Maile earmarks 60% of Gauteng procurement for local businesses

Locally owned businesses will be receiving the bulk of procurement benefits offered by the provincial government.  

MEC for Finance Lebogang Maile assured Gauteng business owners that billions would be circulated throughout the province’s economy in the coming years.

Maile made the statement at the launch of the R500 million Spaza Shop Support Fund (SSSF) in Soweto on Tuesday.

R30 billion procurement budget

The SSSF will see registered and approved South African-owned small businesses empowered with financial and non-financial aid.

Financial support will come in the form of stock and equipment purchases, while non-financial support will be focused on skills training and compliance.

To create a complimentary business environment, Maile said that increasing industrial capacity and integrated interprovincial networks needed to be amplified by financial investment.

“We’ll focus on building productive capacity across the province. Even with that capacity, if we don’t coordinate and align our efforts, it won’t be effective.

“That’s why, as part of our commitment, 60% of our procurement budget, amounting to over R30 billion annually, will go to locally based enterprises,” stated Maile.

Johannesburg mayor Dada Morero welcomed the statement and the potential effect it would have on the region.  

“We all know that when Johannesburg grows, Gauteng grows. When Gauteng grows, South Africa grows. And when South Africa grows, the African continent grows,” said Morero.

More than 87 000 spaza shops registered

The SSSF will be managed by the National Empowerment Fund and Small Enterprise Development Finance Agency.

The spaza shop registration drive has seen 87 400 enterprises counted so far, but only half of them will be eligible for the SSSF.

The fund is for South African-owned businesses only, and only 53% of the registered enterprises are locally owned.

Small Business and Development Minister Stella Ndabeni-Abrahams urged SSSF recipients to form networks that could compete with foreign-owned stores.

“South African-owned spaza shops also face intense competition from foreign-operated spaza shops, who use more organised supply chains to gain competitiveness,” the minister stated.

‘Incubators’ for start-ups

Supporting local will be the overall theme of the SSSF as recipients will be encouraged to trade with township and rural enterprises, while lessening the purchase of imported products and trade with established retailers.

“The fund will address economy of scale disadvantages by linking spaza shops to buying groups for aggregation and bulk purchasing,” stated Ndabeni-Abrahams.

“We have incubators that help new and startup businesses. We can help you from being an informal trader to a formal trader, to start a spaza shop and to own a wholesale or an entire distribution channel,” the minister concluded.

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