By Olebogeng Manhe, Chairman of the Gap Infrastructure Corporation (GIC)
The recent State of the Nation Address (SoNA) announced a R20 billion-per-year fund to support black-owned and small enterprises, and while this initiative holds great promise for a number of sectors, few would benefit as much as the construction industry. It’s therefore imperative that government directs a sizeable portion of this fund to construction in 2025.
Construction already employs thousands of people in disadvantaged communities across the country, and is an ideal sector for entrepreneurs from previously disadvantaged backgrounds to start and build their own business. Having access to additional support through this fund could help these entrepreneurs and new construction firms stabilise early, protect themselves against common small-business risks, and ultimately thrive in a competitive field.
At present, smaller contractors in South Africa face a number of significant challenges, such as difficulty securing financing, managing tight budgets without proper support, and struggling to win rewarding government contracts due to inexperience. They also lack the same resources as larger, more established competitors during difficult times. But with this new fund, there is an opportunity to address many of these problems.
Supporting black entrepreneurs and stimulating small business growth
Greater government support for local municipalities that struggle to keep infrastructure in good condition opens the door for emerging local, black-owned contractors. This, in turn, could expand local contractors’ capacity, help to form lasting partnerships with local government, and further reinforce the growth of robust Black-owned businesses.
Similarly, as a key private partner in many public infrastructure projects, the Gap Infrastructure Corporation (GIC) regularly hires from local labour pools. We have seen how bringing local workers onboard helps to expedite projects by adding an important perspective in how to best address specific community needs. The artisans these types of corporate initiatives develop often go on to establish their own small construction enterprises, thereby strengthening the local economy, creating jobs, and eventually allowing them to pay it forward when they become successful themselves.
If smaller businesses can access the kind of support that the R20 billion fund could provide, they will be better positioned to pass on similar opportunities to other workers and small business owners. Furthermore, they can hire and provide training for young people in carpentry, bricklaying, or even administrative tasks essential to running a construction firm.
Developing women in construction
Moreover, SoNA highlighted the importance of training women entrepreneurs to compete for government contracts. Construction has long been a male-dominated industry, and it’s time this is changed. Women have repeatedly shown their resilience and proven their expertise in this sector, demonstrating that they can thrive in construction and run influential, competitive companies that drive the industry forward. Involving more women in management and leadership positions will create a stronger, more balanced industry for the benefit of the entire country.
It’s also important for established players such as GIC to do our part by mentoring smaller or newer firms, and sharing critical knowledge about safety standards, budgeting, and time management. This is especially critical if we want to encourage more youth and women to run their own construction companies. Providing funding without the necessary know-how won’t help them navigate the complexities of tender processes or comply with building regulations.
Finally, to make this transformation fund truly effective, we must set clear rules and ensure the money is well monitored. If there is too much red tape, small businesses might not be able to apply for this funding. If the rules are unclear, entrepreneurs may not understand how to best benefit from it and lose out on critical financial support. As such, government must publish simple, transparent guidelines that explain who can apply, how much funding is available, and what the requirements are for reporting back.
