Ferial Haffajee claims there has been an explosive upsurge of the black capitalist class since the formation of the democratic government in 1994 (”The meteoric rise of South Africa’s black middle class”, April 1 to 8).
According to her, the rise of the black bourgeoisie went faster than the previous rise of the Afrikaner bourgeoisie which ”took 10 times longer to achieve the level of listed corporate ownership [at the Johannesburg Stock Exchange]”.
Similarly, Professor Ben Turok, an ANC MP, asserted that this class has ”taken off at an amazing speed” in the past five years (”The case of the black bourgeoisie”, October 3 to 9 1997).
The assertions of both Haffajee and Turok are misleading, because they neglect to take into account the history of the development of the black capitalist class in South Africa. This class emerged more prominently and significantly from the 1960s onwards.
Like other writers before them (both liberals and Marxists) they have treated the black middle class as something of a historical vacuum. During the past four decades, obvious indicators which explain the process of the growth of the black bourgeoisie have been discernible.
Firstly, there has been a parallel development in the black community of the bourgeois culture, such as the resort to private schooling and university education at families’ expense at local and overseas institutions.
Simultaneously, this culture went with the development of bourgeois lifestyles in terms of housing, leisure, entertainment and marriages, with a manifestly dynastic aspect (remember Brenda Fassie’s wedding in the 1980s?).
Furthermore, the parallel growth and regular publication of elite glossy magazines such as Tribute, Enterprise and Ebony served to celebrate their tastes, interests, and achievements.
Secondly, the development of the black bourgeoisie has been notable in the development, since the 1970s, of adjutant or auxiliary ranks of corporate technicians. For example, managers, lawyers, accountants, stockbrokers, insurers, medical specialists and psychiatrists, as well as ideologists, including academics and journalists.
They initially served and were subordinate to white capital, while they generated wealth and yielded surpluses in the sense Karl Marx described. Later, these corporate technicians formed their own companies, for example, Sam Montsi, Gaby Magomola and Don Mkwanazi.
Thirdly, there has been a progressive development of bourgeois class consciousness through a series of struggles with other class fractions and the apartheid state.
The National Federation of African Chambers of Commerce (Nafcoc)founded in the 1960s became an agency through which aspirant black capitalists expressed their class awareness and demands.
Although the history of Nafcoc has been controversial, its critics often misrepresented the nature and character of its relationship with the white-controlled state and capital. They merely dismissed it as a collaborationist group used by the state and white monopoly capital to realise the objectives of the National Party’s Total Strategy to ensure political control and stability in black residential areas.
More accurately, Nafcoc tried to maintain a ”precarious balance”. On the one hand, it entailed collaboration with the apartheid state in order, in its view, to get restrictions impeding the growth of black enterprises lifted, and to gain access to credit facilities and other forms of assistance.
The relationship also involved bargaining and obstructionism against government business initiatives and white business syndicates which proposed the establishment of 49%/51% partnerships between white and black entrepreneurs in order to penetrate the markets of black townships.
With this approach, Nafcoc risked tarnishing its delicate reputation in the black community. Businesses affiliated to Nafcoc were torched and destroyed, and its members maimed or murdered by people acting in the name of the liberation struggle.
On the other hand, it projected an image of being champions of the economic advancement of black people through the building of a separate economy for blacks.
This notion, learned from the African- Americans, especially the Negro Business League of Booker T Washington, appealed to nationalist sentiments by calling on blacks to support each other and keep ”black money” in their ”own hands”.
While the results of Nafcoc’s strategic choices remain debatable, evidence of the concessions it extracted from the government were nonetheless noticeable. Similarly, the costs in material and human terms of its relations with the white rulers were obvious.
Nafcoc’s loss of legitimacy led to the establishment of alternative class organisations, such as the Foundation for African Business and Consumer Services, an organisation with a similar focus and principles to Nafcoc, founded in 1988.
With the Black Management Forum, it popularised an idea misleadingly referred to as ”black economic empowerment” – misleading because it suggested socio- economic improvement of the general black population, yet it called for the enrichment of the minority black capitalist class.
The ”empowerment” proposition falls into three spheres of the advancement of the black bourgeoisie: shareholding and ownership; corporate advancement; and contracting black-owned small-, medium- and micro-enterprises.
Fourthly, since the 1960s there has been a significant growth in black-owned capital.
In the late 1970s and early 1980s it expanded into different spheres of the economy, such as retailing and wholesaling, transport, manufacturing, distributing, sports – especially soccer – service outlets and construction.
Assessing the size and strength of the black bourgeoisie has been difficult because most operated as privately owned family enterprises. But there were some clues to their successes. For example, in September 1988 Tribute magazine published a survey of the top 100 black business enterprises which had a turnover of more than R1-million annually.
In 1993, according to the Institute of Race Relations Survey, African General Insurance, Alex Hair International, Ga- Rankuwa Bakeries, Habakuk Cane Furniture and Khulani Holdings between them had turnovers of about R180-million.
The constraints imposed on the black capitalist class by the apartheid government, such as the prohibition on owning companies and restricted access to credit facilities, hampered their advance.
Many black enterprises had by the late 1980s stagnated and/or were overtraded in industries like retailing, hairdressing and transport. Many suffered as a result of inadequate or unsuitable premises, poor infrastructure and facilities, and political unrest. These difficulties were compounded by insufficient training, education and management skills; injudicious purchasing and marketing practices; limited knowledge of business legislation; and the activities of competitors.
Their break came in 1986, when the PW Botha administration passed the Temporary Removal of Restrictions on Economic Activities Act, a law initially intended to last for 10 months – until June 1987 – but which was extended several times until it was overtaken by the events of 1990.
This legislation allowed blacks to access bigger loans from the Industrial Development Corporation (IDC), allowing them to form companies outside the homelands. The loan which New Africa Investment Limited, under Dr Nthato Motlana, raised to buy the 10% of Metropolitan Life from Sanlam in the early 1990s was secured from the IDC. The law also paved the way for blacks to buy some of the state’s assets that were privatised – hence the formation of National Sorghum Beer in 1987.
Lastly, the African National Congress has since its inception sought to promote the interests of this class, as well as other classes. During the liberation struggle, particularly before the ANC’s banning in 1960, it articulated an ideology favourable to the development of the black capitalist class.
Upon its return from exile it continued doing so, and on assuming the reins of government it has enthusiastically supported the development of the black bourgeoisie through legislative and administrative actions. Yet the help the black bourgeoisie receives through preferential state contracts should not be exaggerated.
The Government Communications and Information Service’s 1998 report, for example, states that ”since 1996, 47,3% of tenders went to companies with previously disadvantaged individuals equity”.
Some of these ”previously disadvantaged individuals” are accused of being white corporations using ”ghost” black directors or front companies in order to win ”empowerment state contracts”.
The black bourgeoisie has been long in the making and is destined to grow further. It has not yet permeated all sectors of the economy, and its role in the present dispensation is unclear, but its supporters argue it will be to provide stability to what is often call the current neo-liberal era.
Sipho S Maseko is a senior lecturer in the department of political studies at the University of the Western Cape. He is currently writing a doctoral dissertation on the black capitalist class in South Africa
ENDS