By Bonang Mohale
It must look different to break the cycle that a poor mother begets poor children, that poverty has a black and feminine face, that the place of work is in town, that townships are under development and suburbs are prosperous, that supervisors and managers are generally white males and janitors are largely black and women, that landlords and farm owners are white and tenants and farm workers are black, that the owners of capital are white and borrowers are black, that the public sector is unprofitable, corrupt, inefficient and ineffective and the private sector is profitable, effective and efficient, etc.
It is common cause that before democracy, the public sector had the best resources, albeit exclusively reserved for the white minority. With the advent of the democratic constitutional dispensation in 1994, South Africa has not succeeded in dedicating more resources to extend coverage to the hitherto excluded black majority. And yet, we knew that no people can be helped by, nor benefit from, institutions that are not a direct result of their own character.
Twenty-nine years into democracy, it is self-evident that we, collectively, have not succeeded in eradicating the legacy of apartheid. South Africa is the only African country that, after independence, did not substantially increase both its educational outcomes and ownership of the economy by its indigenous people, by double digits. We are still spending far less resources on educating a black child, even though we know that education is the surest way of transcending social classes.
The little economic activity that was present in townships and former homelands including the national infrastructure inherited from the apartheid government has been allowed to decay and go to waste. We built more rickety, less robust, unstable RDP houses than the four-roomed houses of apartheid townships that are still standing to this day. When shopping malls mushroomed in the townships, the world was replete with examples that it is the black shop owners that will be decimated. And yet we did not insist on these shopping malls being owned by the very same black shop owners.
As the old South Africa prohibited casinos except in the former homelands, we had an opportunity to issue new casino licences to black businesses rather than these also going to the usual suspects. Corruption killed even businesses that were originally stolen from black people like mageu, sorghum beer (which later became National Sorghum Beer), funeral parlours, stokvels, African Bank, etc.
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Whilst the apartheid government used the more than seven hundred and forty state-owned entities to spawn more white-owned SMEs, we chose to embark on a industrial scale looting spree (Eskom, Transnet, PRASA, SABC, Denel, SAA, SAPO, SANRAL, SSA, UIF, NSFAS, etc.).
When other countries put their best foot forward in appointing ambassadors, whose primary purpose is to promote trade between the two countries, we continue to use embassies as a refuge to hide deployed cadres that have actually broken the law. It is no accident that we inherited a fragmented, unequal and divisive dispensation relating to all aspects of land, which was derived from our colonial history and further structured to serve the segregation objectives of the apartheid dispensation.
Land reform initiatives to address the destructive impact of colonialism and apartheid have not progressed at the desired pace due to corruption, sometimes giving rise to expensive and protracted litigation, to the detriment of the poorest of the poor and most vulnerable in society. The essence of South Africa’s struggle for freedom, equality and justice is land dispossession as recognition that it is the primary means of production and yet upon attainment of our freedom, not much attention is given to land ownership by black people!
The Land Court is still not permanent, does not have a permanent judge and its ministry still has the smallest budget. We have not put in place the requisite legislation to give effect to section 25 of the Constitution of the Republic of South Africa, 1996, which is enshrined in the Bill of Rights which obliges the state to take reasonable legislative and other measures, within its available resources, to foster conditions which enable citizens to gain access to land on an equitable basis and envisages the state taking legislative and other measures to achieve land, water and related reform, in order to redress the results of past racial discrimination.
South Africa continues to hold the world record for all the wrong reasons with the highest levels of inequality, unemployment, SME failure rate, femicide (five times the global average), lowest educational outcomes, the second highest suicide rate after Russia and the third best African country to invest in after Egypt and Morocco.
The racial profile of South Africa’s formal business sector looks much like it did before 1994. The intersection of race, class and gender that characterised the apartheid era continues. In part, this is a reflection of the extremely low levels of black participation in the mainstream of the South African economy. If a fundamental cause of such an anomaly was the marginalisation of the black majority, it follows that insufficient measures have been taken to significantly increase and expand black participation in the economy or it indicates that where measures have been in place, they have served to benefit a tiny elite rather than the general populace.
Structural impediments to economic participation clearly affect the efficient functioning of markets and the attendant effective redistributive mechanisms were held to be the panacea of post-apartheid economic redress. This has often served to reinforce the marginalisation of the majority from participating in the economy rather than effectively facilitating it. This is despite the myriad of transformative legislation like the 22nd Employment Equity (EE) Report for 2021 which still shows females at 26% (African females at 6%) of top management and males at 74% (African males at 11%), white people at 63%, Indian at 11%, coloured at 6% and African at 17%!
To ensure that everyone enjoys equal opportunity and fair treatment in the workplace, the Employment Equity (EE) Act, No. 55 of 1998 was enacted into law with the purpose to remove discrimination, implement affirmative action and to promote equity, equality, opportunity, remuneration and development for all employees in the workplace. The newly amended Employment Equity Act which will aid workplace transformation, will come into effect in 2023 to empower the Employment and Labour minister to regulate sector specific EE targets and to regulate compliance criteria to issue EE Compliance Certificates in terms of Section 53 of the EE Act.
In June 1993, the Black Management Forum (BMF) set up an Affirmative Action Commission, consisting of twelve members to look at key aspects of affirmative action! This found expression in our Constitution as the Employment Equity Act. Chief among South Africa’s political success is the country’s Constitution, which was written in 1996.
Early Black Economic Empowerment (BEE) focused on increasing black ownership of large businesses. However, white-owned companies entered into BEE transactions to diversify the demographics of their shareholders only voluntarily and, in the absence of organised sources of capital, many of the black participants relied on highly-geared financing structures and special purpose vehicles (SPVs). Several BEE deals thus collapsed during the Asian financial crisis of the late 1990s. According to estimates, black control of business had risen to about 10% of shares on the Johannesburg Stock Exchange by 1998 but, following the financial crisis, fell dramatically to between 1% and 3.8% by 2000.
Meanwhile, the promotion of black empowerment in areas other than ownership was pursued piecemeal, especially through a series of laws including the 1998 Skills Development Act and the 1998 Employment Equity Act. Amid dissatisfaction with the progress of existing initiatives, in May 1998 the Black Management Forum (BMF) under the aegis of the Black Business Council (BBC) appointed Matamela C. Ramaphosa to chair a BEE Commission.
The Commission proposed a broad definition of BEE as an integrated and coherent socio-economic process. It is located within the context of the country’s national transformation programme, namely the RDP. It is aimed at redressing the imbalances of the past by seeking to substantially and equitably transfer and confer the ownership, management and control of South Africa’s financial and economic resources to the majority of its citizens. It seeks to ensure broader and meaningful participation in the economy by black people to achieve sustainable development and prosperity.
The Commission also proposed the passage of focused BEE legislation and the adoption of an integrated national strategy on BEE, comprising a set of simplified and coordinated guidelines and regulations applicable across the economy, to be implemented by an oversight body reporting to the cabinet. On some views, the Commission was influential in bolstering support for the broader approach ultimately taken by the government to BEE. The Broad-Based Black Economic Empowerment (B-BBEE) Act 53 of 2003 intended to establish a legislative framework for the promotion of black economic empowerment; empower the minister to issue codes of good practice and to publish transformation charters; establish the Black Economic Empowerment Advisory Council and provide for matters connected therewith.
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