9 months ago

South African Business 2023

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A unique guide to business and investment in South Africa. Welcome to the 11th edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by a website at www. A special feature in this journal focusses on the importance of partnerships as the way forward for the country’s growing number of Special Economic Zones. There are now SEZs in eight provinces and collaboration between the private sector and government and its agencies is proving a crucial element in pursuing the goal of industrializing the South African economy. These zones intended as catalysts for economic growth in established sectors and in stimulating new industries. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provinces. The fact that South Africa’s law-enforcement agencies are arresting people alleged to have been involved in state capture and the Reserve Bank has started freezing assets in other matters leads the national overview because business can’t function properly without the rule of law. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at These unique titles are supported by a monthly business e-newsletter with a circulation of over 35 000. Journal of African Business joined the Global African Network stable of publications as an annual in 2020 and is now published quarterly.

OVERVIEW Development

OVERVIEW Development finance and SMME support Expanding small business has become big business. SECTOR INSIGHT More than 30 small businesses supply services to a mine in northern Limpopo. The number and scope of the Business Day Supplier Development Awards gives an indication of how developed this aspect of support for small enterprise has become in the South African business community. The process of helping small businesses become bigger businesses has sparked creativity across sectors such as retail and mining and collaboration with other companies has become the norm in promoting supplier development. A fairly new initiative, the HandPicked programme of the Mr Price Foundation, has no fewer than five partners in African Grower, CHEP, Fresh Life Produce, Veldskoen and Catalyx. These partners cover urban or vertical farming, logistics, developers and implementers of a growing system for urban areas, shoe manufacturing and training. Young people interested in agriculture are trained in innovative farming techniques and business skills with the goals of tackling food security, eliminating poverty and hunger and promoting good health and well-being. The list of winners from 2021 points to how important and varied supplier development has become in the SMME environment. 2021 Winners Credit: Dipuno Fund Overall Winner – award sponsored by Absa: Tiger Brands. Agri supply-chain development includes agri-procurement access, import replacement, funding support, land-access support and agrarian technical support using an aggregator model with strategic partners that enable small farmers to benefit while developing black mega farmers. Tiger Brands launched the Dipuno Enterprise and Supplier Development Fund in 2019, committing R100- million in investment by 2025 to black-owned and black womenowned small enterprises and smallholder farmers. Initiatives are underpinned by strong collaborative partnerships with government, colleges, mining houses and their pipeline partners. There is a focus on technology investment. Localisation Award: The Empact Group, which collaborates with local agricultural departments to bring opportunities to local farmers, straight into their local and Gauteng supply chain outlets. Outstanding Growth in a Small Supplier Award: Exxaro. In 2019, in response to the pandemic, Exxaro invested and allocated R200-million to ESD transformation. MBR was one of the companies that benefitted as Exxaro provided MBR with a zerointerest loan of R25-million to acquire mining operations assets. Newcomer Award: Uyandiswa Innovation Award: V&A Waterfront Youth Focus Award: Anglo American Zimele Women Focus Award: sponsored by Cold Press Media: The Empact Group SOUTH AFRICAN BUSINESS 2023 76

OVERVIEW Rural and Township Focus Award: the SPAR Rural Hub model Emerging Technology Award: Exxaro Resources Collaboration Award – sponsored by Fetola: Tiger Brands The Covid-19 Recovery Award: Distell Small Supplier Award – sponsored by IDC: Distell, in partnership with supplier Stellar Wines. Most big companies in South Africa have two main programmes to support SMMES: enterprise development (ED) and local supplier development (or procurement). Venetia Mine in northern Limpopo, a De Beers Group mine, has more than 50 SMMEs enrolled in incubation programmes and 34 locally-owned companies are doing business with the mine. Covid scheme An amount of R15-billion was made available by national government for businesses adversely affected by Covid-19 and the unrest and floods that hit KwaZulu-Natal in 2021, but Treasury announced in August 2022 that only R77-million of this “bounce back” scheme had been disbursed out of a total of R140-million in loans approved. Any small business is eligible for the loans, irrespective of whether or not it was directly harmed by one of the bad events, but a combination of other events such as loadshedding and higher interest rates had discouraged uptake. A R200-billion loan guarantee scheme (LGS) was made available for firms with a turnover of less than R300-million per year. This scheme received very few applications and so the criteria were relaxed although money can still only be used for operations. Treasury will also now take responsibility for the first 20.5% of default losses, in contrast to the first iteration whereby banks had to take that loss. While the “bounce back” scheme allows businesses to change the terms of the loan (by extending it, for example), the LGS is a fixed-term loan. National programmes The National Department of Small Business Development (DSBD) has several programmes to assist SMMEs and co-operatives. ONLINE RESOURCES Business Day Supplier Development Awards: National Department of Small Business Development: Small Business Institute: Small Enterprise Development Agency: The Small Enterprise Development Agency (Seda), a subsidiary of the DSBD, has 42 incubation centres under its Seda Technology Programme (STP). In Mpumalanga, Seda supports several incubators: Furntech, furniture manufacturing, White River; Mobile Agro-Skills Development & Training, agricultural training, Nelspruit; Mpumalanga Stainless Initiative (MSI), stainless-steel processing, Middelburg (with Columbus Stainless); Timbali floriculture, Nelspruit; Ehlanzeni TVET College Rapid Incubator Renewable Technologies, Nelspruit. In the North West, the Provincial Government is investing in digital infrastructure. SMMEs will be able to use the newly-established Mafikeng Digital Innovation Hub as a co-working environment and to get support in using digital tools. The South African National Roads Agency Limited (SANRAL) actively supports small businesses wherever it works in South Africa. Subcontracts are routinely awarded for maintenance such as the patching of potholes, fencing and the cutting of grass verges. Part of the rationale behind a national programme to revive industrial parks is to benefit SMMEs. The National Department of Trade, Industry and Competition (the dtic) has invested R40- million in the Nkowankowa Industrial Park in Limpopo, an initiative which has helped to create 174 direct jobs. In the northern reaches of the province, more than 300 jobs have been created with the revitalisation of the Thohoyandou Industrial Park, which has achieved a 91% occupancy rate. The dtic is trying to stimulate township and rural economies through programmes such as the Enterprise Investment Programme (EIP). ■ 77 SOUTH AFRICAN BUSINESS 2023

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