There has been progress since 1994. South Africa now has a black middle and upper middle class but the means of production remain largely owned by white people and black people swelling the ranks of labour. Photo: Mujahid Saofodien/AFP)
We are witnessing the different calls to end broad-based black economic empowerment (broad-based BEE) and transformation in general. There seems to be a layer of peddling specific narratives across society about the failures and consequences of broad-based BEE and affirmative action, which are gaining momentum, and thus a response is necessary to remind each other of what transformation is.
In the words of former Black Management Forum president Lot Ndlovu, “The new economic dispensation should match the aspiration for economic freedom and the fulfilment of the highest ideals of our democracy.” The political changes in the country in 1994 did not amount to transformation in and of itself, but the new political order created conditions for transformation to take place.
Building a school, sporting facilities or a clinic does not amount to transformation in its fullest extent. These activities are part of economic development of any society in the world and should not be seen and understood as the end result of transformation.
The argument that is tabled by Ndlovu’s words is that our aspirations as a country are embedded and anchored on how we can conduct our economic affairs in a new way, by separating from the past and embracing these noble ideals that democracy has afforded us. Democracy cannot thrive in an environment where the economic order underuses or undermines human freedom and capabilities. Therefore, the economic order that we run must match our aspirations for economic freedom, otherwise our efforts in becoming a world class country will not be achieved. So, the focus after 1994 under new conditions is that we need to unleash the potential of the country by being bold and intentional about our development and uplifting black people and freeing our white compatriots from the past.
We have seen since 1994 the behaviour of both black and white people in the process of transforming the country. On the one hand, we have experienced detractors of transformation coupled with tokenism and silence from some quarters. On the other hand, we have also seen the power of legislation and how it can unlock opportunities through business and the public sector. The prevailing noise in the country today is that the transformation process has not yielded the expected outcomes, which in the main is true, but throwing out the baby with the bath water cannot also be equally true.
The understanding of the Constitution should lead us to view transformation in a variety of different ways. Here is my proposed approach, which I have written about before, that incorporates three facets of transformation.
Transformation as a science seeks to measure the progress of black people in terms of their socio-economic prosperity in a democratic dispensation. This centralises research and development as a cornerstone of economic transformation, forcing both government and business to invest in proper research.
Transformation as a craft seeks to create policies and frameworks that will drive the inclusion of black people into the mainstream economy. This is then the legislative framework and the work of government. All policies and pieces of legislation must be driven by eliminating poverty, inequality and unemployment. In business this would take the shape of having transformation as the life blood of business, from top leadership to the last employee. Woven into the life of business should be breathing and thinking about transformation, daily. The power of management would be charged with creating a more equitable working environment from remuneration policies, appointments, recruitment, skills development, ownership and ESD, supply chain to procurement.
Transformation as an art seeks to deal with the mindset of society around creating a new society, which is fundamentally distinct from what was there prior to transformation efforts. Building it from the ground up and focusing on values and principles. This would entail accepting that Apartheid succeeded in developing unethical leaders in both government and business who intentionally abused the majority to build their wealth. Business fulfilled the economic mandate of apartheid. Therefore, a new value system is needed that will create the kind of leaders who will champion this transformation. Every sector of society will need to be clear on their role in this regard, as to how a new value system can be created and maintained. Business would need to denounce its racism and demonstrate that it is on a new path, and not what we are seeing today by crowding out black leadership and black business. It is pleasing to see that through the work of V20 South Africa that values are the heartbeat of its mandate and it is a privilege to be part of this work, driving awareness of values in the country.
So transformation is not just about change, it is a fundamental shift in all areas of society, in how we think and make decisions, in how we develop law and policies, how we do business, with a deep understanding our past and wanting to create a different country based on good social values and giving equal opportunity to all. Economic theory can also assist us here. We know that the factors of production are the following — land, labour, capital and entrepreneurship. In the country today we are well aware that we have acute challenges with all four factors, with heavy concentration of white people owning the means of production and black people swelling the ranks of labour in most cases. This cannot be the future of our country, where the majority are narrowly focused on being labourers and not owners. In most sectors we still have three to four major players that dominate, and this is part of the legacy of the past.
Therefore, broad-based BEE is the engine of transformation, and the economy is the engine of reconciliation. We cannot talk of reconciliation without talking about the economy, and we cannot talk about the economy without talking about broad-based BEE as its engine. Ownership is the engine of broad-based BEE, coupled with controlling and managing the economy. The three keys to transformation are therefore ownership, control and management. These ought to be the key focus of every transformational discussion and discourse. They are also supported by other elements and the whole transformation infrastructure in the country.
Business and government have been invited to embrace broad-based BEE and affirmative action as a tool and measure of transformation. Business is central to society, for it produces goods and services that are needed by society. Therefore it must look like the society it operates in, not just in rhetoric but in substance. When people identify with the business they work for, energy and commitment follow effort and drive higher productivity. The government must protect the transformation process by ensuring that the conditions for business to operate are conducive so that goods and services can be produced.
Therefore we need to create a critical mass through these three key aspects to unleash the potential of the country. A critical mass in simple terms is the minimum size or amount needed to propel a process or system forward, without any further intervention. When we pay attention to the damage caused by both colonialism and apartheid, which succeeded in their mandate to desecrate black people, a critical mass of black people is needed at every sphere of economic activity to unleash the potential of the country. Without reaching critical mass at all levels will harm all efforts to resuscitate the dilapidating economy.
There is also an attempt to separate economic growth and transformation and positioning transformation as a costly exercise that needs to be scrapped, including that only a few black people have benefited. This logic is greatly flawed and disingenuous. We today have the black middle class and upper middle class because of these laws. Second, broad-based BEE ownership transactions have created value for shareholders, communities and employees. While not sufficiently adequate, this can be measured. Affirmative action through employment equity has opened the door to black people moving into management, but at top leadership Africans remain below 20%.
We remain the most unequal society in the world, and if broad-based BEE and affirmative action — which drives ownership, control and management in transformation — is removed, what will drive ownership, control and management control in the country?
As Ndlovu said, our aspirations of economic freedom must match our economic dispensation, we have a right to be ambitious, to be this clear that the economic order in our country must be aligned to our collective aspirations to be economically free, free to move, free to think, free to be, free to create a new country.
Monde Ndlovu is the managing director of the Black Management Forum.