Sihlalo obekekileyo, abaPhathiswa abahloniphekileyo, malungu ePalamente ahloniphekileyo, kunye nani nonke bantu baseMzantsi ndihlanganisa noosomashishini,abasebenzi kunye nabahlali ... [Hon Chairperson, hon Ministers, hon Members of Parliament, and all South Africans including businesspeople, employees and community members ...]
... I greet you in support of Budget Vote No 32, that of the Department of Trade and Industry. My humble input is essentially a manual of proposals and suggestions of what needs to be done by our emerging developmental state, working together with civil society, to transform our economy for a better life for all, as was nicely articulated by Comrade Turok.
Just as a reminder, in Polokwane the ANC resolved to build strategic organisational and technical capacities of government with a view to a democratic, developmental state through, amongst other things, building and strengthening development finance institutions which are able to effectively channel financial and institutional resources towards a variety of transformation objectives.
As is to be expected in any aspiring developmental state, the implementation of the widely supported Ipap 2 is anchored by a host of dynamic tools around industrial finance. Given that our government has not been forthright and assertive enough in bolstering developmental finance, it is high time, Comrade Rob, that our state earnestly refines relevant policies, legislation and programmes to enhance the capacity of development finance institutions such as the IDC, Khula Enterprise Finance Ltd, the SA Micro-Finance Apex Fund, Samaf, as well as the provincial agencies to play a stronger and a meaningful role in the industrialisation programme.
Let us bite the bullet and not be apologetic about taking bold steps to strongly invest in industrial finance because of the vitality thereof; particularly when compared to investing in nonproductive sectors of our economy which take us nowhere but enrich a few. Whilst being critical of the low and uneven lack of investment in development finance at times by the private sector, government must intensify its efforts to invite this sector to gear up a public sector financial investment, particularly in Ipap 2.
The focus should be on further transformation of the National Empowerment Fund so that it becomes an outright development finance institution whose investment in rural co-operatives and communities is increased dramatically. An emphatic reminder to those state agencies which have not yet given the National Empowerment Fund, their share allocation is issued!
Of course, the implementation of Ipap 2 is expected to integrate the enhancement of broad-based black economic empowerment as well. I'm just reminded that it has been some time since this Parliament has received any update from the DTI in progress in the implementation of the codes of good practice on broad-based black economic empowerment as well as sector-based transformation charters. It's been some time and we need to know what is happening. This means that in view of the implementation of Ipap 2, an audit of these two areas is essential.
With regard to another Polokwane resolution which commits to transforming the structure of production and ownership, including BBBEE aimed at broadening and deracialising the ownership and control of productive assets by black people, women and youth, as a reminder, we need to assess whether BBBEE programmes are yielding the expected results. Personally I have serious doubts about any good results as yet.
Generally, there's a need for emphasis on broad economic participation in order to transform our economy and reverse the frontiers of poverty. Broadening BEE was then one of the intentions to achieve this noble goal. The question which we then ought to ask ourselves is: Why is the realisation of such a noble goal so frustratingly slow? Where is the inertia and how is it being addressed?
Another area that needs focal attention is the structuring and financing of BEE deals. Bravura, in its presentation to this Parliament in 2008, asserted that the impact of BEE participation has little or no value transferred, is often riddled with a legacy of debt, and, in essence, there is no real long-term sustainable empowerment. Bravura argued that there is limited broad-based black economic empowerment and it's the usual suspects who have access to money benefits.
As if this were not enough, our government adopted a rather awkward position of "Once BEE-empowered, always BEE-empowered" with regard to white companies. I hereby make a passionate appeal to all members to ensure that this unpalatable position is reversed and the original status, is reinstated. White-owned companies must diligently earn their BEE status as well as maintain it. To allow a white company to have a black partner for a limited period is questionable to say the least.
Once again, Bravura claims that the vast majority of BEE transactions, typically the special purpose vehicle, SPV, structures, leave the BEE participants with no more than 20% of their original shareholding. Without any doubt, these factors have to be urgently addressed as they compromise genuine broad-based black economic empowerment.
An additional risk is that the benefits of the current industrialisation programme will be that the established business community will mainly be the ones that benefit, thus exacerbating the Irish coffee syndrome in our economy.
I want to assert very strongly that any broad-based black economic empowerment that does not fundamentally integrate development and support for co-operatives is going astray. The ANC has already asserted that in transforming the structures of production and ownership such will include financial and institutional support for co-operatives and micro enterprises. Let me commend the DTI in this instance, especially MaNtuli, on adopting the drive to set up an advisory council that is strongly developmental and current, and for intensifying and promoting co- operatives.
May I just remind this august House that co-operative movements have created more jobs than the conventional business sector worldwide. Statistics that I have seen recently indicate that 100 million people have been employed by co-operatives as compared to 80 million in the private sector.
Broad-based black economic empowerment must be practised by South African businesses investing in Africa. There is no need for those investing throughout Africa to wait for appropriate legislation in host countries. What's good for the goose is good for the gander. The implementation of BEE also needs to be strong as part of the revitalisation of township economies where spaza shops, in particular, are constantly threatened by the shopping malls which are mushrooming in townships.
Mhlalingaphambili, zafa iziphaza ezilokishini! [Chairperson, spaza shops are just about to be closed down in the townships!]
Another area of concern is the lack of drive to provide incentives in the economic sector in an integrated and collaborative approach. May I just remind people that any modern economy is, amongst other things, advanced through incentives. The DTI is highly commended for revising its incentive regime, especially in the textile and clothing industry, and for preparing for the industrialisation drive. Unfortunately, concerns about the poor promotion of such incentives on the ground must be strongly expressed. In conclusion, our committee should ensure that it becomes vibrant in assessing and monitoring the work that the DTI is doing and, thus, should also conduct a self-assessment to ensure that we are able to enter into a paradigm shift from outcomes-based to a stronger emphasis to impact-based assessment.
Let me take the last few seconds just to respond to a few disconcerting inputs. Firstly, it is claimed that some of the good candidates were left out in the appointment of the National Lotteries Board; that is not true. Anyone can go to records and look at how the lottery board was established.