Skills-empowerment nexus

3rd March 2006 By: peter cromberge

At a black empowerment conference hosted by the Steel and Engineering Industries Federation of South Africa (Seifsa), it emerged that broad based black economic empowerment (BBBEE) needs to be complimented by skills development. Speaking at the BBBEE conference, Econometrix director and chief economist Dr Azar Jammine notes that shares in BEE deals have normally gone to consortia of well-connected persons - a trend that has resulted in the creation of a privileged elite.

Although he argues that recent BBBEE deals have attempted to widen the spread of potential beneficiaries, he argues that empowerment deals should be founded on productivity rather than entitlement. “Successful BEE needs more emphasis on education and skills,” says Jammine.

“Enough of the right things are being done to ensure solid sustainable growth,” he says.

“But skills shortage remains the biggest constraint to higher growth - BBBEE is evolving all the time, providing socio-political stability, albeit at some economic cost.” Seifsa head of skills development Janet Lopes explains that a shortage of skills remains the biggest constraint to economic growth and may also get in the way of effective BEE implementation. She adds that one of the main challenges to implementing BEE is the lack of interaction between the Department of Trade and Industry and the National Skills Authority. “The result is a lack of alignment between the Skills Development Act, the Employment Equity Act and the latest BBBEE Act,” says Lopes. Of great concern, says Lopes, is that learnerships are being seen as the key or only vehicle for training and occupational competence. Graduate degrees, internships, on-the-job training and apprentice training are important training routes that are being undervalued, she says. “Apprentice training is not mentioned in the skills development codes, implying that this tried and tested method of skills development is not necessary.” “The issue,” says Lopes, “should be occupational competence based on the skills needs of the industry.” Lopes also details some of the challenges that manufacturing companies face: These include the critical skills defined annually by the sector education and training authorities, the small number of women in the workforce, the disappointing school results for mathematics and science, the high dropout rate at grade 10, the ambitious employment equity codes and the problem of illiteracy in the workforce. In response to these problems, companies often tend to focus on low and intermediate training, says Lopes.

Also speaking at the conference, Cliffe Dekker Attorneys director Kevin Lester explains that the deadline for comments on the BBBEE Codes of Good Practice has been moved to 31 March.

Lester, who is also a consultant to the department of trade and industry (DTI) on the codes, notes that the codes should come into operation between January and June 2007. Janet Lopes Skills shortages may help stifle BBBEE objectives