentation later today.
Through BBSDP Small Medium Micro Enterprises that have exhibited potential for growth are fast tracked. The BBSDP complements other government support measures such as the current affirmative procurement and outsourcing. The programme also fosters linkages between black SMMEs and the corporate and public sector. Institutions such as Ntsika and their Tender Advice Centres and Business Linkages programme will be critical in ensuring that small businesses are supported in the area of business linkages and assisted to access this incentive.
In developing the BBSDP it was necessary for us to first understand the needs of black businesses. One of the main needs that we have identified is access to finance. The other main need is business development support. While the BBSDP does not directly address the issue of access to finance by offering loan or grant finance to a company, we believe that by supporting the development of the enterprise and improving its capabilities the business will be in a much better position to obtain loan or investment finance. In addition to this the dti is currently developing new mechanisms to improve access to finance and boosting the resources of institutions such as the National Empowerment Fund and Khula Enterprise Finance so that they are able to extend their reach and offer finance to a great number of enterprises.
Access to information is another stumbling block that hampers the growth of Black Economic Empowerment. A lot has been done in this area however, little of what the government has made available is known to the broad majority of the BEE community. And to this effect the dti is responding by increasing information access points through partnerships with municipalities, NGO's, University and the private sector.
To conclude many questions have been raised regarding the position of the BEE strategy and its relationship to the SMME strategy. It should be clear that the launch of the BEE strategy in no way takes anything away from our current focus on small business development, as the SMME sector is still considered a priority area and the engine of growth for our economy. One should view the BEE strategy and the measures we will take to implement this strategy and support black businesses as a supplementary measure that will further assist black owned small businesses. With the additional stimuli for black owned enterprises offered by the BEE strategy we will no doubt see improved growth and opportunities for these businesses.
Issued by the Office of the Deputy Minister of Trade and Industry, 10 April 2003
Source: Deputy Ministry of Trade and Industry
Title: Hendricks: Launch of Black Business Supplier Development Programme
SPEECH BY DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, AT THE LAUNCH OF THE BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME, 10 April 2003
Programme Director, Ladies and Gentlemen. Thank you for inviting me here today to open this event. The problems facing black owned businesses are many and the government has been grappling with these issues and how to best respond to black businesses needs for several years. We recently released the Black Economic Empowerment Strategy as a guiding document for us to support and improve the position of black enterprises in South Africa.
Today's launch of Black Business Supplier Development Programme less than three weeks after the release of the Black Economic Empowerment Strategy marks the beginning of a new chapter that shapes and changes the allocation of resources especially, incentives schemes, towards black owned businesses.
To-date over 80% of incentives given by the Department of Trade and Industry are received by white owned companies, which is largely due to the structure of the economy. This does not reflect the demographics of South Africa but is a reflection of the Apartheid legacy and is something that we in the dti have to change as we embark on our mission of socio-economic transformation of our country, with the BEE strategy as one of our tools. Part of the challenges that we face is that we often find that Black Economic Empowerment companies do not have the capital to start up and grow their businesses. In addition, they might lack the skills that are necessary to manage their companies effectively nor do BEE companies have the business networks, and the support and information that these networks bring, to enable them to overcome these gaps. A further challenge in this area is that the Black business community is still not united and we all know the negative impact of a non-cohesive voice. There are also many challenges that BEE companies have that are as a result of the environment or how business is done in South Africa, which limits their access to markets and opportunities.
In order to overcome these many challenges, what the BEE strategy strives to do is ensure that there is:
1. Economic Growth that is centred on the participation of black people,
2. Equitable distribution through broader participation in the mainstream economy,
3. An inclusive process in the Empowerment of black owned enterprises, and,
4. Good corporate governance by black enterprises.
The measure that we are launching today, the Black Business Supplier Development Programme addresses these four principles behind the BEE Strategy and the BBSDP should be seen as one of the implementation tools of the BEE strategy as it is supporting the strategy by ensuring that small black businesses with potential are given the necessary assistance to grow their enterprise and become more competitive.
The programme provides black-owned enterprises with access to business development by supporting their enterprises' core competencies such as management skills, marketing, productivity improvements, obtaining international quality standards such as ISO 9000 and ISO 1400, and improving their logistic and supply chain management. The Black Business Supplier Development programme will achieve this by offering an incentive that will subsidise 80% of the costs of these business development services. Dr Mohale the CEO of The Enterprise Organisation, the division of the dti that will be overseeing the incentive, will give more details about how the incentive will work during her presentation later today.
Through BBSDP Small Medium Micro Enterprises that have exhibited potential for growth are fast tracked. The BBSDP complements other government support measures such as the current affirmative procurement and outsourcing. The programme also fosters linkages between black SMMEs and the corporate and public sector. Institutions such as Ntsika and their Tender Advice Centres and Business Linkages programme will be critical in ensuring that small businesses are supported in the area of business linkages and assisted to access this incentive.
In developing the BBSDP it was necessary for us to first understand the needs of black businesses. One of the main needs that we have identified is access to finance. The other main need is business development support. While the BBSDP does not directly address the issue of access to finance by offering loan or grant finance to a company, we believe that by supporting the development of the enterprise and improving its capabilities the business will be in a much better position to obtain loan or investment finance. In addition to this the dti is currently developing new mechanisms to improve access to finance and boosting the resources of institutions such as the National Empowerment Fund and Khula Enterprise Finance so that they are able to extend their reach and offer finance to a great number of enterprises.
Access to information is another stumbling block that hampers the growth of Black Economic Empowerment. A lot has been done in this area however, little of what the government has made available is known to the broad majority of the BEE community. And to this effect the dti is responding by increasing information access points through partnerships with municipalities, NGO's, University and the private sector.
To conclude many questions have been raised regarding the position of the BEE strategy and its relationship to the SMME strategy. It should be clear that the launch of the BEE strategy in no way takes anything away from our current focus on small business development, as the SMME sector is still considered a priority area and the engine of growth for our economy. One should view the BEE strategy and the measures we will take to implement this strategy and support black businesses as a supplementary measure that will further assist black owned small businesses. With the additional stimuli for black owned enterprises offered by the BEE strategy we will no doubt see improved growth and opportunities for these businesses.
Issued by the Office of the Deputy Minister of Trade and Industry, 10 April 2003
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