Black industrialists snag R261bn in procurement funding

Trade, Industry and Competition Minister Ebrahim Patel addresses the opening session of the second Black Industrialists and Exporters Conference. Photo: GCIS

Trade, Industry and Competition Minister Ebrahim Patel addresses the opening session of the second Black Industrialists and Exporters Conference. Photo: GCIS

Published Mar 22, 2024


By Beth Amato

More than 70 businesses at the 2024 Black Industrialists and Exporters Conference on Wednesday pledged to spend R261 billion on procurement from black industrialists over the next five years.

The spending will range across a wide range of sectors, including agro-processing, agriculture and forestry; rail; electro-technical; metal fabrication and industrial equipment; glass, plastics, household goods and marine; retail, clothing and footwear; pharmaceuticals and medical devices; information technology; and, financial services.

The government’s black industrialists programme aims to provide support and funding to industrialists, who wish to start, maintain or expand their businesses.

Speaking at the event, Trade, Industry and Competition Minister Ebrahim Patel noted that the direct turnover of companies supported by the black industrialists programme was R183bn. If indirect turnover was taken into account, the total was R330bn.

“But this is not the entire black industry universe. A lot of entrepreneurship is not underpinned by government support. The black industrialists are doing the work. There is such resilience and drive to succeed,” Patel said.

Also speaking at the conference, President Cyril Ramaphosa told delegates that while funding remained a challenge, partnerships between the private and public sector and labour were working to dismantle the barriers preventing access to markets and finance.

Black industrialists were not only wealth creators, but agents of change.

“At the heart of every successful industrialist lies a spirit of creativity and a hunger to succeed. Black industrialists show that Africa is a continent brimming with ingenuity,” said Ramaphosa.

An unequal system had entrenched generational poverty and inequality in South Africa. However, the black industrialists programme was working to address this, he said.

In a separate panel discussion, B-BBEE commissioner Tshediso Matona said legislation had supported black industrialists for over 20 years in accessing markets, finance and value chains. He said he hoped to debunk the myth that Africans were consumers and not producers.

“The many black enterprises point to this not being true. In addition, we must resist the discourse that we shouldn’t have black billionaires. These people have invested in their companies and can have the full benefit of their labour,” Matona said

Industrial Development Corporation interim chief executive David Jarvis said there was a perception that black people were not connected. But, the black industrialists programme enabled once-discarded talent to contribute to the South African economy.

“We have so many sectors, including renewable energy, information and communications technology and agriculture that are ripe for entrepreneurs.”

Community Investment Holdings chairperson Dr Anna Mokgokong said that before 1994, fledgling and talented entrepreneurs were relegated to the township economy.

“We were never party to the corporate or industrial sides of business. Now, the black industrialists programme is an imperative that underpins democracy.”

Mokgokong called for black businesses to enter the mainstream.

’We can’t remain as SMMEs (small, medium and micro-enterprises). Black industrialists must commit to make this possible.”

She said the regulatory framework hindered the growth of black industry, particularly when foreign direct investment was involved.

“Our international partners lose interest if there is no green light to invest. They can’t wait two years for things to get moving. They can go to other countries in this competitive global economy.”

Deputy Trade and Industry Minister Fikile Majola agreed that red tape was strangling investment.

“We know we have to roll out the red carpet for business. This requires us to be flexible and more agile so that we can foster progress.”

Business Unity South Africa chief executive Khulekani Mathe said a conducive business environment was vital for black industry to thrive.

“We are facing serious challenges. I can think of failing infrastructure, water and energy challenges. This is also coupled with crime and corruption. In the logistics space alone, there is a huge problem with stealing copper and vandalism. We must stop this so businesses can feel comfortable to invest,” said Mathe.

National Empowerment Fund chairperson Dr Nthaniseng Moleko said the fund could not support the needs of the entire economy, but its support of entrepreneurs was meant to lead to inclusive economic growth.

She said that to grow the country’s gross domestic product required industrialisation.

“We need to scale up, but we need greater and coordinated collaboration with the private and public sector, and substantial financial support.”

* Beth Amato is a freelancer for Business Report.