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Here’s what EU investors think of SA’s empowerment policies
As South Africa is working on building back better after being battered by COVID-19, government ministers are on a journey to rebuild their departments. The aim is to bring back people’s trust of government and the public sector. One of the channels that the government is using to achieve this goal, is the National School of Government. CNBC Africa’s Godfrey Mutizwa spoke with Senzo Mchunu, Minister of Public Service & Administration.
Fri, 06 Nov 2020 07:49:37 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- EU investors emphasize the challenges faced by SMEs in meeting strict ownership requirements and suggest recalibrating the scoring system to focus more on skills development and socioeconomic impact.
- Concerns were raised about the complexity and frequent changes in the Black Economic Empowerment (BEE) policies, leading to ambiguity and increased compliance costs for businesses.
- Recommendations include giving more weight to skills development, offering flexibility in ownership requirements for SMEs, and providing bonus points for initiatives like incubation programs and mentorship to attract EU investments.
South Africa is currently in the process of rebuilding and restoring trust in its government and public sector following the challenges brought by the COVID-19 pandemic. As part of this journey, the National School of Government is being utilized by the government to enhance the capabilities of its departments. In a recent interview with CNBC Africa, Senzo Mchunu, the Minister of Public Service and Administration, discussed the empowerment policies in the country and the perspectives of European Union (EU) investors on these policies. Roberto, representing EU investors, highlighted some key concerns and recommendations regarding the current empowerment policies in South Africa. One of the primary challenges highlighted was the ownership requirements that pose difficulties for small to medium-sized enterprises (SMEs) in both South Africa and the EU. Roberto emphasized the importance of recalibrating the scoring system of the policies to shift focus from strict ownership requirements to skills development and socioeconomic impact. He proposed giving more weight to skills development, flexibility in ownership requirements for SMEs, and additional points for initiatives such as incubation programs and mentorship. These recommendations aim to attract more investments from EU companies while promoting economic transformation in South Africa. However, concerns were also raised about the complexity and frequent changes in the Black Economic Empowerment (BEE) policies. Roberto mentioned that the evolving nature of the policies, with new scores, weightings, and percentages being introduced periodically, adds a layer of ambiguity for businesses. This complexity not only makes it challenging for companies to stay compliant but also increases the cost of compliance as they often need professional assistance for verification. The call for simplification of rules and weightings in the BEE policies was echoed by EU investors, emphasizing the need for a more streamlined and transparent framework. The discussions between EU investors and the Department of Trade and Industry (DTI) are ongoing to find a balance that fosters economic transformation while remaining attractive to foreign investors. As South Africa aims to recover from the impacts of COVID-19 and attract foreign investments to fuel its economic growth, the adaptation of empowerment policies based on the recommendations provided by EU investors could play a crucial role in achieving these objectives. The collaboration between stakeholders and government entities in recalibrating the policies to better align with the needs of SMEs and promote skills development reflects a step towards building a more investor-friendly environment in South Africa.
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