A study of current perceptions of Black SMME suppliers to State Owned Enterprises’ on BEE policies

Abstract

Much attention has been given in recent years to the development of small businesses in South Africa and challenging developmental objectives have been set. This research suggests that State Owned Enterprises (SOEs) have responded to these challenges and are in the forefront to realise these related objectives. A lot has been researched about the state of Small, Medium and Micro Enterprises (SMMEs) in general but little specific attention has been given to the role of state institutions that support SMMEs for growth and job creation through affirmative procurement. SOEs are important strategic financial actors in South Africa, and their restructuring has released significant financial resources for social and economic programmes throughout the country. SOEs have for example succeeded in escalating the procurement of goods and services from Black Owned companies, building a strategic supplier base and ensuring its long-term sustainability.

SMMEs represent an important vehicle to address the challenges of job creation, economic growth and equity in the country. Globally, one finds that SMMEs are playing a critical role in absorbing redundant formal labour, penetrating new markets and generally expanding economies in creative and innovative ways. This is in line with the Government's legislated Black Economic Empowerment (BEE) framework to address the injustices of the past and to bring Black people into the mainstream economy.

This research report assesses the perceptions of Black SMMEs regarding the level and type of support given by SOEs, particularly Eskom, through its implementation of affirmative procurement. The study reviews the merits of these perceptions through a review of appropriate literature, quantitative research methodology and research findings, which explore and review government socio-economic objectives.

The results suggest that, in general, most suppliers are satisfied with the level of support given by Eskom but more could still be done to promote Black Women Owned companies. The majority of Black Women Owned enterprises appear not to be aware of the range of services provided such as the Advice Support Centres. The reasons for this lack of awareness could be many and varied, but Eskom management will need to consider steps to remedy this situation. One recommendation is that Eskom initiate a monitoring and support system to ensure awareness and accessibility to support centres by all its suppliers.

The results find further that some Black SMMEs are not very conversant with financial matters. It is therefore suggested that Eskom embark on an educational campaign to raise the level of awareness in this regard.

In conclusion, Eskom's endeavours are viewed very favourably, and could be emulated by the private sector as a successful socio-economic strategy