Transformation more than just compliance

Transformation is far more than just BEE compliance. It is more about encouraging existing businesses to find ways of supporting small business, pulling in the thousands of informal businesses that exist in the automotive aftermarket sector.

According to Jakkie Olivier, CEO of the Retail Motor Industry Organisation (RMI), 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.  Significantly for every small and informal business successfully converted and absorbed into the formal sector, 5 jobs are likely to be created. Each of these newly employed people in turn, financially support another 20 people on average in the process,” he says. 

Olivier says future employment will not come from the large manufacturers but from the smaller businesses so it is imperative there is 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 (Small Enterprise Development Agency), AIDC  (The Automotive Industry Development Centre) and NAAASP (National African Association of Automobile Service Providers) 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,” he says.

“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, RMI has over the last couple of years recruited a number of informal businesses.  “At present we have 325 such members on our books who we believe have the potential, with proper support, to transform over time. Other successes included 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.

“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,” concludes Olivier.