Transforming SA’s economic landscape requires boldness from government & business

Minister of Water and Sanitation Nomvula Mokonyane File picture: Phill Magakoe/ANA Pictures

South Africa is a country of extremes. Our responses to issues of national discourse also reflects this. And sometimes in our collective (albeit legitimate) displeasure at certain aspects of life in the Republic, we fail to count small victories or even recognize that these milestones are pause for reflection that there are things that work and which affects people positively. 

A major increase in black participation in the economy needs to happen if the country is to weather the storms of global financial crises more effectively, whether it is in training unemployed solar installers, increasing the number of black owned and managed petrol station owners, for example, or in trying to increase the number of black industrialists.

Simply put, economic transformation is crucial to all who live in South Africa and the government will continue to pursue programmes and objectives that uphold socio-economic objectives that benefits and uplifts the millions of citizens it is mandated to serve.

Much more needs to be done to get more people to participate in the economy. For example, the government’s Black Industrialists Programme is making great strides in empowering black people.

Recently it announced black industrialists signed a Memorandum of Understanding between the Department of Trade and Industry and the Department of Economic Development, Environment and Tourism of the Limpopo Provincial government regarding the launch of a multi-million-rand expansion project.

Over the past few years the National Empowerment Fund (NEF) has entered into agreements with oil companies to facilitate the purchase of more service-station outlets by black entrepreneurs. Again, it is important to point these occasions out as they change the lives of individuals, their families, their communities and should serve as an inspiration to the majority of South Africans.

The NEF, which is to be a subsidiary of the Industrial Development Corporation told Parliament it would require an annual allocation of R2 billion over the next five years so as to fulfil its mandate to promote black ownership of a still largely white dominated economy.

The NEF told Parliament that to reach 25% of black control required an additional 22% (of shares) worth R3.2-trillion of the market capitalisation of the JSE. Issues of transformation must be addressed as soon as possible and the government should not tread lightly when it comes to especially big business. 

Events in recent weeks involving ostensibly reputable companies worth billions has shown the rot in the corporate world – these behemoths do not have South Africa’s developmental agenda as part pf their strategy.

Recently, in commenting on the public hearings into the finance sector, the Standing Committee on Finance (SCOF) and the Portfolio on Trade and Industry’s (PCTI) first report on Financial Sector Transformation, the committee stated that ‘the participants in the hearings were very polarised, with stakeholders representing financially marginalised constituencies expressing huge frustration and anger at the failures of the financial sector. The pace of transformation, they insist, is far too slow, and they blame both the dominant players in the financial sector and the government. 

It further suggested that ‘there was a sense in which every frustration these participants have with the effects of the slowdown in economic growth and increasing unemployment became concentrated on the financial sector. It was almost as if they were holding the financial sector responsible for every ill in the economy. Given the crucial role that the financial sector plays in the country’s economy and in economic growth, this is perhaps understandable.’

‘The dominant players in the financial sector insisted that there has been significant transformation. It is clear that a significant number of stakeholders distrust and are even suspicious of the dominant corporates in the financial sector, and the committee believes that these dominant players need to reach out more to those stakeholders, their own customers and the general public to explain what they have done to transform the financial sector.’

It is clear that business has to do more to become more inclusive of its approach to developmental and transformation issues in South Africa. Hiring a few black faces does not mean anything if it is done to make up numbers so that your employment scorecard looks great,

Government needs to enforce legislation more effectively and set specific timelines. Companies who have existed for a while surely have the organisational agility and ability to reassess as well as re-adjust its structure and employment policies.

The committee noted that there is a real need for the sector to transform more effectively and sustainably, within reasonable timelines, otherwise it will contribute to the social explosion looming in the country.

Big business and the government need to come to the party if we are to decentralise and democratise our society. If not, we will be engulfed in, to quote the committee, a social explosion. 

Nomvula Mokonyane is the Minister of Water & Sanitation and a ANC NEC member