The time for revving up the pace of transformation and providing support for smaller businesses within the informal automotive sector is now. This was the strong underlying message at an RMI Economic Transformation event attended by key industry and government stakeholders this month (November).
Key stakeholders such as SEDA (Small Business Development Agency), NAAASP (National African Association of Automobile Service Providers), AIDC (Automotive Industry Development Corporation), merSETA and the DTI, were all present. Jakkie Olivier, CEO of the Retail Motor Industry Organisation (RMI), emphasised the fact that transformation is far more than just BEE compliance. “It is much bigger, and, as a leading voice in the automotive aftermarket sector, the RMI wants to encourage existing businesses to find ways of supporting small business, pulling in the thousands of informal businesses that exist in the sector.” Eighty percent of accredited RMI business owners are in fact small to medium size business owners and this is where the growth and employment opportunities that are going to drive the economy will come from. “If we can start migrating the informal business into the formal sector so that they become compliant and meaningful contributors to the economy, we will have a far stronger sector,” he says.
It was agreed that future employment would not come from the large manufacturers but from the smaller businesses so it was imperative there was a meeting of minds and a plan to use the funds available from the private sector and discretionary grants from Government to develop the necessary skills and training infrastructure. “It is critical that we strengthen our current partnerships with agencies like SEDA, AIDC and NAAASP so that we can provide an environment in which small business programmes can thrive,” says Olivier. One of the challenges of the initiative is the ability to find ways of keeping township business within the townships. “We need to supply the right skills training and equipment support so that this revenue can stay within the informal sector and can start making a meaningful contribution to overall economic growth.”
“We recognise that the RMI needs to partner with others in order to accelerate transformation. Up until now we have had great initiatives with TVET and training institutes and with Government, as well as encouraging youth employment through the YES (Youth Employment Service) programme and encouraging employment through the automotive value chain of the RMI, its constituent associations and membership but we need to do more.”
“We want to provide more procurement opportunities to black businesses by creating a platform to link established businesses and corporates with black-owned SMEs,” says Joy Oldale, the RMI’s Transformation Director.
“We’ve initiated a training programme for small businesses in this sector to bridge them from the informal to formal sector, and are trying to facilitate access to funding where small and informal businesses can acquire the necessary tools and equipment to become RMI accredited and compliant.”
Through various initiatives and national roadshows, the RMI signed up 325 informal businesses as development members. Other successes include a RMI pilot programme funded by merSETA to train 42 businesses in new venture creation and a Memorandum of Understanding (MoU) between the RMI and SEDA to provide coaching, mentoring and leadership training to all NAAASP members – all offered free of charge by SEDA.
The success of this was reinforced by Isaac Boshomane from Khabo Cars and a NAAASP member himself. Boshomane is a strong proponent of big and small businesses working together to close the gap between theory and practice. Boshomane is also adamant that there is no room in the industry for an entitlement mentality. He has already trained 60 artisans from the township and will be training a further 63 – 16 of which are women. He will be opening businesses for nine of these women to work together, almost in a co-operative manner, but to succeed they will need infrastructure and financial support, initially from Tshwane Government.
Sheryl Pretorius, Chief Operating Officer of merSETA, responsible for, amongst others, the retail motor industry, says race and gender transformation statistics from sector skills plans still remain a bit skewed. Up to March 2018, 76.4% of employees were male, and 60% black African, 22% white, 13% coloured and 5% Indian. However, whites dominate between 60% and 49% of upper and middle management respectively, while people with disabilities represent only 2% compared to the target of 7%.
“Yet 91% of all learners registered in 2017 were non-white. There have been slight improvements in representation, but it is not sufficient,” she says.
Closing remarks from Jacob Maphutha, DTI Chief Director and Head of the B-BBEE Policy, summed up the challenge, saying it was now time for plans to be taken off the table and put into action. Implementation with clear targets and milestones were key. “Transformation, growth and investment are all inextricably linked and we need to pull as many participants into the mainstream economy as possible. We need to increase the aggregate so we can build world-class, black-owned enterprises which also empower their employees and workers through meaningful ownership. We can only do this through valuable public-private partnerships with organisations like the RMI and its affiliate partners.”