Transnet opens hub to support small businesses and new entrants

State-owned freight logistics group Transnet on Tuesday launched the first of a series of enterprise development hubs, as part of a drive to expand opportunities for smaller enterprises and new entrants, especially black-owned entities.

Public Enterprises Minister Malusi Gigaba, who officially opened the first hub at the Transnet head office in Johannesburg, said it would be a “one-stop shop” for entrepreneurs and potential suppliers to Transnet. The hub would offer services that such as business development, business registration, procurement advisory services, tax registration and compliance, financial support and guidance on black economic empowerment requirements.

“The aim of this intervention is to ensure that we increase the participation of small businesses in the mainstream economy, as they have been identified as critical to unlocking economic growth as well as the pursuit of inclusive growth,” Gigaba stated.

In the previous financial year, Transnet had set aside R200-million for enterprise development, R60-million of which was flagged for the enterprise development hub series, which would be rolled out over the next two years.

The hub would primarily target potential suppliers to Transnet, but budding entrepreneurs would also receive advice on a broad range of opportunities.

Gigaba said statistics showed that small businesses contributed only 30% to South Africa’s gross domestic product, weighed down by lack of skills and access to capital, while small businesses in developed countries contributed about 50% to the economy.

“Our aim is to increase the participation of small businesses in the mainstream economy, as they have been identified as being key to unlocking economic growth. More than 12-million South Africans rely directly on small businesses for their livelihood. Small enterprises in South Africa employ between 60% and 70% of the employable population. I therefore believe that it is our responsibility as government to harness this opportunity,” the Minister stated.

The hub, which was the first of its kind in the country and employed ten staff members, would initially be operated five days a week, but this could be increased depending on demand.

Transnet undertook the initiative in partnership with the South African Revenue Service (SARS), Gauteng Enterprise Propeller, the Black Economic Empowerment Verification Agency, the National Youth Development Agency (NYDA), the Small Enterprise Development Agency and the Department of Trade and Industry’s Companies Intellectual Property Commission.

Transnet would provide the majority of the funding, while the other partners would provide advice and expertise.

“The participation of, and partnership with SARS will ensure that small businesses comply with their tax obligations, while the NYDA will focus on entrepreneurship training and funding for black youth-owned businesses,” Gigaba noted, adding that the partnership also advanced economic coordination to enable small businesses to reduce transactional cost associated with time lags and information.

Transnet group CEO Brian Molefe added that the partnership was expected to cultivate strategic relationships between Transnet, provincial and national economic development institutions, and provide small businesses access to financial and non-financial support.

“We have identified the need to create an enabling environment for small players to take full advantage of the economic opportunities presented by our investment programme. Additionally, our intention is to assist black-owned entities that struggle to build their businesses into sustainable and profitable entities,” Molefe said.

Gigaba further sated: “It is our firm belief that the hub will provide meaningful contribution in supporting and promoting viable and sustainable small, medium and micro-sized enterprises that will have a direct impact in the economy through job creation.”

Transnet’s other current enterprise development initiatives included the Transnet Itireleng Fund, Transnet-Shanduka Black Umbrellas Incubation, Transnet-Small Enterprise Development Agency Supplier Development and the Transnet Canteen Project.