Extract from SONA
The empowerment of women is critical to inclusive economic growth.
We are introducing the SheTradesZA platform to assist women-owned businesses to participate in global value chains and markets. Over the next five years, the Industrial Development Corporation is targeting R10 billion of own and partner funding for women empowered businesses.
To create a larger market for small businesses, we plan to designate 1,000 locally produced products that must be procured from SMMEs. The Procurement Bill will soon be presented to Parliament as part of our efforts to empower black and emerging businesses and advance radical economic transformation.
Comments on the Extract
A lot work is still required for small businesses in general to participate in the South African economy. The government procurement process still favours the big established corporates. The procurement process in the private sector also favours the big established corporates.
Even more aggressive initiatives are required for black women-owned businesses to participate firstly, in the South African economy by encouraging the private sector and government to procure services from them, and in international trade.
The reality in business is that people procure services/products from people they know, it boils down to your networks. This can be done intentionally to exclude women, but it can also be unintentional. The procurement personnel are given a mandate to look for a supplier or a service provider within a short space of time and the most natural reaction is to contact the people they know, who are top of mind. There are also KPIs attached to finding a supplier or service provider who can deliver on the work assigned, and personnel will therefore look for big corporates who have a track record.
The shortcomings with this approach are as follows:
- The decision makers in both private sector and in government are still mostly men, and men in these positions will not know a lot women because men and women do not socialise together, the men will end up giving the contract to the men they know because they are top of mind;
- Even in cases where the decision makers are women, they will also not know a lot o f w o m e n because women tend not be well socialised, as they have time constraints due to family commitments.Furthermore, on the gatherings women have, the topical issue is always family and relationships. As a result, women might know women in their circle for a long time but not know what business they are doing. Men tend to discuss business issues when they gather.
- On procurement proposals there are points allocated for experience as a business, and this does not consider the personal work experience of the Women fall short on the experience because they were never given the opportunity in the first place. As men participate in trade, they gather experience and are always ahead of women, and eventually when women-owned businesses are recognised they lack capacity and experience in the production of products or provision of services. To have capacity and experience one needs to actively participate in business contracts.
Empowering women requires someone who has taken a resolve to find them and work with them and is intentional about doing so. Women are intelligent and make wonderful committed suppliers or service providers, they just need to be awarded proper business deals. Therefore, a platform like SheTradesZA for women-owned only businesses is a great initiative by the President to enable private sector and government to find the women-owned businesses easily. Education is also needed to assist women on the requirements of international trade, the SheTradesZA platform should hopefully contain educational material on this.
Another problem is that big business contracts are awarded to men and the small business contracts are awarded to women. In this radical economic transformation, the Rand value of contracts awarded should be used as a measure and not the number of contracts awarded to women.
Also, when looking to start a business, expand an existing or even buy equity into a business, funders require business contracts experience and that you contribute a portion of your own money into the business. As mentioned before women come short on experience compared to men. In additional to that, women generally do not have the funds. The current cohort of entrepreneurs come from corporates where they were employed full time. As we all know that in the corporate sector women do not occupy top positions and this means they do not get high salaries, and even in cases where they are in top positions the salaries are lower than their male counterparts. This means that the savings women can make to prepare for the transmission into entrepreneurship are lower than that of men, this means the required contribution women can make is also lower. The R10 billion funding that will be made available to women through the Industrial Development Corporation should consider these realities.