An evaluation of the implementation of Black Economic Empowerment within the construction industry in the Central region of the North West Province
Menyatsoe, Moilwa Christopher
MetadataShow full item record
A great deal is expected of the construction industry and this study will stimulate reflections by participants on their role and performance. Leadership and collaboration are needed to enhance the capability and focus of all who engage in the delivery process- a focus to grow, transform and nurture the national asset base of the construction industry. The study highlights areas of progress and provides insight on the significant challenges to the construction industry growth and creation of infrastructure, challenges that are closely linked to the need for raised levels of performance and empowerment. Construction accounts for about I 0 per cent of the world economy and approximately 70 per cent of construction investment is accounted for in the USA, Western Europe and Japan. The continent of Africa accounts for about one per cent. Per capita investment in construction in the developed world is approximately $2500 per annum compared to $46 per annum in Africa. Embodied in the policies and legislations is a fundamental recognition that a developing society inherited a construction sector that supports a strategically developed industry with world-class capability and an established material manufacturing sector. The post-1994 expansion of South African engineering and construction services into global markets is testament to this inherent capability and the potential of the industry, and was enabled by the country's passage to democracy. In parallel with policy and institutional reform, a range of early practical initiatives were introduced by government to direct the process of change. In this context, growth needs to be coupled with sustainable employment, empowerment and investment in human capital as a pre-requisite for improved industry performance and competitiveness. The policy framework also addresses the role and potential impact of government as facilitator, regulator and major client to the industry. These included the implementation of preferential procurement to stimulate access to the market by historically disadvantaged enterprises, and measures to address supply-side constraints such as access to entrepreneurial training, finance, and credit. The Black Economic Empowerment is defined as empowerment of a broad-based process, and adopts a scorecard approach covering ownership, management, employment equity, skills development, procurement, corporate social investment, as well as investment and enterprise formation. By meeting any, or a combination of these objectives, every company has the potential to promote empowerment (SA Construction Industry Report, 2004 ). The main objective is to create new business ventures which play a significant role in economic growth. For this reason, it makes sense to explore correlations between black economic empowerment activities and lagged indicators of procurement policies and procedures. Some of the findings are: •Lack of consistency in the application of preferential procurement policies • Ambiguous regulations • Clients' planning shortcomings • Inadequate budget • Capacity constraints The biggest concern is the lack of core skills among emerging contractors, that is, financial literacy, record-keeping and marketing Although there are excellent examples of financing initiatives in South Africa (SA), there are only a small number of financial institutions in SA that have low default rates on small business loans.