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BEE alone can’t break the vicious circle

The poor quality of education delivered by the public school system is blighting the prospects of the black majority. It rubbishes the intention and effects of affirmative action and black economic empowerment (BEE).

Window-dressing black economic empowerment will not be a thing of the past until something drastic is done about expanding the pool of educated and skilled black people to take up key positions in the private sector, both as professionals and as successful entrepreneurs.

Highly skilled jobs require high levels of educational achievement and technical training. Previously disadvantaged groups need to acquire higher levels of training and education to migrate from lower-skilled jobs to higher-skilled ones.

Developing entrepreneurs means creating an environment in which  innovation and risk-taking are encouraged and appreciated. Only an education that produces thinkers and inventors, producers of new ideas rather than receptors and reflectors of other people’s ideas, can ensure the flourishing of an entrepreneurial spirit among the black majority.

The ANC government has applied its mind to undoing the institutionalised discrimination that barred members of some race groups, especially blacks, from participation in highly skilled occupations. Affirmative action was adopted in the Employment Equity Act  of 1998. Because apartheid was buttressed by laws that limited the economic and political prospects of some groups, the Act affirms that “simply repealing those laws will not effect the constitutional right to equality and the exercise of democracy”.

Unfair discrimination
The Act’s objective, in the main, was to remove unfair discrimination in the workplace and ensure the equitable representation of previously disadvantaged groups at all levels, categories and sectors of the workforce. Accordingly, in the recruitment and selection for jobs, previously disadvantaged groups should be preferred to whites. Where necessary, employers should adjust job requirements to accommodate these groups, especially blacks.

In addition to the Act, the government acknowledged that it could not only look to existing enterprises to absorb and uplift black labour. The Broad-based Black Economic Empowerment Act followed in 2003.

Broadly speaking, black economic empowerment is aimed at “increasing the number of black people that manage, own and control enterprises and productive assets” to create “new enterprises undertaking new forms of economic value-added activities” and to promote programmes that will result in the development and economic participation of rural and local communities.

By 2004, six years after the first Act, African and coloured employees were still concentrated in lower-skilled categories, and Indians and whites dominated the high-skilled occupations. According to the labour force survey conducted by Statistics South Africa, only 19% of African employees worked in the high-skilled occupations, compared with 55% of whites. More than 55% of Africans were in lower-skilled jobs.

In the same year, the department of labour’s employment equity report largely confirmed these findings. It found that more than 70% of Africans were in low- and semi-skilled jobs. The department’s 2009/2010 employment equity report reveals that not much has changed 12 years after the Employment Equity Act was enacted: African workers continue to swell the ranks of the unskilled, making up more than 80% of this category.

Limited success
Like the Act, black economic empowerment has had limited success. There has been a narrow focus on changing the racial composition of existing enterprises by facilitating the transfer of company shares to blacks. It has not focused sufficiently on building up the entrepreneurial prowess of black people in general, but has instead facilitated the rise of a small black business elite.

Black people have yet to make a real dent in patterns of ownership, which are still largely in favour of whites. This is largely because of a poor culture of entrepreneurship. According to the total entrepreneurship activity index, in 2010, early stage entrepreneurial activity in South Africa was 8.9% compared with 17% in Brazil, 14.4% in China, 32.6% in Zambia, 32.4% in Angola and 31.3% in Uganda.

What is limiting the efficacy of black economic empowerment and the Employment Equity Act?

The labour force survey for the first quarter of 2012 found a correlation between lower unemployment rates and higher levels of education: “From quarter one in 2008, the unemployment rate for persons without a matric was higher than [for] those with matric or a higher education level.”

The limited improvement derived from BEE and the Act can be linked to the poor educational outcomes of the country since the end of apartheid. Jenny Cargill’s reflections on this in her book, Trick or Treat: Rethinking Black Economic Empowerment, are appropriate: “We need advancement in both quality of education and access for black scholars to ensure enough human resources to finance a turn­around in black disadvantage.”

Diminishing occupational value
The failure to empower the black majority through education is diminishing its occupational value, limiting prospects for selection and restricting attainment of personal ambition. Cargill says that “today, the government has achieved significant improvement in access to education, but results point to a national crisis: the quality of education is poor indeed … As it stands, education may well become the Achilles heel of BEE”.

It is not enough for the government to glory in the fact that it has broadened access to education to meet the target of 100% coverage for grade R by 2014. The more vital question is: How will the government increase the number of competent, university-ready, workplace-proficient and entrepreneurially savvy young people, and blacks in particular, the education system is producing?

Failure to address this question renders all policy interventions in the interests of socioeconomic transformation meaningless. It will take quality education to enable many to realise the noble intentions of affirmative action and black economic empowerment in South Africa.

Nompumelelo Sibalukhulu is a researcher at the Forum for Public Dialogue (fpd.org.za)

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