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
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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