Expanding the participation of black people, women, and people with disability in the economic mainstream and in strategic economic sectors can work hand-in-hand with faster economic growth, says Finance Minister Enoch Godongwana.
The Minister made the comments while addressing the South African Institute of Black Property Practitioners annual convention on Thursday.
He said: “As a government, we must and are focusing on creating an enabling environment for businesses. This we are doing by implementing policy reforms that address fundamentals such as access to funding and other barriers to entry, as well as improving basic infrastructure and services such as reliable water and sanitation, electricity and roads”.
He said the list of Strategic Integrated Projects government launched in 2020 speak directly to these objectives.
“That we paired these projects with a requirement that companies involved must have at least a Level 2 B-BBEE speaks of our unwavering commitment to drive empowerment and transformation. The most recent report by the BEE Commission shows that we are losing ground when it comes to transformation, broadly and in the property sector in particular,” said the Minister.
In 2021, there was a 1.5 percent decrease in the levels of transformation, with overall black ownership declining from 31 percent in 2020 to 29.5 percent last year, he revealed.
“In the property sector, which is valued at around R8 trillion, average black ownership across residential and non-residential categories almost doubled, to nearly 18 percent in 2021. The increase is worth celebrating but viewed over a five-year period there is some cause for concern. In 2017 black property ownership stood at 34 percent,” he said.
Black ownership in the construction sector, he said, has been more consistent.
“It reached a high of 56.4 percent in 2020 but declined to 47 percent in 2021. Beyond ownership, and despite the Broad-Based Black Economic Empowerment Codes of Good Practice, a number of organizations are struggling to diversify their workforces.
“These companies are failing to benefit from the clear link between higher diversity and inclusion and increased growth and performance.
“For example, black representation on the boards of JSE-listed companies showed an increase from 28 percent to 38 percent, yet more can still be done. The statistics on empowerment targets of the financing companies show that access to funding remains a hurdle,” he said.
Government, he said, places a “high premium” on the role of infrastructure in reviving the country’s economy, “transforming it and placing it on a higher, more sustainable and inclusive growth trajectory”.
“In this regard, we remain resolute in our ongoing efforts to use infrastructure to build an economy that leaves no one behind. We are also mindful of the important role that infrastructure investment and delivery can play in advancing Broad-Based Black Economic Empowerment,” he said.
The Minister said infrastructure investment and development had the potential to genuinely move the growth needle. To achieve this, he said there were interventions, at a macro and micro level that need to be made.
“At a macro level, the more efficient use of public land and public buildings is a critical lever to achieve spatial and economic justice by connecting people to each other and to their places of work and recreation,” he said.
In this regard, he said government had already gazetted projects worth nearly R140 billion in the human settlements sector.
“We are working on expanding this pipeline as well as those in other sectors. Access to these projects and the awarding of approvals and development rights is contingent on BEE certification to ensure that we empower businesses that are both competent and compliant with our national transformation objectives,” said Godongwana.
Black property practitioners, he said, are “uniquely poised to take advantage of the government’s renewed commitment to both a massive rollout of infrastructure to stimulate economic growth and jobs, as well as our objective to ensure that growth is inclusive and underpinned by the structural transformation of the economy”.
“As government we view you as a partner in the pursuit of a common goal. Accordingly, let us continue to join hands for as I said earlier ours is a shared future – a shared destiny,” he said.
(With Inputs from South African Government Press Release)