South Africa (SA) is a developing country with a population of 55.7 million, an unemployment rate of 34.4%, a poverty rate of 55.5% and a Gini index (a measure of income inequality) of 63 (100 = maximum inequality). The SA Government views socio-economic development (SED) as a key driver to address these dire social imbalances.
As a result, SED is a key component of government initiatives. Communities often see it as a panacea to poverty and addressing immediate needs, including housing, electricity, water, sanitation, healthcare and employment.
The private sector’s interest in SED is evidenced at numerous levels. Because companies are compelled to comply with the Broad-Based Black Economic Empowerment (BBBEE) programme, which attempts to redress imbalances created under apartheid, companies that empower more Black people (e.g., through more SED spending) are rated higher on the BBBEE scorecard. This in turn gives them competitive advantages, especially in Government procurement. Companies can also benefit by offering specific training to communities, through SED programmes, ensuring they have access to the skilled workers they require. Developing local business to participate in the value chain reduces a company’s cost of business. Finally, fostering a mutually beneficial relationship with the community is valuable for managing labour negotiations, unrest and recessions.
© Loshnee Naidoo, 2022
The World Needs Dialogue!
Four: Putting Dialogue to Work
ISBN: 978-1739991159
Context
South Africa (SA) is a developing country with a population of 55.7 million, an unemployment rate of 34.4%, a poverty rate of 55.5% and a Gini index (a measure of income inequality) of 63 (100 = maximum inequality). The SA Government views socio-economic development (SED) as a key driver to address these dire social imbalances.
As a result, SED is a key component of government initiatives. Communities often see it as a panacea to poverty and addressing immediate needs, including housing, electricity, water, sanitation, healthcare and employment.
The private sector’s interest in SED is evidenced at numerous levels. Because companies are compelled to comply with the Broad-Based Black Economic Empowerment (BBBEE) programme, which attempts to redress imbalances created under apartheid, companies that empower more Black people (e.g., through more SED spending) are rated higher on the BBBEE scorecard. This in turn gives them competitive advantages, especially in Government procurement. Companies can also benefit by offering specific training to communities, through SED programmes, ensuring they have access to the skilled workers they require. Developing local business to participate in the value chain reduces a company’s cost of business. Finally, fostering a mutually beneficial relationship with the community is valuable for managing labour negotiations, unrest and recessions.
Aims/Objectives
The SA Department of Energy (DoE) commenced the Renewable Energy Independent Power Producer Programme in 2011. A mandatory component of securing a licence included the commitment to job creation, local content procurement and SED. ACWA, a Saudi owned energy and desalination company, was awarded the licence for the R5,5b (£0.27b / $367.6m USD) 50 megawatt CSP Bokpoort project, which included constructing and operating a renewable energy plant. A key deliverable was the SED programme with the !Kheis community surrounding the project site. ACWA’s SED commitment amounted to R20m per year (£0.99m / $1.35m USD) over a period of 22 years.
Northern Cape, where the plant was constructed, is the largest province in SA in terms of land mass, but with the lowest population density. !Kheis is approximately 1,5 hours from Upington, with a population of 16,637 and unemployment rate of 29,7%, with the resultant poverty levels.
I was appointed to work on the community engagement process in the !Kheis community on behalf of ACWA.
Method