Treasury has power to boost transformation - BBC

Johannesburg – The minister of finance has the power to give state-owned enterprises (SOE) the right to waive certain procurement requirements to make big projects accessible to black businesses.

This is according to President of the Black Business Council (BBC) Danisa Baloyi. During a telephonic interview with Fin24, Baloyi explained that there are hurdles in the Preferential Procurement Policy Framework Act (PPPFA) that hold black businesses back.

“The outcomes of the PPPFA meant well, but they are not working,” said Baloyi. “Legislation makes it impossible for black businesses to proceed.”

Using an example of having to race against Olympic athletes Caster Semenya or Wayde van Niekerk, Baloyi said she would never win against them because she does not practice as much as they do, nor does she have their abilities.

In the same way, small businesses have to compete with established businesses in procurement processes. These small businesses “will never succeed” to outbid these established businesses, she said.

Before black businesses can participate in procurement, the “hurdles” - which include the likes of financing requirements - should be removed. SOEs should also be given the flexibility by Treasury to include black businesses in procurement, she said.

Baloyi said efforts to accelerate economic transformation had regressed since the global financial crisis in 2008.

One of the levers government has used to achieve transformation is through procurement.

“Big projects don’t go to black businesses.”

She explained that allowing small black businesses to take part in big projects will allow the economic benefits to be shared throughout the value chain of the project where these businesses are involved.

She added that procurers should take risks on black businesses, if inclusive growth is ever to become a reality. Big businesses must also step up and start giving opportunities to black business, she added.

READ: Zuma: SA needs radical economic transformation

At the ANC’s recent January 8 statement, President Jacob Zuma said that economic transformation would be a priority in 2017.

“Radical economic transformation remains at the core of our economic strategy.”

“More decisive steps must and will be taken to promote greater economic inclusion and to advance ownership and control and real leadership of the economy by black people,” he said in his address.

Fin24 reported that the ANC pledged to ensure the country’s black majority secures a bigger stake in the economy.