Business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso has warned of possible consequences for manufacturers, from the Department of Trade, Industry and Competition’s (dtic’s) proposed amendments to the country’s broad-based black economic empowerment (BBBEE) regulations.

Writing in her latest weekly newsletter, Mavuso points out that original-equipment manufacturers (OEMs) have spent years building local supply chains, deliberately including majority black-owned businesses as part of their transformation commitments.

However, she posits that the proposed amendments would strip them of their BBBEE status, as many suppliers are not 100% black-owned.  

She emphasises that this BBBEE status is critical for OEMs to access the tax incentives and support schemes that government has established for the industry, and there is no indication of how this would be managed.

“Automotive components for specific models cannot simply be swapped out when the BBBEE rules change. Developing new suppliers takes years, requiring testing, certification, integration into production lines. The government-backed interventions should be providing a pipeline of strong black-owned businesses who can compete – if they are not, we should ask why not?” Mavuso asserts.

She calls for the dtic to reverse the BBBEE amendments following comments on the draft documents.

Mavuso highlights initiatives that the dtic has succeeded in delivering, including the Automotive Masterplan maintaining investment, with manufacturers like Toyota, BMW and Mercedes-Benz expanding operations over recent years.

She also calls for consistency across policies.

Mavuso advocates for government to develop a clear plan to save the country’s industrial base. She says it must establish a manufacturer task force and recognise manufacturing as a whole-of-Cabinet responsibility spanning energy, logistics, ports and security.

Mavuso stresses that Cabinet must recognise that manufacturing is a shared responsibility, with energy reliability, logistics costs, ports performance, crime and security all affecting manufacturers’ ability to compete globally.

She also says Minister Parks Tau should establish a manufacturer task force with monthly reporting directly to the President.

“This cannot be resolved through bilateral negotiations with individual businesses. We need a macro-level understanding of obstacles and coordinated government action to remove them,” she asserts.