Latest news with #SMMEs
IOL News
28-05-2025
- Business
- IOL News
B-BBEE ICT Sector Council raises alarm over new BEE policy proposals
Concerns mount as B-BBEE policy changes threaten ICT sector transformation Image: Supplied The B-BBEE ICT Sector Council has voiced strong concerns regarding recent B-BBEE government policy proposals that could undermine South Africa's ongoing efforts toward inclusive economic transformation within the ICT sector. In a statement issued Tuesday evening, the council welcomed the Minister of Communications and Digital Technologies' announcement to open new individual electronic communications network service (IECNS) licenses but raised serious concerns. The recent gazetting of a new B-BBEE policy, which could potentially facilitate the entry of companies like Starlink, comes after a high-profile meeting between President Cyril Ramaphosa and US President Donald Trump, whose delegation included Elon Musk, the owner of Starlink. 'We see this as an opportunity to expand market access and promote increased participation of small, medium, and micro enterprises (SMMEs), provided it is implemented within a robust transformation framework,' the Council stated. However, their optimism was sharply tempered by apprehensions about accompanying policy proposals to allow Equity Equivalent Investment Programmes (EEIPs) to replace the legislated 30% Historically Disadvantaged Individual (HDI) ownership requirement set out in the Electronic Communications Act (ECA). The Council warned that 'introducing EEIPs as an alternative to the 30% HDI ownership requirement could reverse the fragile gains made in sector transformation,' risking a resurgence of exclusionary practices. In their statement, they stated that the ownership requirement under the ECA serves more than just compliance; it is a statutory tool designed to promote direct ownership and control by historically disadvantaged South Africans, reflect the country's demographic priorities, and support inclusive economic growth. 'This mechanism ensures that licensees contribute to infrastructure roll-out, universal access, and broad-based redress - not charity or peripheral impact,' the Council explained. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Alarmingly, the council said that some actors opposing these measures have historically resisted BEE and other transformation efforts, raising questions about their motivations. 'These developments threaten to sideline South Africa's legal framework and long-standing transformation objectives,' the statement warned, adding that some local beneficiaries of B-BBEE are now advocating measures that could exclude the very communities they were meant to uplift. The Council rejected the current form of EEIPs, citing 'glaring gaps' in transparency and measurable impact. The organisation stated that adopting such programs could set a dangerous precedent, allowing dominant incumbents and multinational corporations to bypass local ownership requirements while reaping the benefits of operating in a strategic sector. Potential Risks and Broader Implications The institution highlighted several risks associated with these proposed changes arguing that, first and foremost among them - is the threat to local industry and jobs. 'An infrastructure-light, foreign-controlled model risks decimating local Internet Service Providers (ISPs), SMMEs, and Wireless Internet Service Providers (WISPs), especially in underserved rural areas,' the Statement cautioned. It argued that such a shift could undermine national broadband initiatives like SA Connect and lead to South Africa's digital payments flowing out of the country without contributing to local economic development. Moreover, the council warned that establishing these principles in the ICT sector could set a dangerous precedent for other strategic industries with B-BBEE ownership requirements. 'This could weaken empowerment models across various sectors, undermining meaningful economic participation by historically disadvantaged groups,' the statement cautioned. Calls for Transparency and Upholding Transformation Principles The ICT council demanded a comprehensive review of EEIPs, emphasising that their impact on sector transformation remains marginal and unaccountable. They called for mandatory, transparent public reporting on EEIP performance, including sector oversight and measurable Key Performance Indicators (KPIs), to prevent fiscal opacity and ensure tangible impact. Additionally, the council urged clarity on how new licensees will contribute to the Universal Service Fund and align with the mandate of the Universal Service and Access Agency of South Africa (USAASA). 'Any exemption from contributing to the fund risks creating unfair economic asymmetries and impeding efforts to bridge the digital divide,' the statement read. The Council appealed to the government to uphold the constitutional and developmental vision of economic justice. 'Transformation is a moral, constitutional, and legislative imperative. It cannot be sacrificed for expediency, foreign lobbying, or narrow commercial interests.' According to the institution, the B-BBEE ICT Sector Council intends to submit a formal response during the 30-day public consultation period, urging all stakeholders committed to genuine transformation to review and contribute to the dialogue. They argued that while ICASA is expected to consider the Minister's policy directions, these do not preclude comprehensive sector input. When contacted for comment, Ramasela Matlou, an ICASA spokesperson, stated that the regulator has noted the policy directive and is currently reviewing its contents. Matlou added that Starlink has not yet applied to enter the South African market. IOL Politics
The Herald
23-05-2025
- Business
- The Herald
Innovate Africa: Zazu makes banking simple for Africa's SMMEs
Zazu is a new digital bank launching in South Africa with one clear goal: to make life easier for small businesses in Africa. Built by former Solaris executives Germain Bahri and Rinse Jacobs, Zazu offers more than just a bank account. It gives SMMEs access to tools such as digital company registration, invoicing, expense tracking and real-time cash flow insights — all in one place. I sat down with co-founder Germain Bahri to find out what this means for you. 'We're building a bank around the real needs of African businesses — simple, transparent and easy to use,' he told me. With more than 300 businesses already signed up during its soft launch, Zazu is positioning itself as a practical, no-nonsense alternative to traditional banking. It's a big step forward for entrepreneurs tired of red tape and outdated systems. TimesLIVE
Mail & Guardian
17-05-2025
- Business
- Mail & Guardian
Transformation fund introduces new empowerment codes for transport sector
Trade, industry and competition minister Parks Tau. (Photo: X) Minister of Trade, Industry and Competition ( t he Dtic ) Parks Tau said on Friday that the R100 billion transformation fund will set aside resources for black-owned businesses operating within the transport sector. 'Too many businesses remain on the margins. We must double down on efforts where transformation has stalled. Enforcing existing codes will lead to deeper integration of the sector,' Tau said. Small, medium and micro enterprises (SMMEs) account for about 90% of businesses in South Africa, yet many are unable to access opportunities due to high asset requirements and limited credit histories, he said. The sector-specific fund will allocate resources for inclusion and capacity building in aviation, rail and ports. Tau said the fund will facilitate market access and provide export-readiness programmes with the goal of ensuring that the benefits of modernisation reach all stakeholders. In March, Tau proposed the creation of a R20-billion-a-year transformation fund in a concept document currently open for public comment. The goal of the fund is to promote the participation of black-owned enterprises and marginalised groups such as women, youth and persons with disabilities. The transformation fund has received criticism for repeating race-based legislation after 30 years of democracy, which has had disputed outcomes. A distinguishing feature of this new initiative is its explicit focus on high-risk rural and township enterprises, which have previously been neglected. Minister of Transport Barbara Creecy said the draft transformation fund and integrated sector codes will consolidate support for better outcomes in broad-based black economic empowerment (B-BBEE). Creecy stated that the logistics and freight subsectors remain largely untransformed, and that increasing the participation of black-owned businesses will have a positive effect on economic inclusion. The sector-specific fund will also focus on financing for taxi recapitalisation and aligning provincial regulatory frameworks. The government has therefore honed in on inclusion as the solution to unemployment and stagnant economic growth, while critics have said corruption-inducing BEE is the cause of joblessness. The new sector codes propose an equity-equivalent programme for multinationals and the removal of BEE recognition for companies that lose black ownership. Board voting rights held by black individuals will increase from 50% to 65%, and specialised technical positions will be reserved for junior black managers. The transport fund will deploy debt, grant and equity instruments to diversify economic activity beyond urban centres. The fund will therefore target support for rural and township enterprises operating outside of traditional value chains. The government's contribution will serve as seed capital to leverage further private sector investment. The fund also seeks to address the practice of superficial compliance aimed solely at avoiding penalties, which the government says undermines genuine transformation and meaningful market participation of black people. In response to the fund, the South African Institute of Race Relations (IRR) said that BEE legislation amounts to race quotas that have led to the decline of state-owned entities. The IRR argues that using race as a proxy for disadvantage is unfair and illegal, and that the government should follow the non-racial ethos of the Constitution. The IRR has also praised the Democratic Alliance for challenging employment equity laws in court. The institute believes that less race-based legislation and more investor-friendly policies will drive economic growth and reduce unemployment. However, the Black Management Forum (BMF) has said that in a country where 81% of people are black, with most living in poverty, neoliberal, trickle-down economics would not resolve this crisis and therefore the government should build the kasi economy. The BMF has criticised the World Bank for suggesting that South Africa should roll back its BEE policies to attract foreign investment. The bank argued that the country's excessive affirmative action regulations need to be overhauled for the country to grow, while the BMF said the private sector should carry a significant burden of the country's economic woes. The forum also criticised Old Mutual for appointing Jurie Strydom in May as chief executive, calling it a setback for transformation in a statement. 'As an institution with deep African roots and a significant continental footprint, Old Mutual is expected to reflect South Africa's diversity at all levels of leadership, particularly the executive level,' said the statement. Business Leadership South Africa (BLSA) welcomed the fund's intent but raised concerns over past empowerment failures, including weak risk management and poor recovery of allocated funds. The organisation said too much time had been spent on funding mechanisms and too little on mentorship and capacity building. The BLSA urged the government to clearly articulate how the final fund design will move beyond financing to achieve long-term transformation outcomes.
Mail & Guardian
12-05-2025
- Business
- Mail & Guardian
Blockchain-based financial reporting has potential to empower SMMEs
Block-chain can eliminate the need for expensive and time-consuming manual audits. In South Africa, where economic volatility, high youth unemployment and tightening fiscal space continue to define the national mood, small businesses are often hailed as the engines of inclusive growth. But despite their potential, SMMEs (small, medium and micro enterprises) face a host of structural barriers, chief among them is the high cost of compliance. Financial audits, though crucial for credibility, funding and tax alignment, are often prohibitively expensive for small players operating on razor-thin margins. Enter Audits are traditionally backward-looking. Financial statements are compiled, reviewed manually and reconciled, often months after transactions occur. The process is time-consuming, labour-intensive and expensive. For a small business juggling payroll, marketing, operations and growth, a full-scale audit can feel like a detour it cannot afford. Blockchain challenges this model by creating a continuously updated, decentralised ledger of transactions that is both immutable and accessible in real-time. Once a financial event is recorded, whether it's a payment, invoice or expense, it is time-stamped, cryptographically secured and visible to relevant parties. This system of 'trustless' verification can dramatically cut the need for costly manual audits. According to For auditors, this doesn't spell obsolescence, it marks a reorientation. Auditing becomes a process of overseeing system design, exception reporting and real-time analytics, rather than combing through reams of paperwork to catch historical errors. This aligns with the broader academic consensus that blockchain will shift auditors' roles toward more analytical and consultative functions. What makes this shift profound is not just the technical architecture but the access it enables. In today's economy, formal compliance is often the ticket to growth. Without it, entrepreneurs can't access bank loans, apply for government tenders or attract investors. Yet, for many SMMEs, especially in townships and rural areas, the cost of accounting services alone keeps them locked out of formal financial channels. Blockchain-based reporting tools, when integrated with mobile platforms and user-friendly interfaces, can help such businesses create verifiable financial histories automatically, with minimal overhead. Imagine a spaza shop owner generating a blockchain-secured income statement simply by using a mobile point-of-sale device. Or a freelance creative sharing tamperproof payment records with a bank to apply for credit. This is more than digitisation; it is economic inclusion. South African start-ups, particularly those in tech, logistics and renewable energy, often rely on international investors and accelerators. But cross-border funding comes with strings attached — transparency, traceability and accountability. The traditional approach, hiring auditors, preparing reports, verifying bank statements, is not only slow but often distracts lean teams from their core innovation goals. With blockchain, start-ups can maintain real-time ledgers visible to investors, regulators and even customers. By integrating smart contracts and self-executing agreements coded on the blockchain, they can automate not just payments but compliance checks, tax deductions and milestone-based funding disbursements. For a Cape Town fintech looking to scale across Africa or a Limpopo agri-tech start-up pitching to a Dutch venture capitalist, this kind of digital credibility could be game-changing. Blockchain holds strong promise for enhancing trust between stakeholders and ensuring tamperproof assurance mechanisms, especially in high-stakes environments. While the most dramatic benefits are likely to be felt by small businesses, the implications for large firms and public institutions are equally significant. Corporates could streamline internal controls, reduce fraud risk and shorten audit cycles, savings that can be redirected toward innovation, training and social investment. Real-time auditing can also reduce insider risk, particularly in sectors like procurement, mining and construction, where complex supply chains often obscure financial accountability. In the public sector, blockchain-based reporting could transform how the government tracks budgets, monitors expenditure and audits departments. Although the adoption curve is steeper, the potential is enormous. Real-time visibility into departmental spending could not only reduce audit backlogs but offer a bulwark against corruption, something South Africa has learned, painfully, is not a theoretical risk. As identified in the literature, blockchain adoption in the public sector could foster a new era of financial accountability, especially when paired with capacity-building and digital infrastructure investment. There are secondary gains, too. With integrated tax logic, blockchain systems can automate VAT calculations and submissions. They can allow businesses to access real-time dashboards showing profit margins, tax liabilities and risk exposures. And, as regulatory clarity grows, they can help build investor trust, not just locally, but globally. Importantly, this is not about surveillance. Data permissions can be managed to protect privacy while still allowing selective transparency for those who need it, be it funders, banks or auditors. South Africa is not short on challenges. But it also isn't short on creativity, talent and digital capability. The opportunity now is to rethink financial infrastructure, not just as a system for big banks and corporations, but as a shared utility for every entrepreneur, every co-op and every side hustle. To get there, we need collaboration — from the South African Revenue Service to local fintechs, from regulators to township incubators. We need sandbox testing, education and low-cost blockchain platforms that meet people where they are. Blockchain-based financial reporting is not a panacea. But it can shift the narrative, from gatekeeping to accessibility, from inefficiency to automation, from distrust to verifiable truth. And in a country where trust is both fragile and vital, that might just be its most powerful feature. Yonela Faba is a University of Cape Town PhD student and writer with blockchain, finance and policy analysis expertise. He has a background in academia and banking. Linkedin: Yonela Faba.
