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Black Industrialists Interim Report Released

September 7, 2020

Department of Trade, Industry and Competition

The transformation agenda must include equitable provincial spread so that development is a reality across the country.

The trade, industry and competition department highlighted this in a briefing in parliament on Support for Transformation and Black Industrialists –Interim Report.

The department added that this may require dedicated resources to the Industrial Development Corporation and National Empowerment Fund to promote this.

The trade, industry and competition minister, Ebrahim Patel, tabled information in an interim report to the portfolio committee on trade and industry that showed that R32.6 billion in funding has been approved to more than 900 Black Industrialists and black owned businesses by the department and its agencies in the last five years.

The department also declared that township and rural enterprises and small enterprise development, though falling principally under the small business development department, must also be promoted via transformation policies.

The department pointed out that a number of Black Industrialists continue to face challenges with breaking into markets or managing sustainable enterprises.

Some of the difficulties include:

• Limited access to support and facilities from commercial banks due to lack of business track records or collateral;
• Concentrated markets where incumbents (existing dominant firms) effectively limit entry of new players such as exclusivity leases in shopping malls that have kept smaller grocery retailers out of major market platforms;
• Limited market experience in some sectors, which result in over-expansion, or limited ability to respond to fast-changing market conditions or reliance on a limited number of large customers;
• Weak governance arrangements in company boards;
• Loss of major customers or contracts or export markets; and
• Impact of Covid-19 on businesses this year.

The department indicated that, throughout government, “programs need to be more integrated, so that industrial funding is accompanied by procurement support, access to infrastructure, export promotion etc–creating a joined-up package of support”.

Economic inclusion also needs to be linked more closely with growth and job creation.

In a statement, the minister declared that “broad-based transformation is a vital component of government policy and that greater focus on transformation policies are needed to determine what mechanisms work and what do not and that policy-makers have an open mind on ways to enhance the objective of economic inclusion”.

The department also briefed the national council of provinces on the Retail-Clothing, Textile, Footwear and Leather Master Plan signed in November 2019.

Core actions of the Masterplan include growing the local market, local sourcing, stopping illegal imports, incentive programme extensions and value-chain transformation.

In a statement, the department indicated that greater effort has been directed at localisation of Personal Protective Equipment to boost the Retail Clothing, Textile, Footwear and Leather sector in light of the devastating effects of Covid-19 in the sector.

Addressing the select committee on trade and industry, economic development, small business development, tourism, employment and labour, the deputy minister of trade, industry and competition, Fikile Majola, said that government is “committed to reviving the sector as it focuses on rebuilding manufacturing and to enable it to expand its capacity. We also are working towards significantly reducing illegal imports to eliminate unfair competition against local retailers and manufacturers”.

In another statement, the department announced that the 2020 Innovation Summit will be held from 30 September to 1 October 2020. The event will be held virtually due to the Covid-19 pandemic.

The department plans to, during the summit, “increase awareness of innovation and new digital technologies especially to the existing black industrialists and grassroots innovators through collaboration with different economic actors”.