Date: 21/08/2003
Source: Deputy Ministry of Trade and Industry
Title: Hendricks: Opening address at Alexandra seminar on small businesses
OPENING ADDRESS AT THE ALEXANDRA SEMINAR ON SMALL BUSINESSES BY THE DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, East Bank Hall (Alexandra), 21 August 2003
The honourable mayor of Alex in absentia,
Obed Bapela, MP
MPs and MPL
Honoured Guests
Entrepreneurs
Ladies and gentlemen
Thank you for inviting me to share with you what we can do together to make ours a winning nation.
Let me at the outset congratulate the organisers of this event and your member of parliament for putting up such an exciting programme because unless we take charge of our destiny no one will do it for us that is why I am here today to ensure I am part of a success story, the Alexandra success story.
Alexandra township was a centre of resistance against apartheid tyranny; from the 1940s to the 1980s, the people of Alex said no to apartheid, they did this through demonstrations, protests, bus boycotts and many other public campaigns, but the result was more repression. Many of the challenges that face the people of Alex today are as a result of the apartheid past.
The first challenge is that the residents of this area were dispossessed of their land and were not given the opportunity to own their own property. Today this negatively affects the asset base that people have, which in turn limits their access to resources. This becomes a problem when people want to apply for loans from the bank and do not have collateral. Some of the solutions that we as government have put in place through Khula are aimed at assisting SMMEs to overcome this problem of lack of collateral.
Another challenge is that the overcrowding in Alex still persists, this has negative social consequences and we still have people living in poverty, which further limits their ability to accumulate material wealth. For entrepreneurs, there is a positive aspect of having a large number of people living in your area - you have a large market in close proximity for your goods and services. The challenge is to increase the income levels for the residents of Alex and to ensure that your goods and services are good enough so that the money is spent on your enterprises and not at a business in another area.
The third challenge is that the neglect of the area by local government under apartheid has meant that inadequate council services were provided to this township. The impact of this is that businesses often do not have the proper infrastructure in which to operate, however, through the Alexandra regeneration programme, not only will this infrastructure be provided but opportunities will be created for businesses that can supply the equipment, services and skills that will be required for this upgrade.
Fourthly, residents in this area have had very limited exposure to running their own businesses and they have in the past been labourers and employees in companies. The impact of this is that many do not have entrepreneurial skills, however, there are many, many people in Alex that have practical and technical skills that can be used in business.
Whilst all the above presents major challenges, Alexandra holds the potential for a very bright future. The people of Alex could ignore this potential and the opportunities that have been created. You could look at the negative aspects of what is happening in the township and not see any hope in the situation that you find yourselves in. But if you look at the situation differently, find out what is being done to assist businesses - you will see that a lot is being done by the government to create an environment in which businesses and entrepreneurs can flourish.
Let me tell you what we as the government are doing to support small businesses.
Firstly, we are trying to empower businesses in South Africa by establishing and subsidising business support centres, these centres, many of which are supported by Ntsika, the government agency that provides not financial support services, help businesses by offering training, advice, and information, as well as by helping them to find business opportunities and tender for government contracts. There are also government agencies and programmes that help businesses improve the quality of their products so that they meet international standards for example, NAMAC, CSIR, SABS, and SAQI. To explain more of what government, the Department of Trade and Industry and its agencies can offer businesses you can call our customer care number on 0861 843 384 to get more information. You will hear more about these institutions during today's presentations.
Secondly, the government has been very active in negotiating international trade agreements and working closely with other countries to promote good relationships and promote peace and stability across the world. While our activities in this area are very far removed from what you are doing they have the potential to have a big impact on your businesses and the opportunities that you are able to access. For example, our trade agreements and trade relationships allow the goods that are produced in South Africa to be sold in other countries at far more favourable terms than would have been the case and we see many international trade delegations coming through to South Africa to find opportunities and to trade with South African businesses.
Thirdly, the government is helping South African businesses to export. We are subsidizing the costs of South African businesses to travel to other countries to market their products and goods, we take a South African stand at many international trade events and have South African businesses marketing themselves at these events.
Fourthly, the government has made it easier for businesses to be established in South Africa. Through our companies office we have reduced the time and complexity of registering and starting a business.
Fifthly, we are trying to improve the availability of finance for businesses. We are aware of the difficulties that businesses face in trying to get loan finance from the banks and are looking for new ways to ensure that legitimate businesses with bankable projects get access to finance so that they can successfully start their enterprise. We have established Khula to provide guarantees or collateral for your business loans, however, the banks have informed us that they will only consider viable business plans and viable business ideas when they loan money - with or without the Khula guarantee.
Sixthly, we are working very hard to improve the business environment, for example, we play a role in ensuring that the economy is growing, that new investors are brought into the country with new investments, and that existing firms are encouraged to reinvest in South Africa.
Lastly, we have embarked on a programme of Broad Based Black Economic Empowerment. This BEE programme is looking at empowering ordinary black business people. This will see empowerment taking place through:
* Public and private sector procurement
A large part of the government's BEE policy is to push big companies to buy more of their goods and services from black owned and run businesses. The large million rand deals that you read about in the papers will only affect a few people and this is only one part of our BEE strategy. Unfortunately it is this part of BEE that is most exciting for the newspapers. The successes that we see in black owned small businesses when they win contracts from the private sector as well as government are very important but they do not make the papers because it is ordinary people. It is these people who are becoming successful through our black economic empowerment programme.
* An increase in the black ownership and management of large enterprises in South Africa in certain sectors of the economy
It is important for the government that the BEE strategy does not only focus on the ownership of enterprises but also on the number of black people at a managerial level. This will give opportunities to young black graduates to go into the corporate sector and work for these large enterprises. As part of this we want to see an increase in the number of young people who are developed in technical and professional skills.
* Beneficiation of raw materials
South Africa has abundant natural resources and part of our BEE strategy is to ensure that more black businesses will become involved in processing and adding value to these raw materials. Not only will this promote BEE but it will be an excellent strategy to grow our economy and create new enterprises.
* Enterprise development
The Broad Based Black Economic Empowerment Strategy also encourages the development of black owned small businesses. This fits into the government's broader strategy that I have already mentioned.
Our biggest challenge is to see that that more black people start businesses and become successful in these enterprises. There is a study conducted on entrepreneurship across the world, including South Africa. This study shows us two important things about South Africa; firstly, that South Africa has half the number of entrepreneurs than we should have for a country of our size and economic status. Secondly it shows us that in South Africa you are more likely to be successful in a small business if you are already in business. Why this is important is that it shows us we have a lot of space in our economy for new businesses and also that if you are already in business you have the skills to succeed and should be looking at starting a second or third business, possibly in a different sector where there are lots of new opportunities.
We need to see more black businesses being started in the manufacturing sector to take advantage of the government procurement policies. Black businesses in the manufacturing sector also have opportunities that are being created by the new investors that have come into the country as they are looking for suppliers, as are the big businesses that need to start buying from black businesses as part of their BEE programme. There are also opportunities for black businesses to take advantage of the prospects that have been created in international markets. As Deputy Minister of Trade and Industry I am invited to speak at forums and events all over the country. The message that I give at many of these events is that the role of government is to support small businesses and not create them. Sometimes this role is confused, we are a facilitator and a supporter of enterprises and we have established a number of ways to assist SMMEs but it is the hard work of entrepreneurs themselves and the commitment to making their business work that is most important and is what will create jobs. Remember that in your businesses you are employing mothers and fathers who need to provide for their families, young adults who need to look after their parents and grandparents. It is you who are the backbone of our economy.
Programme director, ladies and gentlemen, since 1994 the situation in our country has changed dramatically for businesses; today there are more opportunities than ever before in our country, particularly for black people. One of the aims of our government is to see that as many people as possible are given the opportunities that they were denied in the past. When we speak of Broad Based Black Economic Empowerment we are looking at giving you, the small business owner, the entrepreneur who lives in the township an opportunity to become a successful enterprise.
Programme director, to conclude, today I have outlined the government's broad approach to assisting small businesses in South Africa by putting the right environment and support measures in place but I have also given you as entrepreneurs and businesspeople in this community some of the responsibility. You need to look at where you come from, look at your history and see how you can use the changes that have taken place in this country to your and your community's advantage.
To end I would like to reinforce the message that the government is committed to Alexandra. Through the Alex renewal project we are seeing millions of rands being put into developing this township. The question that I ask of you today is what are you doing to grow the economy of this township? What are you doing to turn Alexandra Township into a suburb of Johannesburg, with a strong and vibrant business area?
I thank you.
Issued by the Office of the Deputy Minister of Trade and Industry, 21 August 2003
Source: Deputy Ministry of Trade and Industry
Title: Hendricks: Opening address at Alexandra seminar on small businesses
OPENING ADDRESS AT THE ALEXANDRA SEMINAR ON SMALL BUSINESSES BY THE DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, East Bank Hall (Alexandra), 21 August 2003
The honourable mayor of Alex in absentia,
Obed Bapela, MP
MPs and MPL
Honoured Guests
Entrepreneurs
Ladies and gentlemen
Thank you for inviting me to share with you what we can do together to make ours a winning nation.
Let me at the outset congratulate the organisers of this event and your member of parliament for putting up such an exciting programme because unless we take charge of our destiny no one will do it for us that is why I am here today to ensure I am part of a success story, the Alexandra success story.
Alexandra township was a centre of resistance against apartheid tyranny; from the 1940s to the 1980s, the people of Alex said no to apartheid, they did this through demonstrations, protests, bus boycotts and many other public campaigns, but the result was more repression. Many of the challenges that face the people of Alex today are as a result of the apartheid past.
The first challenge is that the residents of this area were dispossessed of their land and were not given the opportunity to own their own property. Today this negatively affects the asset base that people have, which in turn limits their access to resources. This becomes a problem when people want to apply for loans from the bank and do not have collateral. Some of the solutions that we as government have put in place through Khula are aimed at assisting SMMEs to overcome this problem of lack of collateral.
Another challenge is that the overcrowding in Alex still persists, this has negative social consequences and we still have people living in poverty, which further limits their ability to accumulate material wealth. For entrepreneurs, there is a positive aspect of having a large number of people living in your area - you have a large market in close proximity for your goods and services. The challenge is to increase the income levels for the residents of Alex and to ensure that your goods and services are good enough so that the money is spent on your enterprises and not at a business in another area.
The third challenge is that the neglect of the area by local government under apartheid has meant that inadequate council services were provided to this township. The impact of this is that businesses often do not have the proper infrastructure in which to operate, however, through the Alexandra regeneration programme, not only will this infrastructure be provided but opportunities will be created for businesses that can supply the equipment, services and skills that will be required for this upgrade.
Fourthly, residents in this area have had very limited exposure to running their own businesses and they have in the past been labourers and employees in companies. The impact of this is that many do not have entrepreneurial skills, however, there are many, many people in Alex that have practical and technical skills that can be used in business.
Whilst all the above presents major challenges, Alexandra holds the potential for a very bright future. The people of Alex could ignore this potential and the opportunities that have been created. You could look at the negative aspects of what is happening in the township and not see any hope in the situation that you find yourselves in. But if you look at the situation differently, find out what is being done to assist businesses - you will see that a lot is being done by the government to create an environment in which businesses and entrepreneurs can flourish.
Let me tell you what we as the government are doing to support small businesses.
Firstly, we are trying to empower businesses in South Africa by establishing and subsidising business support centres, these centres, many of which are supported by Ntsika, the government agency that provides not financial support services, help businesses by offering training, advice, and information, as well as by helping them to find business opportunities and tender for government contracts. There are also government agencies and programmes that help businesses improve the quality of their products so that they meet international standards for example, NAMAC, CSIR, SABS, and SAQI. To explain more of what government, the Department of Trade and Industry and its agencies can offer businesses you can call our customer care number on 0861 843 384 to get more information. You will hear more about these institutions during today's presentations.
Secondly, the government has been very active in negotiating international trade agreements and working closely with other countries to promote good relationships and promote peace and stability across the world. While our activities in this area are very far removed from what you are doing they have the potential to have a big impact on your businesses and the opportunities that you are able to access. For example, our trade agreements and trade relationships allow the goods that are produced in South Africa to be sold in other countries at far more favourable terms than would have been the case and we see many international trade delegations coming through to South Africa to find opportunities and to trade with South African businesses.
Thirdly, the government is helping South African businesses to export. We are subsidizing the costs of South African businesses to travel to other countries to market their products and goods, we take a South African stand at many international trade events and have South African businesses marketing themselves at these events.
Fourthly, the government has made it easier for businesses to be established in South Africa. Through our companies office we have reduced the time and complexity of registering and starting a business.
Fifthly, we are trying to improve the availability of finance for businesses. We are aware of the difficulties that businesses face in trying to get loan finance from the banks and are looking for new ways to ensure that legitimate businesses with bankable projects get access to finance so that they can successfully start their enterprise. We have established Khula to provide guarantees or collateral for your business loans, however, the banks have informed us that they will only consider viable business plans and viable business ideas when they loan money - with or without the Khula guarantee.
Sixthly, we are working very hard to improve the business environment, for example, we play a role in ensuring that the economy is growing, that new investors are brought into the country with new investments, and that existing firms are encouraged to reinvest in South Africa.
Lastly, we have embarked on a programme of Broad Based Black Economic Empowerment. This BEE programme is looking at empowering ordinary black business people. This will see empowerment taking place through:
* Public and private sector procurement
A large part of the government's BEE policy is to push big companies to buy more of their goods and services from black owned and run businesses. The large million rand deals that you read about in the papers will only affect a few people and this is only one part of our BEE strategy. Unfortunately it is this part of BEE that is most exciting for the newspapers. The successes that we see in black owned small businesses when they win contracts from the private sector as well as government are very important but they do not make the papers because it is ordinary people. It is these people who are becoming successful through our black economic empowerment programme.
* An increase in the black ownership and management of large enterprises in South Africa in certain sectors of the economy
It is important for the government that the BEE strategy does not only focus on the ownership of enterprises but also on the number of black people at a managerial level. This will give opportunities to young black graduates to go into the corporate sector and work for these large enterprises. As part of this we want to see an increase in the number of young people who are developed in technical and professional skills.
* Beneficiation of raw materials
South Africa has abundant natural resources and part of our BEE strategy is to ensure that more black businesses will become involved in processing and adding value to these raw materials. Not only will this promote BEE but it will be an excellent strategy to grow our economy and create new enterprises.
* Enterprise development
The Broad Based Black Economic Empowerment Strategy also encourages the development of black owned small businesses. This fits into the government's broader strategy that I have already mentioned.
Our biggest challenge is to see that that more black people start businesses and become successful in these enterprises. There is a study conducted on entrepreneurship across the world, including South Africa. This study shows us two important things about South Africa; firstly, that South Africa has half the number of entrepreneurs than we should have for a country of our size and economic status. Secondly it shows us that in South Africa you are more likely to be successful in a small business if you are already in business. Why this is important is that it shows us we have a lot of space in our economy for new businesses and also that if you are already in business you have the skills to succeed and should be looking at starting a second or third business, possibly in a different sector where there are lots of new opportunities.
We need to see more black businesses being started in the manufacturing sector to take advantage of the government procurement policies. Black businesses in the manufacturing sector also have opportunities that are being created by the new investors that have come into the country as they are looking for suppliers, as are the big businesses that need to start buying from black businesses as part of their BEE programme. There are also opportunities for black businesses to take advantage of the prospects that have been created in international markets. As Deputy Minister of Trade and Industry I am invited to speak at forums and events all over the country. The message that I give at many of these events is that the role of government is to support small businesses and not create them. Sometimes this role is confused, we are a facilitator and a supporter of enterprises and we have established a number of ways to assist SMMEs but it is the hard work of entrepreneurs themselves and the commitment to making their business work that is most important and is what will create jobs. Remember that in your businesses you are employing mothers and fathers who need to provide for their families, young adults who need to look after their parents and grandparents. It is you who are the backbone of our economy.
Programme director, ladies and gentlemen, since 1994 the situation in our country has changed dramatically for businesses; today there are more opportunities than ever before in our country, particularly for black people. One of the aims of our government is to see that as many people as possible are given the opportunities that they were denied in the past. When we speak of Broad Based Black Economic Empowerment we are looking at giving you, the small business owner, the entrepreneur who lives in the township an opportunity to become a successful enterprise.
Programme director, to conclude, today I have outlined the government's broad approach to assisting small businesses in South Africa by putting the right environment and support measures in place but I have also given you as entrepreneurs and businesspeople in this community some of the responsibility. You need to look at where you come from, look at your history and see how you can use the changes that have taken place in this country to your and your community's advantage.
To end I would like to reinforce the message that the government is committed to Alexandra. Through the Alex renewal project we are seeing millions of rands being put into developing this township. The question that I ask of you today is what are you doing to grow the economy of this township? What are you doing to turn Alexandra Township into a suburb of Johannesburg, with a strong and vibrant business area?
I thank you.
Issued by the Office of the Deputy Minister of Trade and Industry, 21 August 2003
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