Black business owners say the government is not doing enough to ensure that they get access to finance and markets to grow their enterprises and help create much needed jobs.
Speaking at the Black Business Council’s (BBC) two-day summit in Bryanston, Joburg, yesterday, black business owners aired the frustrations they face in trying to grow and make an impact in society.
The summit is looking into the role entrepreneurs can play in the country’s economic recovery post the Covid-19 pandemic.
The summit comes on the back of of devastating jobs statistics released on Tuesday, which show that unemployment has risen to 32.5% in the first quarter of this year, the highest level recorded by Statistics SA since 2008.
Business owner Moeketsi Lehoko of SAW Group – a technology, engineering and medical supplies firm from Vanderbijlpark, south of Joburg – said he struggled to get loans from commercial banks to expand his business to create more jobs.
His company makes sandwich panels – a combination of steel sheets and polystyrene, which is used to make VIP toilets and other mobile structures.
A few years ago he approached one of the big four commercial banks for a loan of R18m. The money was to be used to buy machinery that would enable him to produce some of the construction material himself.
“The bank said there were risks associated with my business and I did not have collateral … There must be a different bank which can fund us as black businesses,” said Lehoko.
Lehoko currently employs 42 people but said he could have had 120 workers with the new machinery.
He said he uses money he makes from a pub just to finance his engineering firm’s expansion.
David Makae – who runs Superb Home, a construction company that produces trusses, light steel frames and roof sheets – faced a different problem.
Four years ago, when he started the manufacturing part of his business, he bought new machinery. But since acquiring the machinery, Makae has not been able to get business from black contractors. His pricing is higher than white suppliers because he does not buy in large quantities.
“All the contractors that are building houses, schools and clinics should be buying from a black industrialist like me but that is not happening … Now I am considering selling the machinery that I bought to pay rent,” said Makae.
Makae said he could employ 60 people if he had access to markets but only has 10 workers.
BBC CEO Kganki Matabane said the issue of access to finance and markets was a priority for the council. He said the BBC had agreed two years ago that there should be a black bank.
“The challenge is from state-funding institutions. If you want to start a bank you need a PIC-type [ Public Investment Corporation ] of investment. Unfortunately, the PIC over the few years has been dysfunctional. The PIC says it is still trying to organise itself. Once it has reorganised itself we can then have an engagement about the funding,” said Matabane.
He added that even though the government supports the establishment of a black bank it has not committed to a timeline in which it wants it to be up and running.
To deal with the issue of access to markets, Matabane said the cause of the problem is the delay in processing the public procurement bill.
“Procurement legislation is supposed to have preference for blacks, small business and businesses owned by the youth, women and people living with disabilities. Currently legislation does not address that,” said Matabane.
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