MTN South Africa has enhanced its enterprise and supplier development (ESD) programme, committing to the investment of millions of rands to support local supply chains.

On the back of significant progress already made in the ESD space, which saw MTN spend over R220-million in 2021 on various initiatives, the new ESD, MTN Xlerator, sets ambitious new targets to improve procurement spending and the development of local suppliers.

This includes procurement spend of R50-million, or more, on 50 black-owned suppliers, an increase from 13 in 2021.

“The launch marks another significant step forward in an intentional journey to support black-owned enterprises under the environment, social and corporate governance pillar of the company’s Ambition 2025 strategy and comes on the back of already significant progress in the ESD space,” says MTN South Africa CEO Charles Molapisi.

In addition to the more than R220-million committed to various initiatives in 2021, another R100-million has been allocated for skills development.

In 2022, the group continued to drive investments in supplier, enterprise and socioeconomic development initiatives, over and above procurement spend, with R189-million spent on supplier development, R152-million on enterprise development and R81-million on socioeconomic development.

MTN’s total measured procurement spend increased from about R26-billion in 2018 to more than R44-billion in five years, R17-billion of which went to entities that are at least 30% black women-owned in the 2022 financial year.

“We are exceptionally proud of these achievements; however, we know that if we are to create shared value consistently and sustainably in South Africa, we must adapt and become more intentional at developing and increasing access to market for small, medium-sized and microenterprises (SMMEs), given the pivotal role they play in the economy and creation of jobs,” he says.

Under the new MTN Xlerator, the company aims to increase the number of active qualifying small enterprises in its South African supply chain from the current 70 to 140, and the number of active exempted microenterprises from 66 to 120.

In a key move to broaden and diversify the supply chain, MTN also plans to increase the number of black women-owned suppliers from 65 to 120.

“At MTN, we are significantly ramping up procurement and development spending into key areas, where outcomes can be accelerated and maximised,” he says, explaining that supply chain resilience will be enhanced by increasing supplier diversity and strength, collaboration and the ability to adapt to the ever-changing operating environment and challenging economic conditions.

“Lastly, we are improving value chain efficiency by fostering responsiveness, flexibility, innovation and cost-effectiveness,” says Molapisi.

Owing to the often high cost of capital investment required, the telecommunication and technology sectors have been notoriously difficult to break into and MTN South Africa seeks to lower the barriers to entry.

“As an example, this programme is already helping us facilitate more black-owned network operators in South Africa, which is an important milestone for the industry. Beyond procurement opportunities, we are also reshaping the ownership landscape of our Y’ello stores, with the goal of better mirroring the demographic tapestry of South Africa,” he explains.

MTN’s Xlerator programme will offer support to participants in a number of ways to aid their growth and their ability to meet the programme requirements.

The short-term processes focus on working capital funding and will include early payments and working capital loans, while the longer-term processes will include low-interest loans, asset finance and guarantees.

The programme also adopts an ecosystem approach where like-minded partners, including Nedbank, Absa, Bridgement, Mamor Capital, Payabill and Tysys Capital Group, drive the various initiatives, including funding product development; direct funding and cofunding; loan support through guarantees; business plan evaluation; credit assessment; business development; and training and development.

Training and development will be provided based on the needs of the individual participants and structured according to the type and scale of capabilities needed to service specific business requirements.