Zuma: New procurement law will grow black business

Cape Town – The buying power of government is a “powerful tool” to advance black economic empowerment, said President Jacob Zuma. 

Speaking at a dinner honouring black business pioneers who excelled at doing business in the apartheid era, Zuma said through the public sector procurement system, government spends close to R500bn on goods and services and construction works alone. 

“[This buying power of the state] can and must be used to advance black economic empowerment,” Zuma said at the event hosted at the Sandton Convention Centre. 

The President reiterated that the current Preferential Procurement Policy Framework Act (PPPFA) will be repealed and replaced by new public procurement legislation that will rectify the skewed ownership and control of the South African economy. 

Finance Minister Pravin Gordhan said in his medium-term budget speech on Wednesday that a new Public Procurement Bill is currently in the making and will serve before Cabinet before April next year. 

READ: New law to boost BEE business

Zuma reiterated that government is now determined to introduce a more flexible preferential procurement framework that is responsive to government’s objectives to grow black business.

While the new procurement legislation is going through the different government stakeholder engagement processes before being tabled in Parliament, government is working on regulations that ill improve the current PPPFA to make them more responsive to economic transformation imperatives, Zuma said. 

“One of the key deliverables will be the 30% set asides for small businesses, which will be compulsory for all big contracts.” 

At the dinner, attended by members of the Black Business Council (BBC), Business Unity South Africa (Busa) and National African Federated Chamber of Commerce (Nafcoc) among others, Zuma said 22 black industrialists projects have been approved since the inception of the new Black Industrialists Programme, launched by the Department of Trade and Industry earlier this year. 

The approved projects are expected to yield over 1 000 direct jobs and amount to R1.2bn. 

Zuma added that government would like to see the revival of the township economy. “Those corner shops that made many of our big name pioneers must be revived and supported.” 

READ: Another step in Gauteng township economy revitalisation

In the early 1960s and 1970s, he said, during a difficult period of repression, black business people couldn’t set up businesses in towns but were limited to black townships. 

“This was when the famous township corner shops or general dealers came into being and they became an important feature of our lives,” Zuma said. 

Apart from supporting small businesses, it is also important for government to support informal traders, who most of the time “fall foul” of municipal bylaws and regulations. 

“We need to find a way to help them earn a living, while also respecting municipal regulations,” Zuma added. 

This includes registering informal traders, as government cannot allow the “mushrooming” of businesses without knowing who the traders are, “including those from neighbouring sister countries on the continent and beyond,” Zuma said. 

“This is one of the key projects of our Inter-Ministerial Committee on Migration.” 

The Committee was established in April last year to deal with all the underlying causes of the tensions between communities and the foreign nationals, following xenophobic attacks on the small business owners from neighbouring countries.