BY TRYPHOSA RAMANO
EVERYONE agrees that the economic legacy of apartheid was catastrophic. That is why many policies have been implemented to address the legacy, the Black Economic Empowerment (BEE) and its successor policy, Broad-Based Black Economic Empowerment (B-BBEE), are amongst the most controversial of these policies.
While these policies have alleviated some poverty, they have failed to meaningfully transform the economy and address economic inequality.
So, despite its intention to redress past racial and economic discrimination, should we dump BEE policies? No.
No one disagrees with the B-BBEE’s aims. Even largely white businesses broadly embrace the idea that the economy should fully include black entrepreneurs.
But there has been much grumbling over the shape BEE has taken. So far, empowerment has mostly meant bringing black shareholders into white-dominated companies; thus a narrow, often politically connected, elite siphoning off much of the benefits.
This has seen BEE barons more versed in deal-making, collecting a string shares in many white owned companies. They sit back and enjoy dividends and do little to advance their operational know-how or entrepreneurship, hence BEE is accused of helping slice up the economic cake, but has done little to expand it. That is why there is an outcry that black empowerment deals have done little to establish genuine businesses, create employment and alleviate poverty.
Black economic empowerment can only succeed if sound business and economic principles are followed. These should include an increase in the number of black professionals being trained, the percentage of government contracts won by black companies and the amount of finance made available to black entrepreneurs, among others.
Real economic empowerment should stimulate competition, improve black skills and productivity, raise black domestic investment levels, reduce poverty, increase employment and broaden our tax base.
Black economic empowerment should be accompanied by intense skills development and entrepreneurship and not be driven by dividends only.
Amongst other policies, the Black Industrialists Programme, which was launched in August 2014 will go a long way in achieving the targeted development of 100 black industrialists over the next three years. This creates room for the participation of many black entrepreneurs in the manufacturing sector as industrialists. They will be able to benefit from, among others, the incentives provided for in the Industrial Policy Action Plan and the host of manufacturing incentives that the government provides.
We all know that empowerment is the capacity to chart one’s own destiny. For blacks, the unity essential for empowerment must again become as entrenched as the race-based challenges we face every day of our lives.
Therefore renewed black empowerment and unified action are vital ingredients in challenging systemic obstacles to black progress. Moreover, such action is grounded in group solidarity, not individualism, and underscores the significance of culture and racial pride in achieving collective progress.
The other reality is that if we do not create our own economic base, ownership of land, development of vertically integrated businesses, and the establishment of business organisations, such as the Association of Black Securities and Investment Professionals we will still be an afterthought when it comes to economic concessions and benefits.
I cannot think of any group in this country that has made significant economic progress without first building an economic infrastructure from which to leverage political favours. Can you?
ABSIP recognises the B-BBEE and sector Codes of Good Practice as a global ground-breaking innovative concept and an incentive-based approach.
That is why we have pushed hard for the Financial Services Sector Charter Council to become a driving force for inclusive sustainable economic growth. We have also been at the forefront of another ground-breaking concept of the Risk Capital Funding and Black Industrialists Funding as part of an alternative to the ownership element.
We have also been making a strong call on our members, including all the ABSIP Student chapter members, to become active citizens in civil society organisations to raise the narrative of inclusive sustainable economic growth.
Our role as ABSIP’s role will only come to an end once the objective of achieving a normal society where the wealth and income is owned by majority of Black people is in line with race and gender demographics.
Any meaningful economic transformation should be creating decent employment for all South Africans, eliminate poverty and deal decisively with extreme inequalities in our society, democratise the ownership and control of the economy by empowering the historically oppressed and restructure the economy so that it meets the basic needs of all South Africans.
That is why according to American civil rights activist, Marcus Garvey, “The most important effort for the exercise of independent effort (is) economics. After a people have established successfully a firm foundation they naturally turn to politics and society, but not first to society and politics, because the two latter cannot exist without the former”.
And Thomas Fortune, a journalist and civil rights activist, had this to say: “No people ever became great and prosperous by devoting their infant energies to politics. We were literally born into political responsibility before we had mastered the economic conditions which underlie these duties.”
How many more lessons and warnings do we need?