PRESENTATION ON THE KZN PROVINCIAL PERSPECTIVE ON B-BBEE IMPLEMENTATION SMME/B-BBEE CONFERENCE DURBAN, ICC 31 August 2010

BACKGROUND BLACK ECONOMIC EMPOWERMENT (BEE) STRATEGY  Since 1994: BEE was a major thrust of all government policies YET there was no coherent strategy for its implementation.  In 2000: BEE Commission released a report which gave the first attempt at broadly defining BEE.  The BEE Commission’s report laid a good foundation for the development of strategy towards the implementation of BEE.  In 2003: a strategy for BEE was released which defined BEE as:  An integrated and coherent socio-economic process that directly contributes to the economic transformation of the country and brings about significant increases in the numbers of black people that manage, owned and control the country’s economy, as well as significant decreases in income inequalities.  Thus the BEE process will include elements of the scorecards: Ownership, Management Control, Employment Equity, Skills Development, Preferential Procurement, Enterprise Development as well as Socio-Economic Development.

KZN-B-BBEE STRATEGY VISION: A deracialized provincial economy in whose mainstream a critical mass of Black people participate meaningfully, in terms of control and ownership of private sector enterprises, and hold operational, professional, management, and executive positions in organizations of both the private and public sectors, in proportion to their demographic weight. STRATEGIC GOALS ARE:  Increase in the number of black people who have ownership and control of existing and new enterprises ( in priority sectors).  Increase number of Black people who hold senior management and executive positions in enterprises.  Increase in the proportion of the ownership and management of economic activities vested in community-based and broad-based associations and enterprises, collective enterprises, trade unions and employee trusts.  Increase in the number of Black young people, particularly rural young people, who acquire skills.  Increase in land ownership by black people, etc.

KZN-B-BBEE STRATEGY CORE ELEMENTS OF THE STRATEGY:  Enterprise Development.  Skills Development (mainly unemployed youth).  Empowerment of target group enterprises (including Black-Engendered and youth owned enterprises) through Preferential Procurement.  Empowerment of persons or groups/communities to increase their ownership and control of enterprises and other productive assets such as land.  Enforcement of the Employment Equity Act.  Encouragement of Corporate Social Investment from large companies

KZN-B-BBEE STRATEGY POLICY INSTRUMENTS :  Various Legislations and Regulations  Preferential Procurement  Institutional support arrangements  Partnerships  Enterprise Development  Financing (Provincial Empowerment Fund)

KZN-B-BBEE STRATEGY ROLE PLAYERS :  All Government Departments  Financial Institutions and other Funding Agencies  State Owned Enterprises/ Public Entities  Organised Business  BEE Verification Agencies  Community-based Organisations, etc.

KZN B-BBEE IMPLEMENTATION PROGRAMMES

IMPLEMENTATION PROGRAMMES  INFORMATION DISSEMINATION  Improving knowledge of Black enterprises (on amongst other things, Incentives Schemes and available funding and/or financial support).  Sharing information on BEE opportunities.  Sharing information on government economic empowerment strategies and relevant legislations.  Sharing information on employment opportunities, etc.  SKILLS DEVELOPMENT  Co-ordination and reporting on all initiatives of the organizations involved in skills development in the province such as FET,SETAs and JIPSA.  Redesign and implementation of government’s learnership and apprenticeship programme through the Skills Development Fund.

IMPLEMENTATION PROGRAMMES  FINANCING (PEF)  Co-ordination of available BEE funding instruments.  Funding of empowerment transactions/deals and structure financial arrangements.  Working with financial institutions on the financing of major BEE projects by private sector, financial institutions and the public sector development finance institutions i.e. NEF,IDC, and DBSA.  PREFERENTIAL PROCUREMENT  Encouraging big enterprises to comply with BEE legislation and relevant transformation strategies i.e. BEE Codes of Good Practice.  Increasing the level of preference for target groups, i.e. Black Owned, Black Empowered and Black Engendered enterprises by setting clear targets.  Ensuring that all Government Departments, SOEs and Public Entities implement the set target on procurement.

IMPLEMENTATION PROGRAMMES  ENTERPRISE DEVELOPMENT (SECTOR MATRIX)  Focus on provincial priority sectors.  Focus on ‘graduating’ selected small Black-Owned enterprises into medium and large enterprises within selected sectors.  Direct and/or influence activities of other programmes towards prioritised and selected sectors.  Direct financing, procurement and skills development in a more focused and sustained manner. Criteria for selection: (a) Demonstrate potential to grow; (b) belonging in one of ffl. priority sectors: Manufacturing, Furniture, Clothing and Textile, Entertainment, ICT, Tourisms, Agriculture, Property, Agriculture and Agro-processing, and Freight and logistics, to name a few...

IMPLEMENTATION PROGRAMMES  PARTNERSHIP AND STAKEHOLDER RELATIONS  Facilitating government partnerships with, and the establishment of associations of small Black enterprises at sectoral and economic-wide levels.  Forming of partnerships with various organizations (small and large) in order to facilitate the implementation of BEE programmes across the province.  BEE MONITORING AND EVALUATION  Conducting an audit of BEE performance in the province and establishing baselines for targets.  Adjusting KZN BEE scorecard targets in order to take account of baselines through the partnership and stakeholder relation programme and BEE Implementation Team.  Monitoring and evaluation of the status of BEE performance in the province.  Conducting an annual review of the strategy as well as its programmes.

KZN B-BBEE IMPLEMENTATION STRUCTURE FOUR WORK STREAMS:  Preferential procurement  Enterprise development  Finance  Skills Development NB: All above-mentioned Work Streams are comprise of all provincial Government Department s and other relevant Stakeholders.

KZN B-BBEE IMPLEMENTATION STRUCTURE DEVELOPMENTS AND STRUCTURES FORMED TO DATE...  B-BBEE Ombudsman Office.  KZN B-BBEE Advisory Council (Chaired by the Premier).  B-BBEE Implementation Team and Work Streams (represented by all depts.).  Currently finalising the Provincial BEE Procurement Policy Instrument (50%)  Currently undertaking BEE Verification of Government and Public Entities

THE END… Ngiyabonga