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Black Business Council: BEE partners should show commitment

(People's Daily Online)  Sissy Zhang  2016-10-12 11:53

 
George Sebulela, the Secretary General of the Black Business Council is interviewed by People’s Daily Online in South Africa. (Picture: People’s Daily Online)

Black Business Council (BBC) is quite satisfied with South Africa’s previous amendment with Black Economic Empowerment (BEE), which “has been improved tremendously”, but is not happy with the government procurement act that “was badly crafted” according to George Sebulela, the Secretary General of the BBC.

Speaking for the top black business organisation in the country, Sebulelacomplains that black-owned business can hardly win government procurement deals in a situation where the rewards are 90% price-driven and transformational objectives like BEE and social investment only account for 10%. “The R500-billion procurement in the government was only benefiting the bigger companies which are predominantly white-owned businesses.” Says Sebulela in an exclusive interview with People’s Daily Online SA.

“If I’m big and I can produce, I can probably reduce my price. If I’m a smaller business and I come with my pricing because I buy from someone else, I can’t compete with the bigger players.” SaysSebulela.

Sebulela’s reasoning reached SA President Jacob Zuma before the head of the State announced at the BBC annual dinner in late September that the Preferential Procurement Policy Framework Act was being amended and would include a compulsory clause that ensured 40% of all government contracts of over R30-million would be subcontractedto small, black-owned businesses.

The amendment bill is currently in the consultative phase before parliament vote.

Commenting on the government’s recent proposed amendment to its mining charter, Head of Policy Research of the Institute for Race Relations(IRR), DrAnthea Jeffery, says to The South African, “stricter BEE rules of the kind reflected in the draft charter will never help the unemployed or those who live in poverty. This can be achieved only via policies that attract investment, generate jobs, and raise the annual economic growth rate from zero to 5% of GDP or more.”

Sebulela denies that South African economy is in shambles but in a “lighter situation” where it hasn’t grown to expectation. He urges SA government, unions and private sectors come together to advance the economy. In the process of enhancing the disadvantaged black community’s participation into mainstreameconomy, Sebulela insists that BEE must be implemented with an agenda addressing both transformation and growth.

“BEE is not just about equity,” claims Sebulela. He says that there are also elementsof social investment, management inclusiveness, training and development, “making the society better around all forms of activities that you do”.

“With good intentions, it’s welcomed by many industries. It’s a process that has been done everywhere in the world in some other forms.” He says.

BEE partners should show commitment to partnerships

Speaking of choosing a BEE partner smartly, Sebulela suggests new investors to South Africa go for someone who can add value and the ones who “understandthe industry that you are in” instead of for pure compliance reasons. “We don’t want people who are going to be utilised as a front only because they are black.” He says.

Sebulelahas years of investment banking experienceas the head of the Black Empowerment Division with ABSA Capital, advising companies on relevant restructuring including the types of partnership they should select.

According to Sebulela, besides experience and qualifications, ability to facilitate capital, good relationship with relevant government departments, active involvement in both day-to-day operations and strategic decision-makings, and commitment to the partnership are also essential qualities of a value-adding BEE partner.

SA not well presented in G20

After years of interactions with Chinese businessmenboth in South Africa and in China, Sebulela senses that Chinese investors have identified South Africa and Africa as a potentially major market for them to diverse the risks in investing in other emerging economies.

Sebulelawas in eastern Chinese city of Hang Zhou for the Group of 20 (G20) Summit last month. He has an impression that the constitution of the South African delegation didn’t fully reflect the capacity of the most developed economy in Africa.

“We have big blue chip companies, very successful business people and community organizations that add a lot of value. I don’t think the attendance reflected the representation of South Africa,” says Sebulela.

He appreciates the critical pointaddressed by Chinese President Xi Jinping that emerging economies should be treated equally as developed countries with a fair and equitable international order.

Running the second largest economy in the world, Xi also mentioned solving the pressing issues of innovation and security to better develop the economy worldwide.“He really spoke from the heart, not just representing China but sounding like the President of the world,” comments Sebulela.