5 minute read
EMPOWERMENT
Businesses must use their B-BBEE deliverables to
create interventions for economic growth
South Africa is in trouble. Before COVID-19, the economy was already teetering at the edge of a fiscal cliff with two consecutive quarters of negative GDP growth and the expanded unemployment rate at a frightening 42%. Then COVID turned South Africa and the world on its head, fast tracking an unprecedented global slow-down that infiltrated every crevice of economic activity.
The harsh reality is that South Africa was dealt a severe blow – and it’s going to take years to restore our struggling economy and reduce our national debt burden.
But Rajan Naidoo, the Managing Director of EduPower Skills Academy, believes there is hope. He says the tenets of B-BBEE are a catalyst that can be used to guide and co-ordinate South Africa’s economic recovery.
“Government cannot legislate our economy out of the recession but through B-BBEE it can create conditions that allow for growth to occur in the private sector,” Naidoo explains. “The solution lies with the large corporates that have within their power and resources huge reserves in their balance sheets, some of which now needs to be invested in stimulating small businesses and essential job creation.”
Much of this SME development is already being facilitated by B-BBEE through mechanisms such as preferential procurement, but Naidoo says that efforts need to be multiplied exponentially: “Prior to COVID, SMEs accounted for 98% of the businesses in South Africa providing 25% of all jobs and contributing 39% of the national GDP. But 40% of these businesses have been forced to close their doors and many people have lost their jobs as a result,” he says.
“Boosting SMEs is a crucial step towards growing the South African economy. Corporate human solidarity should instinctively and voluntarily drive the private sector to support smaller businesses, assisting the nation to rise out of this economic quagmire and in doing so, strengthen our market and economy.”
The natural starting point for this recovery begins with another B-BBEE priority element, skills development. South Africa’s extended youth unemployment rate is over 65% but most of these 18- to 34-year-olds have stopped looking for jobs as they don’t have skills the market requires. Naidoo believes the solution for upskilling the youth is learnerships. “Job creation starts with skills development so let’s get as many unemployed youths into learnerships as soon as possible so that we can start building the skills our country needs,” he explains. “These learnerships can culminate in options for absorption into long term employment. This is something that we are already doing at EduPower and we have a proven model that works. As a nation, we just need to start applying this on a much wider basis.”
EduPower’s innovative absorption model ensures that when unemployed learners complete their qualification, they are placed into permanent jobs in small companies. Instead of adding this salary burden for the SME though, these jobs are funded in the short-term by large companies through their enterprise or supplier development budgets.
“This is a great example of a co-ordinated process that culminates in permanent empowerment and thus delivers on the true intent of B-BBEE,” says Naidoo. “The learners receive long term employment (and experience); the SME owner gains a skilled labour force that helps his business grow so that he can hire even more unemployed learners, and the corporates gain invaluable points for their B-BBEE scorecard.”
Rolling this out exponentially on a nationwide basis would be straightforward as the mechanisms are already in place. Naidoo believes the economy could benefit even more if industry specific strategies were applied as the impact of COVID has been different across market sectors.
Naidoo concludes with a call to action: “The stimulation of the private sector and the declaration of certain supply chains as national strategic imperatives will force and support the development of the sectors of the economy that will provide jobs and growth. This development needs to happen immediately, and it starts with skills development and absorption. Let’s use B-BBEE to get our nation and our economy working.”
Rajan Naidoo, Director of EduPower.
You have a vision and you have worked hard to turn it into reality. At ubank, we have made your vision, our priority because we believe in you as much as you do. That is why in our 45 You have a vision and you have worked hard to turn it into reality. years of existence we have become trailblazers in banking the unbanked and continue to work around the clock to At ubank, we have made your vision, our priority because we believe in you as much as you do. That is why in our 45 make sure that we grow with you every step of the way. We have built product portfolio that is all-inclusive, making years of existence we have become trailblazers in banking the unbanked and continue to work around the clock to sure that we recognise the potential of our youth by starting them young with the Youth and Student Transactional make sure that we grow with you every step of the way. We have built product portfolio that is all-inclusive, making Accounts, tailor-made to fit their growing financial needs. Moreover, we service SMMEs by providing business sure that we recognise the potential of our youth by starting them young with the Youth and Student Transactional accounts that will help elevate their businesses to the next level. Ubank also has varying savings accounts like the Accounts, tailor-made to fit their growing financial needs. Moreover, we service SMMEs by providing business Notice Deposit Accounts with five different notice withdrawal options. That is the kind of banking partner you need, accounts that will help elevate their businesses to the next level. Ubank also has varying savings accounts like the one that sees your vision and commits to working with you in making sure we succeed together.Notice Deposit Accounts with five different notice withdrawal options. That is the kind of banking partner you need, Visit your nearest ubank branch and speak to a consultant about an account that will take your financial vision to one that sees your vision and commits to working with you in making sure we succeed together. new heights. Visit your nearest ubank branch and speak to a consultant about an account that will take your financial vision to Ubank. Growing with you. new heights. Ubank. Growing with you.
