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21/09/2017

LEVERAGING STRATEGIC PARTNERSHIPS TO REVIVE GROWTH - Ernest Mahlaule

We have now entered the final stretch of 2017, and very soon we are going to begin taking stock of all our efforts to drive change. For this edition of Business Focus, I want to share with you key highlights from our very successful annual conference held in the first week of August.

I believe that the gathering marked a turning point in the way we think about enterprise development, strategic partnerships and the direction of our economy. Judging by the quality of the discussions and input, it is clear that our conference has become the most highly anticipated event on our annual calendar since it was revived a year ago.

Once again, we had the opportunity to hear directly from Gauteng Premier David Makhura. He spoke about his efforts to build sustainable small and medium enterprises across Gauteng province. What some of us forget is that Gauteng is a strategic place to drive real change.
Well, if you did not know, Gauteng is the sixth-largest economy on the African continent. The province already contributes 35 percent to the national economy, and accounts for 8-10 percent of Africa’s gross domestic product (GDP).
These figures alone underscore the strategic importance of Johannesburg Chamber of Commerce and Industry’s (JCCI) partnership with the provincial government to foster inclusive growth and create an enabling environment for business.
Moreover, the importance of Gauteng means that every business in this province is in the enviable position to influence the direction of the national economy in real terms.
At first Premier Makhura was scheduled to attend a National Cabinet meeting on the day of our conference, August 3, 2017 but he told us that he had sent his apology so that he could spend the whole day with us.
“The economy is my number one priority, together with education and skills development for youth. I could not put forward my apology to this conference,” he said.
He applauded our conference for providing the platform to strengthen the partnership between government and the private sector.

Meaningful Engagement

Premier Makhura said his administration, “deeply appreciates the partnership with the JCCI to re-ignite inclusive growth and propel the programme for transformation, modernisation and reindustrialisation of the economy of our Gauteng City Region.
” As the voice of business across key sectors, we welcomed Premier Makhura’s input at the conference as a hopeful sign for meaningful engagement.
JCCI recognises the importance of joining hands to revitalise our economy so that we can adequately deal with our triple
challenge of unemployment, poverty and inequality.
Premier Makhura provided the clearest indication yet of his government’s commitment towards the establishment of a flourishing and sustainable base of small and medium enterprises in Gauteng.

What was even more gratifying was his insistence that small businesses needed to scale beyond just surviving on government tenders.
He said some 3 000 small businesses in Gauteng were dependent almost entirely on government for business, a development he described as untenable in the long run, since any shift in the government’s priorities could mean severe disruption for a lot of these enterprises.

Undoubtedly, this is a precarious position for any business to be in, hence JCCI’s push for a more holistic approach in the implementation of enterprise and supplier development (ESD).

As JCCI, we determined before and after the conference that there needs to be a concerted effort to help small and medium enterprises leverage opportunities across the entire value chain of whatever sector or industry they were involved in.
“I call on major private sector firms to take a lead in incubating and giving opportunities to black-owned, women-owned, youth-owned and township business opportunities in their value chains and supply chains,” Premier Makhura implored.

We agreed that the private sector needed to devise a more strategic approach to ESD so that the estimated R25 billion of ESD funding begins to yield better results.

The opportunities inherent in enterprise and supplier development are many if it is done right, this is what our speakers at the conference shared. They said both big business and emerging enterprises stood to benefit handsomely if the extent of the investments made by corporate South Africa in ESD were targeted and focused.
In my remarks at the opening of the conference, I stated that South Africa’s triple-challenge of poverty, unemployment and inequality calls for us to broaden participation in the economy.
It is for this reason that our work in the next few months will be geared towards ensuring that our efforts and those of our partners in government and civic society help us to harness our collective will to create an enabling environment for business to thrive. As business thrives, so does our economy.
We cannot continue to have a situation where small and medium enterprises are driven out of business because government is not paying them on time. And just as well, it was mentioned that we cannot continue to see big business continuously reinventing the wheel when it comes to building a sustainable base of SMMEs.

Whilst competition is an inherent part of doing business, there was an acknowledgement of the fact that business also needed to create strategic alliances that made it easier to identify processes that worked and thus be in a position to scale the interventions necessary to turn the economy around.

To do otherwise is bound to prolong the hardship faced by millions of our unemployed citizens.
The extent of the discussions and interactions at the conference also helped to underscore the need for everybody to think outside the box in view of the emerging opportunities brought on by the 4th Industrial Revolution.

New Reality

I was heartened to hear this topic being discussed at our conference, and I must point out that this is one of the many strategic areas of focus for JCCI so that we can help prepare you and your business for the journey ahead.
As Premier Makhura said, we all need to see the economic opportunity presented by our country and the rest of our continent with new eyes.

And this was also the message of His Excellency, Veiccoh Nghiwete, Namibian High Commissioner, who provided insights about the opportunities for investment and collaboration between Namibian and South African businesses.
His message of this new economic reality was echoed by Premier Makhura. I could see the surprise reaction of some in our audience when the premier put economic opportunities presented by Gauteng in context. He pointed out that nearly half (46 percent) of South Africa’s
SMMEs and 31 percent of informal businesses are located in Gauteng, right in our backyard.
Premier Makhura also shared a very important milestone: that 91 percent of the R46 billion three-year public procurement spend goes to businesses owned by historically disadvantaged individuals – blacks, women and people with disability. This represents 10, 000 out of the 12, 000 companies that do business with the provincial government.
Granted, some of these achievements go unnoticed because of other priorities but it is clear to see that there is so much that is happening in the background to transform our economic landscape.

Take for example the fact that the provincial government has increased procurement from township enterprises from R600 million to R7 billion in June 2017 – which represents 23 percent of the 30 percent target his administration set for 2019.

At a more granular level, what this means is that the number of township enterprises currently benefitting from public procurement has increased threefold from 800 in 2014 to more than 3,500 in June 2017.
All these efforts are significant, and as JCCI we applaud every step that gives greater impetus to the establishment of a sustainable SMME sector through strategic stakeholder partnerships.
Our socio-economic challenges require that we all work together for the common good of South Africa, and by extension our continent.
At our annual conference last year the provincial government and JCCI gave effect to our strategic partnership by signing a Memorandum of Understanding with the Gauteng Department of Economic Development. Some of the stated objectives of the MoU were shared at our conference by way of specific examples from some of our ongoing strategic initiatives.
I am sure that as we move forward we would look back at our two conferences as having laid a solid foundation from which to build a sustainable future, not only for ourselves, but for our country as a whole.
An invitation to you from me, is to make JCCI your voice by staying abreast of our initiatives by making this publication and the JCCI website your regular source of actionable insights about how to be part of this vast emerging economic opportunity, not only in Gauteng, but across the African continent.

We owe it to this generation to make the economy work for all. At this point let me thank everyone that participated in our conference, and together with JCCI, I wish you prosperity in all your endeavors. We are here to serve you.

Visit www.jcci.co.za for more information


Ernest Mahlaule, the Past President of the Johannesburg Chamber of Commerce and Industry

 Ernest Mahlaule, the Past President of the Johannesburg Chamber of Commerce and Industry.JPG


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