New black entrepreneur class must assist in job creation

Entrepreneurship defines black economic empowerment (BEE) group Peu's broad-based BEE strategy.

Peu's broad-based BEE structures have been set up to ensure they develop much-needed entrepreneurial skills. The group is focusing on building sustainable businesses, which will put it in a position to harness and support black entrepreneurship, says Peu financial director Busi Tshili.

Peu MD and founder Peter Malungani believes that the development of an entrepreneurial culture will help to overcome SA's economic challenges. This is a widely held view and numerous initiatives have been launched to stimulate small and medium-sized enterprises.

WHAT IT MEANS

• SA needs more entrepreneurs
• Peu is committed to developing SMEs

But a daunting task lies ahead. The drive to deracialise existing economic assets is necessary, but it will not be enough to address the country's challenges, says Malungani. "We need to ensure the creation of a strong class of black entrepreneurs," he says.

This attitude is reflected in Peu's ownership structure. The group is 72% owned by management and staff and the rest of the equity has been allocated to entrepreneurship-building entities. Intsika Enablement Trust holds 20% of the equity and Intsika Investment Trust holds 8%. Both trusts are geared towards enabling young aspirant black entrepreneurs to realise their dreams and objectives, says the group.

Peu has also co-invested with other community-based trusts that are focusing on the development of a black entrepreneurial class. The Investec deal includes the beneficiaries the Entrepreneurship Development Trust, while the Super Group deal has a staff component and in the Eastern Cape Super Group partnered Kei Fleet Solutions.

Peu's entrepreneur development trusts seek to work with entrepreneurs on merit. The group says it will contribute R5m to kick-start a project called the Empowerment Zone, which will develop business parks in previously disadvantaged communities.

Malungani acknowledges that SA's BEE programme has some flaws. "This is a grand re-engineering programme, and the first of its kind. There has been progress in certain areas, but the country could not have engaged in this programme without making some mistakes," he says.

He says it is the duty of prominent BEE groups such as Peu to work hard and ensure that the programme produces more success stories.

Malungani says there is need to further broaden the benefits of BEE.

"SA does not want to create a community of black people without strong individuals. The debate should focus on what the individual black entrepreneurs do with their newly found economic power. They have to create wealth and new business to contribute towards job creation and eventually economic growth and poverty alleviation," says Malungani.