Economic growth and transformation are intertwined

Apr 25, 2024 11:40:37 AM

"From annual compliance reports submitted to the B-BBEE Commission over the 6 years since established, black ownership hovers around 30% on average in any given year; and black women ownership hovers around 14% on average."

By Tshediso Matona, Commissioner: B-BBEE Commission

The year 2023 marked 20 years since the law for Broad-based Black Economic Empowerment (B-BBEE Act) Act was passed to enable active measures to redress past economic injustice against black people during Apartheid, and promote inclusive economic growth from the broadest participation of the population.

Naturally, this year has witnessed much public commentary about B-BBEE, which is welcome and will continue, as 20 years of B-BBEE calls for critical reflection on whether the purpose of B-BBEE is being achieved, it being about one of most profound and defining policies of post-apartheid South Africa.

But the BEE debate has to be structured for it to be constructive, because ultimately it is about our collective future as South Africans, and it is about our identity as a nation.

An extreme view, representing minority interests but unhelpful, is that BEE has failed and must be discarded, and no credible alternative is offered for addressing continuing economic exclusion of black people.

The truth, on the other hand, is that economic transformation in South Africa is a mixed picture of important inroads in some sectors, and of stagnation in others. But fundamentally, transformation has been extremely slow, viewed from the lens of the B-BBEE Act, the lens of 30 years of democracy, and the lens of the Equality clause of the Constitution.

It cannot be acceptable nor sustainable that white people in South Africa make up 7.3% of the population and own and control anything from 70%-80% of the economy; while black people are more than 90% but own anything from 10%-25% of the economy. Moreover, research by economist Duma Gqubule puts black ownership in 50 JSE-listed top 50 companies at 1.2%, out of total JSE market capitalization of R18-trillion.

From annual compliance reports submitted to the B-BBEE Commission over the 6 years since established, black ownership hovers around 30% on average in any given year; and black women ownership hovers around 14% on average.

It cannot be that South Africa has the infamy of being the most unequal country in the world, while the country is so well endowed in resources and opportunities; human capital and youth; in national diversity and resilience; and in international networks. This label jars with a world that is more and more accepting of concepts of empowerment and transformation by governments and business, as represented by for example Sustainable Development Goals (SDGs) under the United Nations, or the emergent Environment, Social and Governance (ESG) movement of business as a force for good, in partnership with governments.

It is important to also appreciate that historical and ongoing barriers to equitable black economic participation, are the self-same factors accounting for the economy’s low growth, high unemployment, and high inequality trap, namely poor education and skills; lack of entrepreneurial skills and experience, lack of access to finance and markets; spatial location far from economic hubs; lack of infrastructure. In turn, these economic factors account for myriad social ills in the country, including crime, because too many citizens, especially youth, are spectators of the economy and have no stake or belonging in the future of the country.

Read the full article in the 23rd edition of Top Empowerment

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