Skills ‘imperative’ in SME sector
WITH some of the world’s fastest growing economies situated within its boundaries, Africa is home to 54 sovereign states with uneven development, numerous small markets and varied practices and regulations in various industries.
Inundated with a diverse political landscape, the African continent should be set to become a frontier for labour development, as an encouraging 10 to 12-million young people — a substantial number of them under the age of 25 — will enter its labour markets each year.
Xolani Mkhwanazi, chairman of BHP Billiton SA — which has the biggest market capitalisation of any company listed on the South African bourse — says the company is looking at a strong recipe for economic success on the continent.
BHP Billiton has three businesses which contribute significantly to the local economy through employment (about 20,000 staff and contractors), infrastructure development, exports, beneficiation, taxation and corporate social investment. In Mozambique, the organisation owns 47% of the Mozal smelter, in which it has invested $2.2bn. Mozal has tripled the country’s exports and added more than 7% to GDP in its initial years of operation.
Says Mkhwanazi: “Investing in a country or a continent should be more than just about returns and once-off projects. It is important to sign up as a partner in long-term investment to help grow and develop the country or continent’s economy.”
He notes that beneficiation has been touted by SA’s government as a key jobs driver, and as a means of rejuvenating the country’s struggling manufacturing sector. He says the company strongly supports government’s initiatives to enhance the country’s beneficiation performance.
“Ultimately, all stakeholders are focused on encouraging greater beneficiation in order to create more investment, more economic growth and job creation and to tackle unemployment, poverty and inequality.”
He believes that the government’s June 2011 Beneficiation Strategy document provides a solid base for understanding the clusters of sidestream and downstream beneficiation that are significant contributors to the industrial base of SA. BHP Billiton’s aluminium smelters in Richards Bay are a key contributor to this industrial base, says Mkhwanazi.
“For a continent with a dependency ratio of just over 84%, we urgently need something more tangible than rhetoric to force a real step change in Africa’s growth path. A highly skilled and successful SME sector is imperative to the economic growth of the continent.
“The government’s collaboration with foreign investors is essential, policies need to be structured to ensure a viable operating environment and enable investment in critical areas such as capacity building, skills development and job creation.”
Mkhwanazi says the mining sector remains big business on the continent and is one of the sectors showing great promise despite current labour issues. The sector has the potential to create thousands of jobs in Africa.
“However, for a business to operate sustainably it can only afford to employ skilled people who are productive contributors to their operations. It is imperative therefore that governments across the continent, as well as investors, play their part in fostering these skills.”