R150bn to boost small busi­nesses

CityPress - - News - RAPULE TABANE rapule.radebe@city­press.co.za

Min­is­ter in the presidency Jeff Radebe has de­fended gov­ern­ment’s newly an­nounced rad­i­cal eco­nomic pol­icy, say­ing it could re­sult in about R150 bil­lion go­ing into the hands of smaller and black-owned busi­nesses an­nu­ally.

On Thurs­day, Pres­i­dent Ja­cob Zuma said gov­ern­ment would start us­ing levers such as leg­is­la­tion, li­cens­ing and bud­gets to drive the trans­for­ma­tion.

He told the na­tion that the state spent R500 bil­lion per year buy­ing goods and ser­vices, and that that bud­get had to be used to achieve eco­nomic trans­for­ma­tion.

Radebe said once the bill that would make it com­pul­sory for big con­trac­tors to sub­con­tract 30% of busi­ness to black-owned en­ter­prises was en­acted, at least R150 bil­lion would flow to­wards smaller busi­nesses.

The reg­u­la­tions regarding the sub­con­tract­ing have been fi­nalised and were gazetted in Jan­uary.

Radebe also dis­missed fears that big busi­ness could be hos­tile to the new ap­proach.

“Busi­ness has been work­ing hand in hand with gov­ern­ment. Last year, when the coun­try was fac­ing the pos­si­bil­ity of an eco­nomic down­grade, it was busi­ness that joined us to en­sure we avoided the down­grade,” he said.

Radebe said by tack­ling the anti-com­pet­i­tive prac­tices of mo­nop­o­lies, a greater role would be cre­ated for small and medium-sized en­ter­prises.

“If you look at the suc­cess of egal­i­tar­ian so­ci­eties, such as in the Scan­di­na­vian coun­tries, you will find that there was no magic that made them suc­ceed. All they did was to open up for small busi­nesses to play a big­ger role in the econ­omy,” he ex­plained.

Radebe also de­nied that with this plan, Zuma was on a frolic of his own, say­ing: “The lex­i­con of rad­i­cal eco­nomic trans­for­ma­tion first en­tered our space to­wards the last ANC con­fer­ence in Man­gaung in 2012.”

He said it arose from an as­sess­ment that the first decade of democ­racy was en­tirely de­voted to the at­tain­ment of po­lit­i­cal democ­racy; there­fore, the sec­ond phase had to be about eco­nomic eman­ci­pa­tion.

Radebe gave an as­sur­ance that the plan would not place un­due pres­sure on the Trea­sury, adding that Fi­nance Min­is­ter Pravin Gord­han would give more spe­cific con­text when he an­nounces his bud­get in two weeks.

“This is not just a wish list. All th­ese ideas and plans were dis­cussed dur­ing the Cabi­net lek­gotla and have been taken into ac­count in the bud­gets of the line de­part­ments,” Radebe said.

In his speech, Zuma em­pha­sised that the “skewed na­ture of own­er­ship and lead­er­ship pat­terns needs to be cor­rected”.

“There can be no sus­tain­abil­ity in any econ­omy if the ma­jor­ity is ex­cluded in this man­ner. In my dis­cus­sion with the busi­ness com­mu­nity, they ac­cepted th­ese trans­for­ma­tion im­per­a­tives,” he said.


Jeff Radebe

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