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Date
: 18/04/2006
Source: Gauteng Provincial Government
Title: Shilowa: Launch of Gauteng BBBEE Strategy
Address by Premier Mbhazima Shilowa at the Gauteng BBBEE
Strategy launch
Members of the Executive Council
Local government leaders
Heads of Departments and Agencies
Stakeholder representatives
Distinguished guests
Ladies and gentlemen
Today’s launch of the Gauteng Government’s strategy on
broad-based black economic empowerment (BBBEE) is the result of a
commitment we made in 2004, as part of our five year programme, to
address the marginalisation and exclusion from the economy of black
people, women and people with disabilities.
While Gauteng is seen as the country’s wealthiest province,
with a growing economy and declining unemployment, we continue to
bear apartheid’s legacy of unacceptably high levels of
inequality, poverty and unemployment.
As we know, this is the direct result of the past’s
deliberate policies of exclusion of black people from access to
ownership, management and control of the economy. Black people were
condemned to be, as illustrated by the words of apartheid architect
Hendrik Verwoerd, “hewers of wood and drawers of
water”.
Our struggle for freedom was not just about winning political
rights including the right to vote and participate in the formal
institutions of democracy; it was also about socio-economic rights
and access to the commanding heights of the economy by the majority
of our people.
Since 1994 our democratic government has put in place a wide range
of measures which have significantly improved black people’s
participation, not just in political democracy, but in meaningful
economic activity as well. However, this needs to be dramatically
accelerated and expanded if we are to enable the people to share in
the country’s wealth and fulfil our vision of equality,
non-racialism, non-sexism and prosperity for all.
If we are to achieve our developmental objectives and ensure that
all our people reap the fruits of democracy, we therefore need to
extend the gains we have made in the political sphere into the
realm of the economy.
To this end, we last year adopted a Gauteng Growth and Development
Strategy (GGDS) which, together with our strategy to build Gauteng
as a globally competitive city region, aims to stimulate shared
growth in the province to eight percent by 2014. The aim is to
build on the economic successes the province has achieved so far,
including a decline in unemployment from 30,4% in September 2001 to
22,8 in September 2005, and ensure that we are able to contribute
effectively to meeting our national targets of halving poverty and
unemployment by 2014.
Our Growth and Development Strategy identifies BBBEE as a critical
mechanism to achieve our objectives, particularly in making sure
more of our people, especially the poor and marginalised, women,
youth and people with disabilities, become active participants in
economic activity.
The creation of more and quality job opportunities for black people
is an important objective of both our GDS and our BBBEE strategy.
However, we would not be doing justice to our economic objectives
if we were satisfied for the majority to remain excluded and
marginalised, perpetual servants at the lower echelons of the
economy.
As our strategy indicates, BBBEE is an integrated coherent
socio-economic strategy that directly contributes to South
Africa’s economic transformation and brings about significant
increases in the number of black people that manage, own and
control the country’s economy and significant decreases in
income inequalities.
BBBEE has been widely debated over the past few years, with some
critics attempting to discredit it as a strategy to benefit only
the so-called black elite. It is therefore important to set the
record straight once again that in line with the BBBEE Act, the
beneficiaries of BBBEE must be all black people, including women,
workers, youth, people with disabilities and people living in rural
areas. It also includes:
* facilitating ownership and management of enterprises and
productive assets by communities, workers, cooperatives and other
collective enterprises;
* human resources and skills development;
* achieving equitable representation in all occupational categories
and levels in the workforce;
* preferential procurement; and * investment in enterprises that
are owned or managed by black people.
The debate on the most effective way to achieve BBBEE objectives is
an important one. However, there are some amongst the critics of
BBBEE that must be dismissed as thinly disguised proponents of
Verwoerdian ideology. For them, black people should not aspire to
rise above their particular “station in life” as
“hewers of wood and drawers of water”. They object to
the accumulation of wealth by black people but have never
criticised the concentration of wealth in the hands of a minority.
Others would like to see government taking a hands-off approach in
the belief that the market will correct the historical imbalances.
While the market does have a role to play, direct state
intervention is required to ensure speedy, effective and
thoroughgoing economic empowerment and shared economic
growth.
The objective of BBBEE is to effect transformation and ensure the
redistribution of the country’s wealth, as well as address
the inequalities and distortions caused by years of apartheid. But
it is important to note that BBBEE is also a fundamental
requirement of stimulating economic development and shared
growth.
The state has a responsibility and a clear mandate to use its
considerable financial muscle to promote growth in the economy and
reduce poverty and unemployment, in this particular case through
the mechanism of BBBEE.
As I have indicated in the past, we need to send a clear message
that the time for white monopoly capital to pay lip service to
economic transformation and empowerment, especially for women, is
past and will not be rewarded in Gauteng.
Last year we announced that our strategy would ensure that, by
2009, up to 70% of government procurement would be done through
broad-based black economically empowered companies and also
addressed the issue of support for small and emerging enterprises
and compliance with BEE charters.
Today I am pleased to announce that, after extensive work and
consultations within the provincial government and with our
stakeholders, we are now in a position to launch our broad-based
black economic empowerment strategy which is in line with the
commitments I have made.
An implementation plan has been developed and the strategy will
come into effect in the Gauteng Provincial Government (GPG) as from
July 2006. In the meantime, we will put in place the baselines and
ensure that all Departments have the necessary systems in place to
ensure the effective implementation of the strategy including
reporting, monitoring and evaluation of its impact. The GPG BBBEE
strategy gives effect to the BBBEE Act of 2003 and other national
policy and legislation on this issue, including the Constitution,
the Employment Equity Act, the Preferential Procurement Policy
Framework Act and Public Private Partnership Guidelines.
The strategy integrates existing GPG initiatives into a coherent
province-wide framework. It is binding on all GPG departments and
their agencies and will be incorporated into the performance
contracts of the relevant senior managers. It also provides a guide
for municipalities in Gauteng, who have committed themselves to
developing and implementing BBBEE at local government level.
The strategy utilises a variety of mechanisms to realise its
objectives, including preferential procurement, enterprise
development, and employment equity and skills development and
prescribes a minimum set of standards and targets to be observed. I
will outline some of the key areas in which we will
intervene.
Preferential procurement
All GPG departments and agencies will apply a preferential
procurement policy when procuring all goods and services. The
target to be achieved in 2009 includes 70% of total GPG procurement
from BBBEE enterprises with equitable gender participation. In
order to make government tenders more accessible, we will also pay
attention to simplifying tender specifications, improving access to
tender documents and facilitating easy procurement for SMMEs.
We are well aware that SMMEs have experienced difficulties in doing
work for government as they are not paid timeously. To address
these cash flow pressures and make it more viable for SMMEs to do
government work, we are committed to ensure that micro and small
suppliers are paid within 15 days upon receipt of all the relevant
documentation.
Restructuring, PPPs and licensing
The restructuring of any assets, public-private partnerships (PPPs)
and the issuing of licences, including casinos, horse racing and
liquor will be guided by BBBEE imperatives.
Enterprise development
To strengthen SMMEs and ensure that more SMMEs are able to tender
for GPG work, we will also pay attention to enterprise development,
particularly through the Gauteng Enterprise Propellor (GEP), which
provides support to SMMEs.
The strategy outlines a range of interventions in enterprise
development including the adjustment of procurement practices to
enhance the growth of small enterprises. The preferential
procurement policy also sets targets for small enterprises, micro
enterprises and cooperatives.
The strategy commits us to approach small business development and
BBBEE in an integrated manner in line with the national strategy
and we will seek partnership with national, provincial and local
institutions on this matter.
Where GPG makes substantial capital and infrastructure investments,
the private sector will be expected to establish enterprise
development capacity.
Human Resource Development (HRD)
Access to education and skills development are key factors in
determining economic empowerment and in driving economic growth.
The strategy sets targets for employment equity and skills
development for our own employees and also addresses the Gauteng
wide HRD strategy.
The BBBEE strategy commits us to ensure that, by 2009 we have 80%
black people and 50% black women in management positions.
Local economic development
In terms of the strategy, municipal procurement spend, access to
social infrastructure, property management and local economic
development initiatives will play a key role in altering the
landscape of inequality across the province. Through local economic
development and in partnership with municipalities, the GPG aims to
increase the asset base of black people while enhancing the
economic competitiveness and generating development in local
areas.
Social and economic infrastructure
Access to social infrastructure is a necessary foundation for
meaningful participation in economic, social and political
activity. Our aim is therefore to establish integrated and
productive communities where economic activity is facilitated
through the provision of social amenities including education,
health, housing and transport infrastructure. Infrastructure
development will catalyse growth in targeted economic sectors and
enable people to more effectively access economic
opportunities.
Property ownership
Black people have historically been denied access to productive
land, leading to vast gender and racial inequalities in property
ownership. This severely restricted black people’s ability to
create and accumulate wealth, which in turn impacted negatively on
the economic potential of the country, black people and black women
in particular.
The strategy outlines a range of interventions to change the skewed
land ownership, including unlocking obstacles to property ownership
in underdeveloped areas, particularly access to title deeds,
formalisation of tenure and land use rights.
Investment in targeted economic sectors
In line with the Gauteng Growth and Development Strategy, sector
growth plans will deliberately leverage and promote BBBEE
participation, small, medium and micro enterprise (SMME)
development and job creation within key sectors.
The BBBEE strategy identifies a range of sector initiatives
including in information and communications technology (ICT);
pharmaceuticals; metals fabrication; automotive; infrastructure,
transport and construction; the film sector, tourism and
agriculture.
Our economic growth strategies will, amongst others, increase fixed
investment in areas with economic potential and direct capital
investment in under-resourced areas. Incentives for investors in
the province with BBBEE and SMME participation, especially in
under-resourced areas, will also be considered.
Finally, it is clear that ensuring the effective participation of
the majority of South Africans in the economy cannot be achieved by
the actions of government alone. The strategy therefore outlines
the roles and responsibilities of different social sectors,
including business and civil society, in the achievement of BBBEE
in Gauteng. The private sector, in particular, has a central role
to play, including through the implementation of sector
transformation charters, where these exist and the DTI codes of
good practice on BBBEE where charters are not in place.
We expect enterprises contracting with GPG to exceed the targets
and qualitative undertakings prescribed in the charters and generic
scorecard. In addition, the private sector has a role to play in
supporting the growth of small, micro and cooperative enterprises
through enterprise development programmes in partnership with GPG
as well as in designing innovative financing options to address
development objectives including in housing, health and
infrastructure.
Civil society in turn needs to mobilise, organise and position
itself to more effectively participate in and benefit from the
measures being introduced, including improving the capacity of
community based organisations and non-governmental organisations
(NGOs) and promoting dialogue and active engagement with business
and government on community requirements on social infrastructure
and local economic development.
Today we have reached an important milestone in Gauteng in
realising the vision of the Freedom Charter and in building a truly
democratic, non-racial, non-sexist and prosperous South Africa. It
can only be a success if all of us, government senior managers and
staff, business, labour and communities, organisations and
individuals make an effective contribution. Let us all put shoulder
to the wheel to make it a success.
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