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Giving the black SMME and Coops  sectors more hitting power Giving the black SMME and Coops  sectors more hitting power

Giving the black SMME and Coops sectors more hitting power - PowerPoint Presentation

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Giving the black SMME and Coops sectors more hitting power - PPT Presentation

Presentation by Dr Thami Mazwai to the NW session of the NPC dialogues March 1 2017 Reality of our times The majority lives in the townships and rural areas and these are the least developed areas in South Africa They are a result of the Apartheid past which was ID: 560712

million business big discussion business million discussion big local strategies spend areas rural small entrepreneurship black services developed townships

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Slide1

Giving the black SMME and Coops sectors more hitting power

Presentation by Dr Thami Mazwai,

to the NW session of the NPC dialogues March 1 2017Slide2

Reality of our times

The majority lives in the townships and rural areas and these are the least developed areas in South Africa. They are a result of the Apartheid past which was:

Horizontal discrimination in which Blacks are not allowed to be in industrial and commercial areas except as labour; and

Vertical discrimination in in which blacks could not be in certain professions, trades and occupations. Slide3

New initiatives old architecture

The New Order came with new initiatives but these were simply integrated into old communities.

The past has perpetuated itself. Slide4

Old order perpetuated itself in democracy

The race based spatial divisions continued and as markets for the already entrenched. Thabo Mbeki spoke of the two economies in one country and said the developed one must assist the underdeveloped one. But trickle down economics of neo liberalism did not work.

For instance, there was no strategy on the shopping malls. Hence the missing middle. Worse still, immigrant entrepreneurs control more than 50% of trade in townships and rural areasSlide5

A comparative face of SMME sector

An ideal business pyramid

Big business

Mid size

Small, formal and

informal

The businesses pyramid in RSA

Big business

Medium

Small and informal spread

BBSlide6

Current state of small business

Turnover level formal business

Percentage in range

R1 to R

1

million

83%

R1 million

to

R5 million

9.46%

R5 million

to R10 million

4.1%R10 million to R50 million3.9%

R50 million +1.4%Slide7

Current state of small business

About 40% of entities have turnovers, NOT PROFIT, of less than R70000 per annum, meaning less than R6000 per month

About 20% have turnovers of less than R25000 per annum, meaning less than R2000 per month. The bulk of these are womenSlide8

Five underlying realities in the environment

Highly concentrated economy

South Africa’s macro culture

Bureaucracy and its conception of small business

Meat in the sandwich between big business and big labour

Local politicians and LED or CDSlide9

The challenge

The NDP exhorts 11 million jobs to have been created by 2030, and 90% from small business sector. Creating these jobs means driving self employment as you develop the small businesses or coops. It also means commodifying the ordinary lives of people so that they make a living. Slide10

The issues for discussion

The main issue is: “Strategies to trap and grow local spend in the localities and reduce the leakage of money to developed areas”.

Soweto spend in 2008

Khayelitsha spend

Consumption in rural areas Hluhluwe and honey

Hluhluwe and funeral undertakerSlide11

The premise of entrepreneurshipSlide12

Issues for discussion

Strategies stimulate indigenous entrepreneurship through local spend and retaining money in local ecosystem

The domination of local markets by traditional big business and immigrant entrepreneurs. How do you break this grip;

The low levels of entrepreneurship activity in the Black African communitySlide13

What are Government’s weapons?

National, provincial and municipal policies

LED and IDP strategies

National, provincial and municipal programmes

National, provincial and municipal spend e.g. feeding schemes for schools, hospitals, correctional services and SANDF

Laundry services for hospitals, correctional services and army

Infrastructure projects

remove focus from big suppliers and concentrate on township and rural entities as suppliers with ESD linked to it. They also did it”Slide14

The realities must determine the strategy

The identification of production units, assessing their potential and relating them to spending by the Government India and bakeries;

The creation of value chains within communities fuelled by the identification of these production units;

Strategies to graduate informal and micro enterprises into the mainstream – e.g. Jozi at work;

The cultivation of linkages between SMMEs, infrastructure rollout and industry; and

ED programmes for these entities to deal with their self esteem

(“

The above is not exhaustive but address the immediate

”)Slide15

Discussing township and rural economies

Issues for discussion continued:

Mutually beneficial relations between local and big business;

The effectiveness of IDPs and other government initiatives, including officials and town council members;

The effectiveness of local chambers of commerce and/or associations; and

Strategies to measure successful entrepreneurship and relationsSlide16

The main issue for discussion

The main issue for discussion is the recall of Steve Bantu Biko

How do we change the black mind

White business is thriving in the townships because the black person does not believe himself to be capable of creating business empires. He does not believe that blacks can create quality

How do we change this?

This is the basis of the summitSlide17

End of presentation

Discussion, discussion

and discussion

Dates and venues for the dialogues