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BizTrends 2017

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Govt 'rising underspending' linked to slow transformation

According to BDLive, while acknowledging a "rising underspend" by the government, Public Works Minister Thulas Nxesi says the pace of transformation in SA's construction sector is far too slow. This, he says, is particularly evident among listed construction and engineering groups and higher-tier subcontractors.
But the racial and spatial history of apartheid presents great challenges. In this regard, the government has adopted a more militant tone on black economic empowerment, driven by the Department of Trade and Industry. Many blacks are represented in the lower levels of the construction sector, along with steadily increasing ownership. But registered built-environment professionals and technical staff are still mostly white males.

South Africa faces critical skills shortages as insufficient black graduates are being produced to replace white males. In accordance with the state's amended empowerment codes, the government says it intends to criminalise fronting, boost supply chain diversification in state procurement, and monitor black economic empowerment verification agencies more closely, BDLive reports.

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