As Members of the Proudly South African family, Impumelelo Consulting attended the Proudly South African Buy Local Summit And Expo 2019 at the Sandton Convention Centre which took place on the 12th and 13th of March 2019, the exact same days as the National Skills Development Summit.
A collection of business experts, SMMEs and multinational corporations – those that are making a significant contribution to the SA economy in particular – for many, the gathering was more than just another day of listening to experts share ideas on how they can take their enterprises to the next level.
The “buy local” ethos reverberated throughout many of the day’s discussions, reminding us as a nation that “we have the capability and ability to produce the best, and that we have pockets of excellence that warrant recognition and celebration,” said Cassel Mathale, deputy Minister of Small Business Development.
In his speech, Mathale highlighted the importance of buying locally produced goods as a catalyst to tackling the triple challenges of unemployment, inequality and poverty. “This is one of the few initiatives that provides opportunities for SMMEs and cooperatives to participate in the value chains of establishing viable businesses. Access to markets and procurement opportunities remain one of the serious challenges that are preventing SMMEs from reaching their fullest potential and ultimately participating and benefitting from the value streams of our economy. Hence it’s a great pleasure for me to be part of this summit as we discuss innovative ways to address the imperatives of localization in both the private and public sectors in growing our economies, creating jobs and broadening our skill base.”
He added: “Despite the many strides made as a country in the past 25 years, we are still battling the triple challenges of poverty, unemployment and inequality. Nelson Mandela started the road towards us defeating these challenges, and we are on this journey today led by President Cyril Ramaphosa. We need to intensify our efforts to radically transform our country by ensuring that SMMEs and cooperatives occupy their rightful space within the value stream of the economy. As the department of small business development, we have been making consented efforts irrespective of the limited media resources allocated to assist many people in business and those aspiring to venture into entrepreneurship. We know and understand that unless we collaborate with other departments, the private sector and the community at large, we will not have achieved this.”
Collaborations key to driving localization
To intensify efforts, he said the ministry has put in place a number of initiatives to support and advance the development of SMMEs and cooperatives which have borne some good results. “However, looking at the enormity of the challenges we have; the youth unemployment, the need for economic inclusion of women, and other vulnerable groups as well as the historical remnants of an education system focused on creating job seekers instead of job creators, all our efforts are a drop in the ocean and will remain as such if we do this alone. We need all hands-on deck. We are therefore excited about the collaborations with leaders of the industry, government departments and other entities in driving localization beyond this summit, thereby creating a demand for South African products and ultimately reducing unemployment, poverty and inequality. Together we can do more.”
Guided by the theme of the summit, ‘Localisation Through Investment Led Re-industrialization’, born as the result of the outcomes of the 2018 Presidential Job Summit, a lot still needs to be done by companies to grow the country’s economy and increase job opportunities, he said. Touching on one of the resolutions of the Job Summit, ‘the need for support for township and rural enterprises‘, he said: “It is very difficult for one to talk about SMMEs without referring to the township and rural enterprises, many of which are located in these areas, including in the so called informal settlements. The success of these enterprises sorely relies on inputs such as requisite skills, mentoring, coaching, appropriate marketing and procurement systems as well as access to market opportunities both within the public and private sectors.”
According to statistics by the Department of Trade Industry, the number of SMMEs in SA is sitting at 5,8 million, while their contribution to employment is estimated to be around 60%. Furthermore, the National Development Plan projects that no less than 90% of new jobs will be created by SMMEs by 2030. However, the risk to failure in running and sustaining a successful business remains a challenge for many township start-ups. According to statistics, more than 50% start-ups in South Africa fail within 24 months primarily due to inexperience and limited access to funding and operational resources.
That said, it is important that a greater deal of attention is given to small businesses in both the rural and township, “because that’s where majority of our people resides,” Mathale stressed adding: “25 years on they have not experienced or felt what we mean when we talk about economic transformation. It’s therefore imperative that we address this weakness and ensure that it happens.”
These enterprises he maintained are, “in most cases unfortunately not trusted by many potential markets and clients as they lack the so called track records and experience. They do not have the capital to access these big contracts, and moreover they cannot afford to pay for the necessary systems to ensure that they comply with the necessary industry standards.
“Of course as government we are also a culprit because sometimes we put conditions that make it impossible for small businesses to access funding from us. We need to come to the party as government. We don’t need to be reminded of what our mandate is, which is to serve our people.”
‘Thuma mina’: Consumers urged to consciously buy locally made goods
Urging businesses and citizens to join hands to the President Cyril Ramaphosa’s clarian call of ‘Thuma Mina’, he pointed out that the profound economic benefits of keeping money in local communities can never be stressed goods enough. “Fellow South Africans, the concept of localization is very strategic for the growth of a small enterprises as it increases the demand for locally made goods. It ensures that all products and services have no less than 50% local content, whereby SMMEs and companies benefit by participating in the value chains of big companies as suppliers of locally produced finished products or as service providers in the processing or even distribution levels.
Therefore this calls for all of us as consumers to consciously buy goods and services that are produced by South African companies, and especially those that bear the logo of Proudly SA. In that way, we not only uphold the national pride in the consumption of local products. We also contribute to employment creation, as these companies employ the many unemployed South Africans.”
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He added: “And it’s not true that local people do not produce good quality goods. Standing here in front of you, I’ve put on a jacket produced and tailored by a young South African. And I’m convinced that I can stand next to any other jacket in the world and these will still compete as the best. Our people need to be given the opportunity and platform and they will perform,” he said to thunderous applause from members of the audience.
Getting ready for 4th Industrial Revolution
Mathale took audiences back to one of the previous Buy Local Summit’s resolutions, in which Minister of Small Business Development, Lindiwe Zulu made a call to all South Africans to become active citizens. “I wish to emphasize her statement that, ‘economic growth requires us to think out of the box rather than pursuing unimaginative approaches’.”
Thinking out of the box, he said, means being able to be innovative, creative and willing to embrace new ways of doing things. “The fourth industrial revolution is upon us and is a fact. Many businesses are operated digitally, and companies are gradually moving towards e-business in order for one to remain relevant in the world of business. We need to go where the world is going, which is e-commerce. Please allow me to borrow from our former President Nelson Mandela, when he said, “when people are determined they can overcome anything. With our joint determination to ‘localization and re-industrialization’, we will overcome poverty, unemployment and inequality.”