New legislation set to benefit small business

Thursday, March 9, 2017
North West Premier Supra Mahumapelo

Known as the platinum province due to its rich mineral wealth, the North West is no doubt the jewel of South Africa.

However, despite its riches in minerals, there has been a feeling in recent years that the wealth of the province has not always benefited the majority of its residents.

Like the other eight provinces in South Africa, unemployment, poverty and inequality are some of the challenges facing the North West.

The legacy of apartheid still lingers and most of the province’s people reside in fragmented towns, villages, townships and the so-called small dorpies, making it difficult for the majority to find work due to the costs of travel.

But a new legislation is set to change this. Businesses in the villages and townships of North West are expected to get a much needed boost with the introduction of the legislation that is aimed at spurring the economy in these areas.

Tabling the State of the Province Address (SOPA) recently, Premier Supra Mahumapelo announced that the province will soon table the Village, Township, Small Dorpies (VTSD) Preferential Procurement Bill.

The Bill, which will be tabled in the North West Provincial Legislature, will force both the state and private companies to spend 70% of their procurement budgets to procure goods and services in villages, townships and small dorpies.

Premier Mahumapelo said the provincial government would table the bill to ensure that it comes into operation on 1 April 2017.

“This is in line with the new financial year 2017/18 and government is still committed to achieving the 70% procurement,” said Premier Mahumapelo.

The Bill comes as Premier Mahumapelo has expressed concerns that the provincial economy may fall victim to the mining sector’s demand shocks which are of an external nature. Mining remains a significant key contributor to the provincial economy.

 “It is therefore urgent that the state should use its legislative and regulatory authority as empowered by the Constitution and relevant legislation to ensure that the majority of the people in this country who are black and Africans in particular are not relegated to only be beneficiaries of social grants but are included and benefit from the wealth generated by our economy,” explained Premier Mahumapelo.

The Premier stated that in sectors of the economy where government may not have direct fiscal control, legislation and regulations would be used to ensure that private companies do not avoid their legal obligations when it comes to transformation and preferential procurement.

Speaking to SAnews, North West provincial government spokesperson Brian Setswambung said while there may be delays with the tabling of the bill, the province is still targeting its implementation in the new financial year beginning in April 2017.

As part of its efforts to implement the country’s National Development Plan (NDP) 2030, which is the blueprint for South Africa’s development, the province has had a policy to ensure the procurement of goods and services from villages, townships and small dorpies.

Setswambung noted that while policy has been in existence, not all role players have been adhering to the policy that requires both the state and the private sector to procure their goods and services from the VTSD areas, hence the formulation of the bill.

In the SOPA address, Premier Mahumapelo reported that VTSD procurement expenditure by provincial departments as at 31 December 2016 amounted to R1.1 billion for VTSD areas.

“For the period of December 2016, of the R1.070 billion, R992 million was paid in 21 days and the remaining within 30 days in compliance with the Public Finance Management Act (PFMA) and Presidential pronouncement,” said Premier Mahumapelo.

The bill forms part of plans by the province to ensure that all in the province benefit from the economy as is stated in the NDP that South Africa needs an economy that is more inclusive, dynamic and in which the fruits of growth are shared equitably.

“The provincial government is concerned that people in rural areas are not benefitting, hence [we plan to introduce] the bill,” said Setswambung.

To date, the provincial government currently procures 60% of their budgets from the VTSD areas that are made up of 629 villages, 99 townships and 33 small dorpies.

The provincial government is of the view that the Bill will also go a long way in curbing the migration of people from the rural areas to urban areas. –




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