The South African government has been told that progress has been very slow in achieving black economic empowerment (BEE) in South African business, with government itself contributing little in terms of procurement from black business.
This emerged in a meeting between President Thabo Mbeki and his economic cluster ministers on Tuesday, including Minister of Trade and Industry Mandisi Mpahlwa, Minister of Finance Trevor Manuel and members of the presidential black business working group.
The two parties met at Tuynhuys, the presidential office, to discuss a variety of issues including the Accelerated and Shared Growth Initiative of South Africa (AsgiSA), ways of fostering financing for black business and progress in BEE in general.
At a media conference, a member of the black business group, Loyiso Mbabane, who heads the business and enterprise school at the University of Fort Hare in the Eastern Cape — and who carried out a survey on the progress of black empowerment in November last year — said that the private-sector spend on procurement from black companies is only 3% and “a worrying sign [is] that government is not spending that much either” — about 10% of procurement spend.
His survey of the top 200 companies listed on the JSE Securities Exchange found that only 27 have 25% black ownership and only five of them have 50% or 50%-plus ownership. This translates into just 1,2% black ownership as a percentage of the JSE’s total market capitalisation. The rest is in white hands.
The chair of the working group, AMB Capital’s Peter Vundla, said the group impressed on government that there is a need for a more reformist target of BEE. They want targets to be revised more frequently.
In a statement released by the Presidency, it said government is committed to completing a study on the state of BEE on the basis of which a comprehensive discussion between the government, black business and other sectors will take place. A joint task team will be set up to organise the meeting before the end of the year.
Mpahlwa told the media briefing that government is studying the reduction of the complexity of black economic codes, “the totality of things that you have to measure to get a picture [of empowerment success]”. He is certain that the number of indicators will be substantially reduced. His department is to put a report to Cabinet shortly, he said.
He said on the employment-equity issue that there had been 13 indicators to measure, but these have been reduced to three. He also pledged to improve government’s payment system to small business to assist cash-flow concerns.
In the statement, the Presidency reported that Minister of Safety and Security Charles Nqakula briefed the meeting on the crime situation in South Africa and noted that crime had been declining steadily since 1994.
Other members of the 24-member business working group were Mpho Nkeli from Alexander Forbes and Siemen’s Bheki Khumalo, who is a former spokesperson in the Presidency. — I-Net Bridge