Enterprise and Supplier Development (ESD) programmes are integral to South Africa’s efforts to
promote economic transformation and sustainability. These initiatives, part of the Broad-Based Black
Economic Empowerment (B-BBEE) strategy, aim to support the growth and development of small and
medium enterprises (SMEs) by integrating them into corporate supply chains. As we look into 2024,
it’s crucial to evaluate the effectiveness of these programmes and their impact on economic growth
and transformation to date
Evidence of Effectiveness
Supplier Development and Performance
Supplier Development (SD) Programmes have shown varied results in terms of their impact on SME
growth and sustainability. Dapaah et al. (2017) evaluated these programmes and noted that while
beneficiaries appreciate the financial support, there are significant areas for improvement. The
research suggests that conFnuous mentorship and training are criFcal components that are currently
lacking and that are much needed to ensure efficiency within supply chains. In 2024, there is still a
giant need for the restructuring of these programmes to incorporate long-term sustainability targets
rather than short-term gains, to ensure that SMEs can thrive independently even after initial
investments, and eventually move on to be large enterprises. Non-financial support is as important,
if not more, than that of financial support to SMEs.
Enterprise Development Programmes
Reports from South African National Treasury indicate that Enterprise Development (ED) programmes
have positively impacted job creation and SME growth, but there are concerns about the sustainability
and depth of impact, particularly in how benefits are distributed across different SME sectors. World
Bank emphasizes that while ED programmes have increased SME participation in supply chains,
challenges such as access to finance, bureaucratic red tape, and market entry barriers remain
significant hurdles that need addressing for long-term effectiveness, a challenge we still face in 2024.
These same concerns are echoed by many others such as Deloitte, GIBS, Accenture, KPMG and SEDA.
Public vs Private Sector initiatives
Public Sector
State-Owned Enterprises (SOEs) in Gauteng have been instrumental in demonstrating the importance
of total quality management and competitive advantage in achieving supply chain effectiveness.
Chinomona et al. (2023) found that these factors are crucial for SOEs to maintain efficiency and
competitiveness. The study emphasizes that SOEs adopt comprehensive quality management
practices and strive for competitive differentiation tend to perform better in integrating SMEs into
their supply chains. This integration not only supports the SMEs but also enhances the overall
performance of the SOEs.
In 2024, reforms are underway to optimize infrastructure financing and delivery. This includes
amending the Public-Private Partnership (PPP) regulatory framework to reduce complexity and
improve governance. Public investment management will be strengthened, and private sector
participation encouraged.
The effectiveness of ESD programmes has varied among SOEs. While some have well-established
and impactful programmes, others may struggle with implementation and achieving desired
outcomes. Common challenges include ensuring sustainability of supported SMEs, avoiding political
interference, and aligning ESD programmes with broader strategic goals.
Private Sector
Private sector initiatives have played a crucial role in enhancing supplier diversity and capability.
Rogerson (2012) had explored the phenomenon of supplier diversity within private sector
procurement and found that these initiatives were effective in promoting inclusive economic growth.
By focusing on enhancing the capabilities of diverse suppliers and integrating them into corporate
supply chains, private companies could contribute significantly to economic transformation, reduce
economic red tape and barriers to entry. These initiatives often include financial support and non-financial support namely training and mentorship, which are vital for the development and
sustainability of SMEs. In 2024, there is a continuous need for programmes with a combination of
financial and non-financial support to ensure wholistic support of SMEs.
Challenges and Recommendations
Despite the successes, several challenges persist in the implementation of ESD programmes. Haupt et
al. (2019) highlighted issues such as political connections influencing programme benefits, ineffective
monitoring, and lack of effective communication mediums. Post investment support and monitoring
is also a highly important yet neglected activity. These challenges hinder the potential impact of ESD
initiatives. To enhance the effectiveness of these programmes, there needs to be a focus on improving
transparency, accountability, communication.
Tysys Capital Group commitment to trailblazing of ESD programmes
Our Focus
We have a vision to be a cradle for SMEs, where they will properly and with the right tools, learn to
walk before they run to ensure that they encounter as little stumbling blocks as possible in the
marathon of business. Tysys Capital Group (TCG) aims to achieve its vision through raising, managing
and deploying high-impact funds aimed at the sustainability of the SMEs, while mentoring, coaching,
and encouraging skills development and training, thus enabling SMEs to drive the socio-economic
development in South Africa
Our Impact on Economic Growth and Job Creation through SMEs
ESD programmes have been instrumental in fostering economic growth and job creation in South
Africa. By supporting SMEs, these programmes contribute to a more progressive and inclusive
economy. SMEs are often seen as the backbone of economic development due to their potential to
create jobs and stimulate economic activity at the grassroots level. TCG has ensured and continues to
ensure the development of black SMEs to Black Industrialists that create jobs, generate sustainable
income for the business, improve the livelihood of their employees and assist in the development of
much-needed business support, business and technical skills including mentorship and coaching. We
are proud to have been able to contribute socially by means of: