President Jacob Zuma remains positive that the new regulations under the Preferential Procurement Act, which come into effect in December, will help government meet its job creation targets.
Zuma told the New Age business breakfast in Cape Town on Tuesday morning that the changes in the Act will increase government's commitment to buying local goods in order to stimulate employment and production.
A social accord supporting this move was announced by Economic Development Minister Ebrahim Patel on Monday. Patel said the accord commits government, labour as well as the business sector to increasing the country’s target of procuring locally manufactured goods to 75%.
On Tuesday, Zuma told the gathering - attended by Western Cape Premier Helen Zille, among others - that government had realised the need to ensure the country’s youth were employable through training.
“We are encouraged by the support we get from labour and business in this regard,” Zuma said.
He emphasised the importance of small business enterprises in boosting the country’s economy and realising government’s ambitious plan of creating five million new jobs by 2020.
Government aims to create five million jobs by 2020 through a new growth trajectory by increasing investment in infrastructure development, sectors such as manufacturing and the so-called green economy. It proposes measures to address the rand’s strength and loose monetary policy.
“During this negative economic climate, many retrenched workers will try to start small businesses to survive. Many of these startup businesses will be of the survivalist type and need the support of both big business and government.
“Adequate training in business skills and mentoring are critical factors for success in small enterprises. We urge big business to provide that mentoring support, as it will be helpful to the economy in the long run.”
Government has a number of programmes on small business development, skills training and enterprise support services, while policies that will assist small businesses in financial distress are provided for in the new Companies Act.
“The provision will help to ensure that SMMEs in distress are saved before they reach a stage of insolvency and ultimate liquidation. From government's side, we are also tackling the failure to pay suppliers on time, which affects SMMEs negatively.
“We have sent out an unambiguous message to directors-general of government departments to take personal responsibility for this anomaly as accounting officers. We expect regular reports from them on progress made to pay suppliers, which should be done within one month of services or goods being delivered.”
Zuma added that South Africa’s participation in forums such as Brics, India-Brazil-South Africa Forum and the G20 provide platforms for promoting the “African agenda”, suggesting that this could help mainstream the continent’s economy.
The G20 leaders’ meeting in France this week is expected to discuss the global economic situation, reforming the International Monetary System and improving global governance.