Creating an inclusive forestry sector through skills development

1. Creating an inclusive forestry sector through skills development Aubrey Nsuntsha August 2008 Durban

2. ABOUT AMAHLATHI • Amahlathi Emerging Entrepreneurs Forum operates like a Chamber of Forest Enterprises; • We are a voluntary association of the previously disadvantaged forest entrepreneurs promoting the business interest of SMMEs throughout the forestry value chain; • Amahlathi’s sole purpose of existence is the promotion of SMMEs and the previously disadvantaged forest entrepreneurs; as a result, matters which will be of no consequence to others, become important to us; • Profile of our membership; • SMME, majority of whom survive at the 2nd economy level; • Previously excluded from participating within the mainstream economy; • Because of their characteristics, SMMEs have never attracted any significant attention beyond public relation exercises; • There is no information about SMMEs contribution to jobs and so forth;

3. THE FORESTRY SECTOR • Grew out of the government’s direct support prior to 1994; • The model of development for the economy was to promote big business and exclude black people; • After 1994, with the new government in place there was a shift in policy. The new policy environment emphasized the need to build a strong, productive and competitive SMME sector as a model of development; there was also a focus on increasing active participation by black people (the previously disadvantaged) in the mainstream economy; • In 2008, and after 14 years of democracy, the recently signed the Forestry Sector Transformation Charter document describes the sector as “…still largely white and male dominated and characterized by large disparities in access to opportunities and benefits for black people.” • The sector also characterised by vertically integrated industries providing limited scope and contribution by the SMMEs.

4. THE FORESTRY SECTOR • Important subsectors making up the SMMEs have been declining; • Charcoal producers; • Contractors; • Small growers – out of 5 schemes in KZN only 3 are showing signs of growth; • Saw millers – faced with critical shortage of raw material; • Furniture manufacturers – lack access to raw material; • Land restitution projects are failing in northern KZN and Mpumalanga; • The sector therefore remains exclusive with limited and declining participation by black people; • Although the sector contributes to foreign income, jobs and GDP, it enjoys limited political recognition; • Currently moves are afoot to increase the profile of the sector. • However, this is likely to be viewed as an act of spinning the truth in an attempt to preserve enjoyed by the minorities at the expense of the majority; • What therefore is needed is to change the situation on the ground and rely on the word-of –mouth as the best form of increasing the profile.

5. WHY SMMEs? • Those whose interest is in maintaining the status quo, having been asking me, politely – why fixation with SMMEs? • I believe that the forestry sector makes a significant economic contribution to emerging contractors; charcoal producers; saw millers; furniture manufacturers; small growers and even those that depends for their livelihood on producing honey; • In turn, these entrepreneurs provide job opportunities for the locals, generate wealth that stays locally, and therefore contribute to the improvement of livelihood; • The biggest challenge facing South Africa is poverty and unemployment – the richer getting richer whilst the poor are getting poorer; • Globally SMMEs are recognized as an effective strategy to reduce poverty and improve livelihood of the rural poor

6. WHY SMMEs? • The focus on SMMEs is part of the government policy ; • For example, in 2003, the Department of Trade and Industry launched its Integrated Small Enterprise Development Strategy, which focused on promoting three (3) support strategies; • Promoting entrepreneurship; • Creating an enabling environment; and • Enhancing the competitiveness and capabilities of existing enterprises • On the 7th of November 2007, the Cabinet approved that 85% of government expenditure would be procured from SMMEs

7. WHY SMMEs? • The ten year vision of ASGISA is ‘‘a South Africa with a vibrant and competitive small enterprise sector with enterprises that grow in turn over and employment. Those who were once excluded from full participation in the economy will have access to support development services, and be fully integrated into the different sectors of the South African economy…’’

8. AN INCLUSIVE SECTOR • Amahlathi believes that the sector must increase the role, the scope and contribution of the SMMEs in the forestry sector; • We believe that there is a need to maintain the corporate sector whilst at the same time promoting SMMEs as a strategic goal in its own right if we are to achieve sustainable transformation within the forestry industry; • The Skills Development Programmes and learnerships must contribute strategically to this goal;

9. AN INCLUSIVE SECTOR • We believe that the existence of a vibrant SMME sector provides a firm foundation for future industrial growth especially within transition economies such as ours; • It also provides an effective linkage for the majority of black people to participate at the mainstream level of the economy; • The skills development regime must provide the following – a basis for promoting entrepreneurship; • There must therefore be a balance between the technical and the managerial aspects of skills development; • It must promote innovation, competitiveness and productivity • Resources and capacity must be developed;

10. SKILLS DEVELOPMENT Amahlathi is currently implementing a FIETA funded and DWAF supported forestry managerial skills development project; • The focus is on promoting skilled, productive and competitive entrepreneurs throughout the value chain; • The project is targeting about 285 entrepreneurs within four provinces and about 10 district municipalities; • The project, although characterised challenges, has enormous potential to increase the profile of the forestry industry as it aligns the development of the forestry as a sector specific activity with municipality’s Local Economic Development strategies; • It is a continuous project linking the theory and practicals through structured mentorship; • It is also continuous because we are hoping that we would be able to ring fence these entrepreneurs and work with them over a 5 year process;

11. SKILLS DEVELOPMENT • That was serious opposition to the project by those who are keen to maintain their status of priviledge while the majority of the people suffer on an unjust system; • We would like to suggest that the sector does not have many options. We must embrace and commit full to transformation otherwise we must take responsibility for destroying the full potential of the sector and undermining its future viability; • The analysis of the status quo shows that the sector is faced with numerous challenges. The established industries are not able to deal with these on their own, without the active involvement of the previously disadvantaged – environmental concerns, land restitution and so forth. • Our position is that this conference must adopt the 10 year vision of ASGISA and we must look at what is happening within the SMME sector to judge our success or lack of it.

12. THANK YOU