About R150 billion will go to small black-owned businesses annually, says the Minister in the Presidency Jeff Radebe.
Radebe made the revelation while he was commenting on the new radical economic policy President Zuma announced.
The President during his State of the Nation Address (SONA) remarked that his government will concentrate on narrowing the inequality gap between the rich and the poor through what he described as “radical economic transformation.”
“…The gap between the poor and the rich is widening…We want the country to move forward. We want to get rid of the three challenges that face us… these are the critical challenges that if we do not resolve them, we have not resolved the issue of freedom.
“And therefore, it has become absolutely important as to what is it do we do in order to achieve prosperity. It is therefore important for us to say – how do we make our policies work more effectively?
“There can be no sustainability in any economy if the majority is excluded in this manner. (The) skewed nature of ownership and leadership patterns needs to be corrected,” Zuma stated.
With that, he argued that it’s more than ever, necessary for government to radically transform the economy and make it more inclusive for black South Africans, women and youth.
Mr President indicated that his government would be using levers such as legislation, licensing and budgets to enable the radical transformation.
Defending the radical economic transformation initiative, Radebe offered that not fewer than R150 billion would go to small black-owned businesses once the bill that would make it a must for big contractors to subcontract 30% of business to black-owned enterprises is enacted.
Noting that the regulations regarding the subcontracting was finalized and gazetted in January, the Minister contended that big businesses wouldn’t frown at the 30% subcontracting initiative.
“(Big) business has been working hand in hand with government,” he said. “Last year, when the country was facing the possibility of an economic downgrade, it was business that joined us to ensure we avoided the downgrade.”
The Minister also argued that the initiative would strengthen South Africa’s economy and, specified that President Zuma isn’t sole force driving the transformation agenda.
He said: “the lexicon of radical economic transformation first entered our space towards the last ANC conference in Mangaung in 2012.
“If you look at the success of egalitarian societies, such as in the Scandinavian countries, you will find that there was no magic that made them succeed. All they did was to open up for small businesses to play a bigger role in the economy,” Radebe added.
Above all, the Minister indicated that the Finance Minister Pravin Gordhan would elaborate on the financial implications of the radical economic transformation.
“This is not just a wish list. All these ideas and plans were discussed during the Cabinet lekgotla and have been taken into account in the budgets of the line departments,” Radebe finished.