PropertyValue
?:author
?:datePublished
  • 2017-06-26 (xsd:date)
?:headline
  • 98% of South African Airways’ spending didn’t go to white-owned companies (en)
?:inLanguage
?:itemReviewed
?:mentions
?:reviewBody
  • This article is more than 5 years old South Africa’s police minister has accused South African Airways (SAA), the country’s national airline, of being guilty of a despicable crime against black business. Calling it white monopoly existence in full colour, Fikile Mbalula tweeted that 98% of SAA’s R24 billion procurement goes to white-owned companies while black-owned get 2%. Several Africa Check readers asked us to investigate . Minister responded on Twitter Appropriately, Africa Check managed to get comment from the minister via Twitter. Mbalula said the source of his information was an October 2016 news article which said 2% of procurement was to black-owned firms. The article quoted SAA chairman Duduzile Myeni as saying we need to find smart ways to ensure that we move from 2% of the procurement spend on historically disadvantaged groups. R14.9 billion spent locally The most recent available information shows that SAA’s 2015/16 operating costs were R30 billion. SAA’s spokesman, Tlali Tlali, said the airline’s records showed its total spend on local procurement for 2015/16 was R14.9 billion. Local spend is required to meet the requirements of South Africa’s Broad-Based Black Economic Empowerment Act and codes . The South African government’s policy of broad-based black economic empowerment (B-BBEE) aims to increase participation in the country’s economy. A number of targets have been set to increase the participation of black people in the ownership and management structures of enterprises. Enterprises doing business with government or an organ of state are required to be compliant and verify their level of transformation. Of the R14.9 billion spent locally, R14.2 billion was spent on B-BBEE compliant companies. This represented 95% of local spend, Tlali said. However, not all B-BBEE compliant companies are black-owned, as defined in the B-BBEE Act. The act’s definition of black includes African, Coloured and Indian people. Companies with over 50% black voting rights are considered to be 100% black . Tlali told Africa Check that R252 million of SAA’s total local procurement was spent on companies that met the black ownership requirement. This works out to 1.7% of the company's total eligible spend of R14.9 billion, close to Mbalula’s figure of 2%. The airline fell short of its target of 8% for the year. Entry barriers into aviation are high Barriers to entry in aviation are high, SAA notes in its financial report . Thus, increasing black-owned procurement may not be an easy exercise, according to Dirk de Vos, chief executive officer of corporate finance and advisory firm QED Solutions . It might be possible for SAA to contract some of its indirect black suppliers directly, [but] this may be difficult logistically or on a supply chain management basis, said De Vos. He said that while Mbalula’s claim of black-owned companies getting 2% of local procurement was correct it was misleading. If B-BBEE compliance cannot be the measure, then the whole B-BBEE edifice is effectively treated as a non-existent factor, De Vos said. He said SAA’s 95% B-BBEE compliance figure was a significant achievement. (en)
?:reviewRating
rdf:type
?:url