Black-owned business need buy-in

Long before the Black Business Forum (BBF) was launched, we had to ask ourselves difficult questions.

Should black African businesses not be supported by the whole-of-government and the private sector? What are the ways and means to attract black clientele to patronise black business?

The newly-launched BBF is an Eastern Cape non-profit company founded to address the constraints that many black-owned businesses face in growing their businesses and participating in the mainstream economy.

These constraints include, among others, barriers to business entry, collusion by established companies, the limited access to competitive markets, the growing use by government of companies from other provinces and preference of white-owned companies over black-owned companies.

As a consequence of the above, some black-owned businesses or products do not meet the required quality standards and lack the management skills to operate growing enterprises.

For these enterprises to improve their competitiveness, they need to upgrade their managerial capabilities, invest in market development and quality improvement programmes. To achieve these they require both focused financial support and business mentoring.

An inward looking assessment will show that our biggest challenge is ourselves – we do not support each other.

This lack of support for black businesses appears to come from both black consumers and other black businesses who believe that our service standards and quality are below minimum. These issues must be addressed and black business should open itself to outside help from established white business and foreign nationals.

Big business has an obligation to help small businesses to achieve sustainability and growth that is vital for both the development of industries and corporations. Small businesses are critical for job creation, improving living standards, raising productivity and achieving inclusive economic growth and social cohesion.

On the other end of the spectrum government must give impetus to transformation and package enabling economic policies, provide grants and funding and, most importantly, ensure procurement of goods and services to benefit black African businesses.

We lost our gravity in township and rural areas when foreign traders started doing business in our communities. Faced by the new reality, we continued bickering among ourselves and fighting over crumbs until it dawned on us that we need to think black, buy black and support black.

And the support of the black middle class is much-needed for us to sustain our communities.

Black African businesses in the Eastern Cape are faced with an avalanche of challenges as captured in a study conducted by Beever Agency in 2014. The study, led by Dumisani Mpafa, is still relevant today judging by the issues it pointed out and these include:

lCommon challenges: poor business infrastructure, highly informal, lack of skills, lack of markets, government programmes non-responsive to township entrepreneurs, dynamic socioeconomic factors, unemployment;

lProliferation of foreign nationals retail outlets in townships and informal settlements; and

lUncoordinated government interventions (urban renewal programmes/township economy).

We believe that the idea of the BBF has come and there are no amount of challenges that can stand in the way of assisting black business.

We are inspired by premier Phumulo Masualle when he pointed out during his State of the Province speech: “Our government remains firmly committed to 30-day payment of suppliers, 30 percent local procurement and labour sourcing for projects, as well as 50% localisation.

“Accordingly, the procuring of goods and services will not only be at the lowest possible price, but will consider promotion of local economic development.”

It is therefore our responsibility to ensure that this is implemented, so is the promise that provincial government will, out of its R50-billion spend on goods and services, ensure that 50% goes towards local businesses.

The revitalisation of the township and rural economy in the Eastern Cape to create sustainable jobs, reduce inequality and defeat poverty must be propelled through bias procurement and enterprise development programme plus innovative business models.

In a time of a downgrade and recession, the revitalisation of township and rural economies can spur and influence the performance of the Eastern Cape economy as a game-changer.

Township and rural development and upgrading of the infrastructure and political will hold the key to turning around the economy.

The BBF, together with Nafcoc and BMF, wants to enter into a new socioeconomic contract with the whole-of-government and private sector in the Eastern Cape and propel the following:

lAdhrence to 50% localisation and 30% and more local procurement;

lGovernment to spend extra on development of black suppliers;

lAll suppiers must be paid within the stipulated 30 days with consequences for failure to adhere to policy;

lEngage private sector to heighten enterprise and supplier development programmes;

lDo away with the belief that awarding a contract to a black-owned company is a risk instead both must invest in black emerging businesses;

lAdopt a strategic sourcing and set asides as government policy;

lSpend analysis must be undertaken with the view to identify risks (rand flight, localisation etc);

lDevelopment funds for contract start-up/establishment must be availed;

lTargeted contractor development programme for black-owned businesses must be developed;

lThe rotation system for suppliers must be tightened; and

lRevitalise the township and rural economy, through supplier programme mobilisation per economic sector and sourcing by the state from these suppliers.

Black business in the Eastern Cape is tired of standing at the touchlines to witness a game that they should be playing. They want to do things for themselves and all by themselves.

Luthando Bara is an entrepreneur and a founding member of the BBF. He writes in his personal capacity.