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Tender Process For The Tough-Minded

Speaking of transparency in the same sentence as tendering to government; surely not? Chartered accountant [CA(SA)] Julius Mojapelo, Senior Executive for the Public Sector, at the South African Institute of Chartered Accountants (SAICA) sets the record straight.

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Speaking of transparency in the same sentence as tendering to government; surely not? Chartered accountant [CA(SA)] Julius Mojapelo, Senior Executive for the Public Sector, at the South African Institute of Chartered Accountants (SAICA) sets the record straight.


There are many Small, Medium and Micro Enterprises (SMMEs) doing honest deals with government, through a legal, transparent process of procurement and Tendering.   

But the truth is that by far the majority of SMMEs steer well clear of government even though BBBEE and tendering rules favour them. As important as it is for tender processes to be above board for SMMEs who find these processes onerous enough, SMMEs generally don’t look for business from Government at any level for a much more critical (to them) reason. They do not on average get paid on time by public institutions. 

And as a result, over 80% of SMMEs don’t do business with government at any level.

This was among the findings of the 2016 SMME Insights Survey conducted by SAICA, which is the most recent research on the topic by the institution. 

The SMME Insights Survey is a substantive study, which has been conducted annually since 2014.  The average turnover of these enterprises is R10.9 million, with a third employing between six and 49 people. These companies are, according to the National Development Plan, the country’s only hope of reducing unemployment and poverty and of boosting our failing levels of gross domestic product.

Related: How To Make A Success of Tendering

Among the survey’s critical conclusions is that SMMEs (and by extension our country) could flourish if the tender process was simplified and made more transparent, and if government and big business paid their accounts on or before 30 days. 

Public finance management capacity building

In the light of the low uptake by SMMEs in tendering for government contracts and the often bemoaned slow payment by government it is heartening to learn that SAICA is working with government to improve public finance management capacity. 

But what, exactly, is being done?

“Providing public finance management capacity building support is a priority at SAICA,” says Mojapelo. “This involves collaboration with public sector institutions to help them improve financial management systems and processes to ensure sustainable service delivery.” Paying SMMEs on time would be one of the outcomes.

“SAICA is also educating SMMEs and SAICA members who interact with SMMEs on the process of doing business with government. This makes it easier for SMMEs to tender for contracts.”

But with slow payment by government a concern for many SMMEs is Mojapelo optimistic about a turnaround? “I see signs of government’s commitment to turning the situation around, through recent legislation and measures,” he confides. 

“Among them,” explains Mojapelo, “Treasury Regulations 8.2.3 states that, unless determined otherwise in a contract or other agreement, all payments due to creditors must be settled within 30 days from receipt of an invoice or, in the case of civil claims, from the date of settlement or court judgement.” 

“Specifically; these measures include establishing a dedicated call centre within National Treasury to assist institutions and affected suppliers in resolving non-payment of suppliers/creditors appointed through the supply chain management process.” 

Tellingly, National Treasury will provide quarterly reports to parliament regarding the non-payment of creditors within 30 days, and make the reports public. 

While this is a step in the right direction, SMMEs remain unconvinced about doing business with government. The proof of the pudding it seems will only emerge in the eating.   

Facilitating payment of long standing government debtors

Mojapelo sympathises with the plight of SMMEs, struggling to get payment from government.  

“The Small Enterprise Development Agency payment assistance hotline is a very important platform that SMMEs can use to facilitate payment of long outstanding payments from public sector institutions (www.seda-smme.co.za),” says Mojapelo. 

And current legislation protects SMMEs in instances of slow payment.

Related: Engineering Consulting Business Plan Sample

“Should entities fail to comply with the 30 days payment terms, this will result in non-compliance with the Public Finance Management Act and Treasury Regulations,” explains Mojapelo. 

In the words of Lindiwe Zulu, Minister of Small Business Development in a budget speech earlier this year, “National Treasury has gazetted the revised Preferential Procurement Regulations in January 2017, which encourages Government and its entities to procure at least 30% of goods and services from SMMEs and Cooperatives.” 

But, as the Minister observed, “The contribution of SMMEs to the South African economy is far below its potential.”

“According to the Quarterly Financial Statistics Report, the private sector earned a total of R2.3 trillion in the last quarter of 2016. Large businesses…contributed 60% to this total, followed by small and medium businesses at 40%.”  

“We need to do better and match the global average which shows that small businesses share higher levels of participation in various economies. This is possible if we heed the President’s directive to set aside 30% of government procurement budget of around R600 billion towards SMMEs and Cooperatives.”

SMMEs might be tempted to reply to Minister Zulu that “the contribution of government to encourage SMME involvement by paying its bills on time is also far below its potential.”

The ball, it seems, is firmly in government’s court. There is no chicken and egg situation here. If government pays on time SMMEs will engage in droves. 

The continued growth of SMMEs rests on government’s commitment to delivering on tender and payment policy.  Everyone’s a winner when we create jobs through transparent tenders, fairly awarded, and where work is paid on time.

SMMEs wanting to report slow payment by government may call 0860 766 3729.  

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Dream Big – Engen Dealer Lydia Ramatisa

All the odds were stacked against her, but Engen service station owner Lydia Ramatisa is proof that with hard work, commitment and passion, success is indeed possible.

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Lydia Ramatisa, franchisee at Engen’s Orkney Convenience Centre in Klerksdorp in the North West, could easily have become yet another teenage-mother dropout. Instead, the arrival of her baby girl Rethabile 14 years ago sharpened her focus, driving her to chase her dreams.

“I was in Grade 11 and suddenly I had to find work so I could feed my baby. It was a tough lesson,” Ramatisa recalls.

Today she is a beneficiary of Engen’s decision to prioritise the empowerment of black women in a bid to effect positive change in South Africa.

In 2012, the National Empowerment Fund set up a R50-million affordable loan facility for black entrepreneurs to acquire Engen retail dealerships.

According to Unathi Njokweni-Magida, Engen’s Head of Transformation and Stakeholder Engagement, 46% of the company’s 1 020 retail service station are now black-owned, with 10% of them women-owned.

Ramatisa recalls how she got her first position with Engen as a cashier at the Uncle George Service Station in her home town of Jouberton, also in Klerksdorp, 12 years ago. She had sought a better-paying job after first working in a bakery for just R800 a month.

Related: Engen Gave Me The Platform To Chase My True Calling – Former Pump Attendant

“I used to work extra hours at the Uncle George location, just to make sure the business was running well. My main aim was to see the customers always happy with our service,” she says.

That’s because while Ramatisa may not have an education beyond Grade 11, she quickly figured out that if the customers were happy, the business would thrive.

“I got interested in everything about the operations of the service station, and soon began acting as a supervisor, directing, managing and helping train the staff to do their best work.”

After eight years at the Jouberton location, where she rose to assistant manager, Ramatisa got the chance to run her own concern when her boss, Dr Abdool Ebrahim, suggested she apply for her own Engen franchise.

“I told him I was an uneducated woman but he was adamant that I was young and ambitious, and that I was exactly the kind of person Engen was looking for, who they could help to learn and grow.

“Once I got to the interview I had no more fear. I just wanted to show them exactly what I had to offer,” she remembers.

That was in 2015, when the Orkney site was ready to reopen after a two-year shutdown.

“Engen put their trust in me, and I became the majority shareholder in the operation, which includes the petrol and Quickshop, as well as a Corner Bakery and Barcelos.

Ramatisa and her team have since doubled previous sales figures for all parts of the operation, and were named by Engen in the top two operations for the region in July.

“It’s extremely hard work, but I am so proud of what we are achieving,” she adds.

Ramatisa also changed the future for Rethabile, and her other daughter, Bonita, 3, explaining that she invests in their education wherever possible.

“I may be a single mother, and I may not have much of an education, but I am proof that hard work really does pay off. When I failed to matriculate, I promised myself that that would be my last failure.

“Other women out there need to know that they can do the same if they put in the time and effort, and if they have love for what they do.”

Njokweni-Magida says that by continuing to attract and grow the talents of young women like Ramatisa, Engen is helping build a prosperous future for all South Africans.

Related: How Does One Start a Petrol Station in South Africa?

“We are focused on integrating more women across our entire value chain, and are very proud of success stories like this one.”

Other than the significant boost in the number of black and women dealership owners, the Engen Limited board comprises 54% black members, and 31% black women. The Engen management committee is 64% black, and 36% black female, while senior management in the organisation is 65% black of which 36% are black female.

Ramatisa says she “fell in love” with Engen’s operational methods.

“I remain passionate about the Engen brand, and thank the company for proving that if you offer someone an opportunity, along with mentorship and guidance, anything is possible.”

Her message to other women like her? “Don’t be afraid to dream big. I am proof that you can do anything you want in life.”

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Winners Of The 2018 FAIRLADY Santam Women Of The Future Awards Announced

FAIRLADY magazine has announced the winners of the annual FAIRLADY Santam Women of the Future Awards at an exclusive VIP luncheon at Summer Place in Hyde Park.

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The three winners were selected from a shortlist of finalists by a panel of South African judges – FAIRLADY editor Suzy Brokensha, Professor Thuli Madonsela, Head HR business partners at Santam Annette La Grange, media entrepreneur and international speaker Jo-Ann Strauss and businesswoman Dawn Nathan-Jones.

Through an independent survey, Santam found that the first 1 000 days of a business are the hardest. If you’re still in business by day 1 001, they’ve found, you’re likely to succeed long term. These high-fliers have either already surpassed that critical point or are well on the way to doing so!

“Through this competition, we have seen remarkable women that have achieved amazing results.  Our aim is to ensure that these businesses have a greater impact in the South African economy. We’re honoured to have been part of their entrepreneurial journey.” said Mokaedi Dilotsotlhe, Chief Marketing Officer at Santam.

Related: 13 Female Entrepreneurs Rising To The Top In SA

We are proud to announce the winners:

Patricia Schröder of Reclite SA has been named the 2018 FAIRLADY Santam Woman of the Future (awarded to a female entrepreneur who has survived the first 1 000 days of business). Reclite SA collects, transports and recycles lighting, batteries and electronics. ‘Winning the Woman of the Future Award is recognition for all the hard work that my team and I have done and a reminder that hard work does pay off in the end! It will also serve as inspiration for other women to chase their dreams and passions,’ says Patricia.

She receives R50 000 in cash, a mentoring session with one of the judges, an Issey Miyake fragrance hamper worth R6 990, an IMM Graduate School short course worth R15 000, a Michel Herbelin watch worth R10 500, a Samsonite Karissa Biz Bailhandle and Spinner suitcase worth R7 298, a Madrid ladies handbag and purse from Jekyll & Hide valued at R4 799, a Cross pen worth R2 500 and one media training session.

Vere Shaba of Shaba & Ramplin Green Building Solutions is the winner of the 2018 FAIRLADY Santam Rising Star Award (awarded to a female entrepreneur who is still within her 1 000 days of business). Her engineering consulting firm specialises in green building certifications, engineering solutions, energy solutions and strategic partnerships across the African continent. ‘Winning this award will enable me to create opportunities in the green building sector for South Africans in the future, as well as expand the business into key economic hubs in Africa and Europe,’ says Vere.

She receives R20 000 in cash, a mentoring session with one of the judges, an Issey Miyake fragrance hamper worth R6 990, an IMM Graduate School short course worth R15 000, a Michel Herbelin watch worth R10 500, a Samsonite Karissa Biz Bailhandle and Spinner suitcase worth R7 298, a Madrid ladies handbag and purse from Jekyll & Hide valued at R4 799, a Cross pen worth R2 500 and one media training session.

Lindiwe Matlali of Africa Teen Geeks won the 2018 FAIRLADY Santam Social Entrepreneur Award (awarded to a female entrepreneur who is making a real difference in her community). Africa Teen Geeks offers children between the ages of six and 18 free lessons on how to code. The NPO has partnered with UNISA to facilitate Saturday classes in their computer labs countrywide. ‘Knowing that we give kids hope and raise their aspirations is my biggest achievement and driver,’ says Lindiwe.

Related: Watch List: 50 Black African Women Entrepreneurs To Watch

She receives R20 000 in cash, a mentoring session with one of the judges, an Issey Miyake fragrance hamper worth R6 990, an IMM Graduate School short course worth R15 000, a Michel Herbelin watch worth R10 500, a Samsonite Karissa Biz Bailhandle and Spinner suitcase worth R7 298, a Madrid ladies handbag and purse from Jekyll & Hide valued at R4 799, a Cross pen worth R2 500 and one media training session

‘I always find the winners of the FAIRLADY Santam Women of the Future Awards absolutely admirable,’ says FAIRLADY editor Suzy Brokensha. ‘But what has really struck me about this year’s winners is how they are future-proofing the world through their businesses: Patricia and Vere through huge green initiatives that have gone out of the domestic and into the commercial world, and Lindiwe through giving marginalised kids a real shot at competing in this economy on an equal footing.’

Guests in attendance at the luncheon included businesswoman Wendy Luhabe, philanthropist and author Sonia Booth, businesswoman Judi Nwokedi, Miss World SA Thulisa Keyi, international activist Catherine Constantinides, media personalities Ashley Hayden and Penny Lebyane.

Read more about the winners and their businesses in the latest issue of FAIRLADY magazine, on sale Monday, 20 August 2018.

Follow FAIRLADY on Facebook, www.facebook.com/fairladymag, @FairladyMag on Twitter and @Fairlady_Magazine on Instagram.

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Business Linkages And Investment Readiness

The Africa Women Innovation & Entrepreneurship Forum (AWIEF) is hosting its flagship Growth Accelerator Programme for 2018, sponsored by Nedbank.

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The Africa Women Innovation & Entrepreneurship Forum (AWIEF) is hosting its flagship Growth Accelerator Programme for 2018, sponsored by Nedbank. AWIEF is seeking 25 ambitious, innovative and committed early-growth-stage South African women entrepreneurs, from a variety of sectors, looking for support to scale their businesses.

Access to finance is the most cited challenge to the growth of women-owned businesses in Africa. Bankability and investment readiness are major impediments to attracting business finance.

This is an intensive six-week programme designed to support participants with the business modelling and growth strategy required to scale their enterprises, become investment ready and develop entrepreneurial leadership. The programme will cover:

  • purpose and values
  • target market, competitive landscape and value proposition
  • delivery model
  • financial modelling
  • conduct a creative force
  • growth strategy
  • financing for scale
  • pitch training.

Related: Watch List: 50 Black African Women Entrepreneurs To Watch

Nirmala Reddy, Senior Manager of Nedbank Enterprise Development, says: ‘We support initiatives such as this in line with our pledge to help clients see money differently, which is aimed at making a difference in South Africa, not just for women and children and business, but also for communities throughout the country. The bank strongly focuses on the development of female employees and black-women-owned suppliers, and this can be seen through our development and training programmes. We are also proud that women make up 62% of the workforce at Nedbank.’

The 2018 AWIEF Growth Accelerator, with its first 25 participants, is implemented as a build-up programme that will culminate at the 2018 AWIEF Conference, Exhibition and Awards event taking place on 8 and 9 November at the Cape Town International Convention Centre, where participating entrepreneurs will pitch their business to an audience of investors, business leaders and corporate decision-makers.

The three best ventures stand to win monetary prizes from AWIEF and financial management advice from Nedbank.

The programme details are as follows:

  • Dates: Starts on 17 September and culminates on 8 and 9 November 2018
  • Location: Cape Town and Johannesburg
  • Participation fee: Free 

Eligibility

Businesses must be:

  • in a post-revenue phase;
  • scalable and innovative ventures;
  • in operation for not less than two years (ideally three to five years);
  • owned or led by ambitious and committed women entrepreneurs; and
  • seeking investment or funding to grow.

If you are interested in participating, click here to apply. Applications close on 31 August 2018.

The event is hosted by AWIEF and sponsored by Nedbank.

Read next: Kid Entrepreneurs Who Have Already Built Successful Businesses (And How You Can Too)

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