President Cyril Ramaphosa says that his government is looking to introduce a number of reforms to improve business conditions in South Africa.
Speaking at the second annual South Africa Investment Conference on Thursday (7 November), Ramaphosa said that this will include the new piece of legislation known as the Public Procurement Bill.
“Under the soon-to-be-finalised Public Procurement Bill, organs of state will be required to sub-contract SMMEs to a minimum of 30% of the value of the contract for contracts that are above R30 million,” he said.
“Whoever receives a tender must sub-contract a minimum of 30% of the value of the contract to SMMEs that are at least 51% black-owned.”
Ramaphosa said that this public procurement is being used to promote local production, and that SMMEs will benefit from designated products when they participate in public procurement systems.
He added that the tax regime for SMMEs is also being simplified.
“An example of this is the requirement for annual rather than biannual tax returns. Grants received by SMMEs are also tax-exempt,” he said.
“Enhancements have also been made to the venture capital company tax regime to encourage investment in small businesses and junior mining companies.”
The total value of investment commitments made at the second instalment of the South Africa Investment Conference tally up to R363 billion, president Ramaphosa announced on Wednesday.
This, the president highlighted, is 17% higher than the R300 billion in investments made at the conference’s debut in 2018 where the president announced his intention to attract R1.2 trillion over five years.
With South Africa’s unemployment rate sitting at a staggering 29.1% according to Statistics South Africa, Ramaphosa said the newly announced investments are set to create 412,000 direct jobs over the next five years.
“We are immensely encouraged as South Africans by the investment commitments made. We believe that those investments will boost the economic growth of the country and will create many new jobs,” said Ramaphosa.