Overview of SMME and BBBEE

1. Overview of SMME and BBBEE Thomas Mathibela Project Manager : Tourism Development Tourism KwaZulu-Natal

2. Where is KwaZulu Natal and How to get there? KwaZulu-Natal is situated on the Eastern Seaboard of South Africa. The No. 1 domestic destination of South Africa is the City of Durban, KwaZulu-Natal. 1 hour flight ex JHB South Africa 3 hour drive from JHB, to enter the Zulu Kingdom

3. BEE is not… Simply a moral initiative to redress the wrongs of the past. Affirmative action. An initiative to take wealth from white people to give to black people. Merely changing the ownership profile of enterprises. The redistribution of existing wealth. Dispelling the myths with respect to BEE BEE is … A pragmatic growth strategy that aims to realise the country's full economic potential. Aimed at developing the economic potential inherent in all South Africans. Is a broad based strategy to eliminate the severe levels of inequality in RSA.

4. Defining the concept of BEE • An integrated and coherent socio-economic process; • A process that contributes to the economic transformation of the country; • A process that increases the number of black (HDI) people that manage, own and control the country’s economy; • A process that decreases income inequalities.

5. Click to edit Master title style Broad Based BEE • Click to edit Master text styles • Second level • Third level • Fourth level • Fifth level 5

6. Click to edit Master title style The Seven Pillars of Broad Based BEE • Click to edit Master text styles • Second level • Third level • Fourth level • Fifth level 6

7. Charters and Score Cards • Leading economic sectors are expected in terms of The BEE Act to develop charters and score cards for each of the factors that make up BBBEE and the targets such a sector would like to achieve in the short to long term. • This scorecard enables individual enterprises and an economic sector to measure its current score in terms of BBBEE and to determine whether they are operating as an excellent, good, satisfactory or limited BBBEE operator or sector. • The Tourism Sector has developed such a scorecard and monitoring mechanism – Tourism BEE Council website at http://www.tourismbeecharter.co.za .

8. The benefits of complying with the Tourism BEE Charter and Scorecard An Empowerment Certificate (accreditation) which implies that a tourism enterprise will benefit from: • Preferential procurement; • Enterprise development; • Access to government incentives; • Development of the local tourism market; • New business linkages; • Ownership and partnership opportunities; • Additional skills for the sector; • New products and opportunities; • Increased innovation in enterprises and in the sector; • Access to markets that require an integrated experience. • USHAKA MARINE WORLD

9. Tourism White Paper “Tourism development in South Africa has largely been a missed opportunity. Had its history been different, South Africa would probably have been one of the most visited places in the world. The tourism industry in South Africa has been woefully protected - protected from foreign competition (limited international investment in tourism facilities), protected from demanding, long-stay tourists (limited flow of international visitors) and protected from itself (suppliers cater to a largely homogeneous and predictable clientele, i.e. the easily identifiable needs of the privileged class). As such, the potential of the tourism industry to spawn entrepreneurship, to create new services (e.g. local entertainment, handicrafts, etc.), to "drive" other sectors of the economy, to strengthen rural communities, to generate foreign exchange and to create employment, has not been realised.”

10. Tourism BBBEE in KZN, the current reality… • Low levels of awareness of BBBEE and its benefits. • Serious imbalances e.g. only 46% of KZN’s tourists guides are HDIs; <10% of KZN’s Tour Operating Enterprises are HDI owned; 2nd highest unemployment rate in RSA 32.2%; 53% of KZN households receive incomes below poverty line. • KZN is a tourism destination that has yet to reach its true tourism potential.

11. Three critical opportunities for transformation The Global Competitiveness Study has identified three critical opportunities for transformation in tourism: • Tourism is a strong growth sector – BEE can thus be driven through growth, rather than by simply dividing an ‘existing cake’; • The key gaps identified in the current tourism experience – arts,history and entertainment – can easily be filled by black entrepreneurs; • The new emerging domestic market provides the economic logic for new product development by black entrepreneurs. • USHAKA MARINE WORLD

12. Tourism BEE Summit Resolutions • Promote market and financial access • Accelerate skills development • Promote responsible tourism development • Roll out workshops on the implementation of the Tourism BEE Charter

13. Challenges facing HDI SMME’S • Operating on the periphery • Lack of relevant technology • Poor network with the channel • Poor marketing • Presentation of untested brands • Operating as small ineffective businesses – inability to form stronger cooperations

14. Tourism KwaZulu-Natal’s Objectives/Roles with respect to BEE • TKZN intends to: • Continue to encourage industry compliance with Government’s BEE Scorecard and provide advisory services to SMMEs to assist in their development. • Promote the business benefits of the Tourism BEE Scorecard through workshops. • Develop a BEE database to promote BEE Scorecard compliance. • Analyse BEE compliance reports and encourage compliance. • Identify key service providers or partners, such as Ithala and the Tourism Enterprise Project (TEP), to assist in SMME mentorship and assistance. • Continue to provide advisory services to SMMEs and Community Tourism Organisations (CTOs) • Facilitate incubator and mentorship programmes. • Enable business linkages and market access to ensure sustainable SMME growth. • Facilitate skills development • Assist in the identification of training interventions required to address knowledge and skills gaps within the emerging sector of the industry. • Facilitate training and capacity building interventions for SMMEs.

15. MARKETING SUPPORT • Two SMME owned companies to exhibit at each consumer shows • DSTV GETAWAY SHOW – 29-31 AUGUST • SOWETO FESTIVAL – 24-28 SEPTEMBER • CAPE TOWN OUTDOOR SHOW – 3-5 OCTOBER • INDABA SMME’s SUPPORT • The plan is to grow 10% vs 2008 SMME’s participation (33) • Registration will commence in Nov 2008 • Project team to meet and discuss suitable participants for Indaba 2009

16. SERVICE EXCELLENCE . Service Excellence launch on the 28 November 2008-media and trade are invited. • Poster campaign resume also on the 28 November 2008. • USHAKA MARINE WORLD

17. CATEGORIES • Accommodation • Hotel of the Year • B & B/Self- catering of the Year (Established) • B & B/Self- catering of the Year (Emerging) • Lodge/ Guest house of the Year (Established) • Lodge/ Guest house of the Year (Emerging) • Tour Operator of the Year • Tour Operator of the Year (Established) • Tour Operator of the Year (Emerging) 3) Wheel Operator of the Year • Wheel Operator of the Year (Established) • Wheel Operator of the Year (Emerging) 4) Tourism Office of the Year 5)Craft Project of the Year

18. CATEGORIES CONT... 6) Tourism Journalists of the Year • Print Journalist of the Year • Electronic Journalist of the Year • Most Innovative Project of the Year 8) Restaurants of the Year • Family Restaurant of the Year (Established) • Family Restaurant of the Year (Emerging) • Fine Dining Restaurant of the Year • Traditional Restaurant of the Year (Established) • Traditional Restaurant of the Year (Emerging) 9) Tour Guide of the Year • Tourist Guide of the Year (Established) • Tourist Guide of the year ( Emerging) 10) Special Judges Awards 11) MEC’S Awards

19. For further information, please contact us www.zulu.org.za