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Proudly SA: Mboweni's wriggle room rests with private enterprise

Posted on 2020-03-03 00:00:00


Proudly SA: Mboweni's wriggle room rests with private enterprise

Proudly SA chief executive Eustace Mashimbye on a locally produced couch in his office in Rosebank, Johannesburg. Photo: Philippa Larkin

JOHANNESBURG - Finance Minister Tito Mboweni's Budget statement presented last week was met largely with indifferent shrugs by most because the contents of its 27 pages were largely expected.

The minister clearly had very little wriggle room and asserted that this was not the time for controversial, bold moves that would take the economy in a completely new direction.

What is required now is for him to steer a steady course that will stabilise our financial situation, make savings for the government where he can, offer what little relief to consumers that he can, in an effort to slowly but surely stimulate growth, which is nevertheless predicted to be modest at best for the foreseeable future.

So where is there wriggle room? Who can make a significant shift in gear that will inject new life into our economy? Who is it that has room to make radical changes in policy, other than the government?

The answer is: the private sector where the power of the collective could have a massive impact on our growth trajectory and on job creation.

And one of the ways the private sector can do this is through local procurement.

We have written before about our appeals to various industry bodies and organisations that represent entire sectors of the economy, such as financial services, private educational institutions, black business, business leadership and so on.

Our requests have been for them to urge their member companies to make local procurement decisions in their businesses, one item at a time, if necessary, until their supply chain is transformed to represent 100 percent local, or as near as is realistically possible. This includes not only in their manufacturing processes, but in their offices and factories, in the furniture and stationery that they procure, crockery, detergents, vehicles, uniforms, carpets, window blinds - the list is endless.
We know that SA Breweries has achieved 97percent local content in their production of beverages. From the natural raw ingredients of their beer, to bottles, labels, and bottle caps, and we commend them for their commitment in this regard.

Other companies can endeavour to do the same and extend this local procurement into their everyday business operations.

What was gratifying in the Budget was the support that is being extended to small businesses and so now is also the time for bold moves by entrepreneurs.

Seize the moment and take the opportunity to create a business that fulfils a need.

Companies will increasingly be looking for small, black owned enterprises as suppliers, not least because this assists their black economic empowerment scorecards.

We are mid-coronavirus crisis - we wrote about this last week - which has interrupted the supply of many commodities that we import from China, and because not only their shipping, but also their production has been disrupted, the goods deficit may be set to last. Herein lie massive opportunities for local production.

At a public sector procurement forum that we hosted in Mpumalanga last week the office of the auditor-general (AG) gave a presentation on adherence by the government departments to legislation that has designated 27 items for local procurement (with differing thresholds).

The AG representative spoke about how they have chosen some items that previously were largely imported, in order specifically to stimulate and capacitate local manufacturing. One example is of solar heaters.

Where there were few companies manufacturing these heaters prior to sector designation, we now have a number of companies which stepped into service, not only government procurement, but the private sector also. Check on the Department of Trade and Industry website for items that are designated and which are listed for future designation and seize the day.

Now is the time for all private citizens and for business to be bold. Collective action can effect change. The government is trying to recreate an environment in which business can flourish. They are making the cost and time of setting up new businesses easier.
Some of the Budget's tax measures ("sin tax" notwithstanding!) were designed to put more money back into the pockets of those who work to keep them economically active with as much disposable income as possible.

South Africans, let's harness our collective spending power and channel it into local locally made products and services.

Let's harness the positivity for which we are justly renowned and help government turn our current economic and unemployment crisis around. As Sankomata sang, it's Now or Never.

Eustace Mashimbye is the chief executive of Proudly South African.