OWN CORRESPONDENT and REUTERS, Cape Town | Thursday
ATTEMPTS to bring South Africa’s black majority into the economic mainstream have failed and must be replaced by a new law to force the pace, says leading businessman Cyril Ramaphosa.
“Black people remain at the periphery of the economy. They need access to funding and markets,” says Ramaphosa, an active member of the African National Congress before he joined the private sector in 1997.
He says black economic empowerment has failed because government ineptitude meant implementation had been left largely to white-dominated private enterprise.
“The government started many initiatives but quite often the right hand did not know that the left was doing. Black economic empowerment has been implemented in an inadequate way. As a result, black penetration in most sectors of the economy remains miniscule,” he told parliament’s trade and industry committee.
Ramaphosa is heading a special commission on black economic empowerment that will report to President Thabo Mbeki in October, and he proposed a new Black Economic Empowerment Act, which would provide guidelines to public and private sectors.
The act should create a National Empowerment Commission, a National Procurement Agency and a National Empowerment Funding Agency, he says.
The procurement agency should direct at least some of the R110bn spent by government departments yearly on procurement to black-owned small firms, while the funding agency would tackle the chronic shortage of funds for such small firms.
Alongside the central Black Economic Empowerment Act there should be a strategy to promote domestic investment, the lack of which tended to act as a brake on potential foreign direct investment. These in turn would be accompanied by an integrated rural development strategy managed through a New Rural Development agency, a human resources development strategy and restructuring of the public sector.
“This country still has one of the most unequal distributions of income in the world,” he says. The consequences of apartheid are such that they can only be reversed by all people in our country becoming actively involved in our economy.”
The black economic empowerment commission has proposed wide-ranging recommendations to reinvigorate black economic empowerment, stimulate fixed investment and accelerate economic growth.
Ramaphosa revealed an outline of the full package of the commission’s proposals for the first time yesterday.
MPs described the document as “very impressive”.
“To avoid a [Zimbabwean] situation where everyone woke up too late, we must take active steps to do something,” Ramaphosa says.
The report was compiled on behalf of the Black Business Council, a federation of 11 black business organisations, and is expected to be presented to a national consultative conference to be attended by about 700 delegates on September 29.