Barriers to African black contractors in the Western Cape construction industry

Abstract

The procurement of goods and services in the public sector accounts for a huge portion of domestic spending. An improvement in government procurement has a direct effect on the country's economic performance. Government procurement systems are subject to increasing scrutiny and reform due to domestic and international pressure. Procurement reform is being driven by the principles of democracy and fairness, the opening of the global market, and the small, medium and micro enterprises (SMMEs) that have been excluded from government procurement. Research has been done on the development of SMMEs in South Africa, highlighting the barriers experienced by these enterprises. As only limited research has been done on the barriers experienced by the sub-category of African black SMMEs, this study focuses on those barriers experienced by African black SMMEs in the construction industry in the Western Cape, with specific emphasis on the Emerging Contractor Development Programme (ECDP) of the National Department of Public Works in Cape Town. The purpose of this study was to determine the reasons why African black contractors cannot find the opportunities that they seek. The opportunities may be available, but the financial capacity of these contractors is limited. The lack of finance or the lack of access to finance causes these contractors not to be able to perform as anticipated. The survey was done among African Black contractors to determine from them what their experiences were with the Emerging Contractor Development Programme. It also focused on the number of opportunities given to them by the National Department of Public Works and the effect of the lack of finances.