This was said by the Director-General of the department, Mr Lionel October. He was addressing the more than 1 400 delegates from across the country who attended the summit, on the way forward after several commissions made a variety of recommendations that need be implemented in order to transform the township and rural areas into hives of economic activity and production of goods and services.
“There are various recommendations and solutions to the challenges that we are facing in our efforts to upscale the township and rural economy. But what came out loud and clear from all the commissions in the summit was that we need a clear and concrete implementation mechanism if we were to succeed in transforming this economy. Our response as government is that we are going to create a project management unit that will drive, on a full-time basis, the implementation of the recommendations and proposals that came out of this summit. It will be an inter-governmental structure that will be located in one of the big institutions such as the Council for Scientific and Industrial Research,” said October.
October added it was crystal clear from the discussions and recommendations of the commissions that small and medium enterprises in townships and rural areas were not benefitting as they should from the policies, financial support and procurement opportunities of the government.
“There is a gap between our policies, financial support and procurement opportunities offered by government, and the implementation on the ground. This is a big problem that has been identified and government will be working hard to address it,” added October.
He also said that the dti would be proposing that the clearing house model that is implemented in Gauteng and North West be replicated in all of the country’s provinces and located in the highest offices of the provinces. He explained that the clearing house is located in the premier’s office has control of procurement of all government departments and municipalities in a province.
“The clearing house is where access to procurement opportunities is given to small, medium and micro enterprises (SMMEs). This clearing house mechanism will also take care of all of the concerns and complaints raised in the summit about corruption and gatekeepers, in order to close the gap between the procurement opportunities and the delivery on the ground,” said October.
He conceded that currently there were no real funding programmes for the informal and very small businesses. To this end, the dti will proposing to National Treasury the creation of a no frills, hassle free funding model for these kinds of businesses.
October also pledged that government would:
- Establish one-stop-shop kinds of business centres in townships and villages which will house finance institutions such as the Small Enterprise Development Agency and Small Enterprise Finance Agency.
- Roll out broad band in the townships and villages to assist entrepreneurs keep up with the Fourth Industrial Revolution.
- Forge strategic partnerships with traditional leaders, business chambers and getting big corporates to invest in the townships and rural areas.
October also said there will be prioritisation of the three poorest provinces of the country, namely Eastern Cape, KwaZulu-Natal and Limpopo for roll-out of the new government interventions aimed at stimulating the township and rural economy.
“We will also be undertaking a roadshow to enlighten businesspeople about procurement opportunities that are immediately available for various sectors and how to take advantage of them,” concluded October.
The two-day Summit was held on 19-20 July 18 and was opened by Deputy President, David Mabuza. Mabuza said that our public procurement strategies will focus on SMME development, especially in sectors such as the metal fabrication, capital equipment and transport equipment, electronics and other medium as well as heavy commercial vehicles and the pharmaceutical sector. He indicated that government will ensure that SMMEs are paid within 30-days. “We cannot claim to support small business public procurement but strangle small businesses of life giving cash”.