Building companies seek answer to stasis

South African Nobel prizewinning author Nadine Gordimer saw fit to quote Italian political theorist Antonio Gramsci in her famous musings about living in SA’s “interregnum” in the early 1980s.

“The old is dying and the new cannot be born; in this interregnum there arises a great diversity of morbid symptoms,” the founding member of the Communist Party of Italy, who was later imprisoned by Benito Mussolini’s fascists, once said.

Gramsci’s pithy brilliance perfectly describes SA’s situation. Apart from a honeymoon period just after April 1994, the country is again in stasis, characterised by ambiguities, uncertainties and contradictions.

SA is both the most advanced country on the African continent and a relic of the past. But an answer to the crisis may have been found in the trajectory that JSE-listed construction and engineering companies Murray & Roberts, Aveng, WBHO, Stefanutti Stocks, Raubex, Basil Read and Group Five have unequivocally taken.

In a deal with the government, the construction industry has been changed forever. Murray & Roberts will exit infrastructure and building markets in SA, selling this business to black-empowered interests.

The other groups will sell majority stakes in their domestic businesses to black-owned groups or mentor them to acquire skills and turn over billions of rand.

Gramsci also said that the challenge of modernity was “to live without illusions and without becoming disillusioned”. This sentiment has been captured by Gordimer.

“In the eyes of the black majority, [whites] will have to redefine themselves in a new collective life within new structures. [It] is not a matter of blacks taking over white institutions, it is one of conceiving of institutions — from nursery schools to government departments — that reflect a societal structure vastly different from that built to the specifications of white power and privilege.”

Two big empowerment deals are in the offing for banks: Sasfin’s potential sale of 25.1% of its shares to Women Investment Portfolio Holdings (Wiphold), representing about R462m of the bank’s market capitalisation; and Barclays Africa’s as-yet-unspecified plan to sell shares to black shareholders with a R2.1bn boost from its UK parent.

In Sasfin’s case, a deal with Wiphold would replace a lapsed empowerment scheme with Zakhe Khuzwayo’s InnoVent, which previously owned 10%.

Barclays Africa’s Batho Bonke deal, in which empowerment groups owned 10% of Absa, matured in 2012.

As parliamentary hearings on transformation in banking progress, it has become apparent the two banks are concerned about the “once empowered, always empowered” rule.

The Banking Association of SA has claimed 26.4% black ownership, while the B-BBEE commission has argued that the pace of transformation was too slow. The “once empowered, always empowered” rule says that an empowered company retains its empowerment credentials even after its black partners have sold their interest in the company.

The rule is hotly contested in the mining sector.

Such a debate in the banking sector is long overdue and it needs to consider the benefits of black ownership and what it does for ordinary people.