The South African National Roads Agency (SOC) Limited is appealing to financial institutions to assist it in creating a conducive environment for small, medium and micro enterprises to flourish in the Wild Coast district.
SANRAL’s Wild Coast District Manager, Nwabisa Gxumisa, said the roads agency had many developmental projects lined up in the area over the next 10 years and they were not limited to the N2 Wild Coast route.
Gxumisa spoke during a SANRAL information session for Wild Coast-based SMMEs at Lusikisiki’s Resources Centre. Financial institutions such as Standard Bank and a local financial service provider, Zizo Ezo Financial Services, were invited to present their financial products that could assist local SMMEs with solutions to their cashflow problems.
The session was also attended by the South African manufacturer and distributor of mining and construction equipment, Bell, which also presented solutions for SMMEs that intend acquiring construction plants.
SANRAL invited the Department of Employment and Labour to address the SMMEs on compliance issues. Gxumisa said SANRAL had experienced several unfortunate incidents in which some local SMMEs had contracts for agency projects terminated due to non-compliance.
“There’s a thing called a ‘letter of good standing’, which many SMMEs do not have because they have never worked … but are actively looking for opportunities. We want the department of [employment and] labour to help us ensure that SMMEs here comply and pay their labourersaccording to the stipulated rates,” she said, adding, “We don’t want to see SMMEs being fined or contracts terminated and consequently find themselves unable to get work again because of non-compliance.”
Gxumisa said SANRAL would do everything possible to work with financial institutions in matters related to SMMEs contracted to its projects.
“We are still in the initial stages of this planned road construction. We still have six road construction packages that we have not yet implemented, as well as community development projects and access roads within these packages. I’m trying to prepare you, so Bell and the financiers have a better understanding of what it is that we do. We invited them to join hands in supporting the SMMEs,” she said.
She urged the institutions present to look at various funding models to assist the SMMEs and said with the amount of work that is still to be done, those SMMEs would be able to pay back those funds.
Gxumisa said the government alone could not achieve transformation goals if the well-established business sector failed to come on board. SMMEs should drive transformation by ensuring that their businesses complied, prioritising their business needs and making use of every available tool at their disposal.
“The SMMEs are also expected to propose strategic partners; it’s not only our responsibility as SANRAL to invite institutions like Standard Bank, the Industrial Development Corporation (IDC) or the Small Enterprise Finance Agency (SEFA). Give us your own proposals. Collaborate with us. You have a platform for engagement, use that platform to raise your issues without disrupting our sites,” Gxumisa advised.
Standard Bank’s Rebecca Mbalo told SMME representatives that the bank had an enterprise development option of loans up to R1.5million, and would assist SMMEs with a valid contract –even if their credit record didn’t look good.
“We need the same documents that an SMME used to secure the tender and we would only ask you to bank with us if you were not,” Mbalo added.
A founder of Zizo Ezo Financial Services, Mhlangabezi Madikizela, said he also offered financial services to SMMEs with valid contracts which needed funds to pay for equipment or the goods they needed to carry out the work.
Fortune Matsobane, who represented Bell Equipment, said the company worked with various financial institutions to give loans of up to 24 months for plant machinery. SMMEs could also acquire Bell plant on a rent-to-purchase deal with a 20% deposit plus instalments over six to 18 months.
A representative from the Department of Employment and Labour, Fezile Xhongo, advised SMMEs that had not yet been contracted for work, that the department would assist them with a tendering letter. He said they needed to ensure compliance with the Basic Conditions of Employment Act, which included stipulated income, working hours, overtime and weekend work.
“In South Africa we have a national minimum wage but for SANRAL contractors, there’s a bargaining council figure that employers must pay,” Xhongo explained.
He said contractors must register for the Compensation for Occupational Injuries and Diseases Act (COIDA) for compensation for workplace injuries and register their employees with the Unemployment Insurance Fund (UIF).
“You deduct one percent from the employee’s salary and also contribute one percent towards the UIF,” said Xhongo. He warned the SMMEs against deducting money from employees but not paying it towards UIF, as this is a serious offence.
Some SMME representatives, such as Nogolide Zokufa, said she was helped by a similar SANRAL information session two years ago to understand Bell Equipment and she was able to purchase a tractor loader backhoe (TLB) and an excavator.
“I never dreamed of owning plant because I was focused on retail. But after I attended one of the sessions where Bell was presenting, I became interested in being a plant owner. My plant is currently being used by WBHO in the construction of the road between Mtentu and Msikaba,” said Zokufa.
Another SMME owner, Mkhonza Plant and Civil owner, Mondli Mkhonza from the Forces of Change Business Forum, said he was in the process of buying a TLB and had been negotiating with Bell.
“These sessions by SANRAL are helping us as emerging contractors to grow because I also heard about Bell through these sessions and we are close to reaching a purchase deal for TLB,” said Mkhonza.
The Secretary of the Wild Coast Business Forum, Lwandile Gcume, said the session was beautiful and that Standard Bank’s Enterprises Development Fund was progressive and talked to emerging contractors.
“I want to advise my colleagues to respect these kinds of sessions because they are preparing us for better work opportunities. We appreciate SANRAL’s efforts in hosting these sessions, although we believe there are areas of improvement for SANRAL when it comes to project management and mentorship,” said Gcume.
Gxumisa said SANRAL’s construction of the N2 Wild Coast Route was not just about the road construction, but also the socio-economic development of the region.
She said, “We are constructing a road from scratch in an area where there was no road at all. We are not just constructing the road, but we are promoting mobility to ensure trade, health services and socio-economic development. The road will improve the access to healthcare, education and socio-economics activities.”
