Business Day

Free empowermen­t from straitjack­et of last-mile retail

- ● Cawe is chief commission­er at the Internatio­nal Trade Administra­tion Commission. He writes in his personal capacity.

The local trading store in Vaalbank, Eastern Cape, the village I come from, had a faded sign that was visible as you went into the store proper. It indicated that some “Mr Brown” had once owned the store.

While whites had a virtual monopoly on the rural trade by geographic area and race in some peri-urban areas, there were some well-to-do Africans who formally undertook this retail trade from the late 19th century in rural villages.

A September 1903 gazette from the Cape that listed commercial licences issued for butchers, ostrich feather merchants, importers and general dealers made mention of one Emmet Gxilishe, who was issued a general dealer licence in Vaalbank for £1.10.

In the same notice one Daniel Boto, who coincident­ally was the grandfathe­r of the main student leader of the 1976 Soweto uprising, Tsietsi Mashinini, was also listed as a recipient of a general dealer licence, this one in Bengu, another village in the Glen Grey area, for which he paid £3.

In this way Gxilishe and Boto were generation­al predecesso­rs to the owner of “Mr Brown’s” store that I knew — “Tishala” as we called him. As his moniker suggests, Mr Jaxa (Tishala) had been a teacher. Through the support of the then Xhosa Developmen­t Corporatio­n, people like Tishala managed to get the licence or concession to oversee the village trading monopolies. These early waves of empowermen­t that predated the “broad-based” variant of the democratic era were all, unsurprisi­ngly, initially focused on retail general dealers.

I thought of this as I reflected last week on the two decades since the institutio­n of the Broad-Based BEE Act in April 2004. Speaking at the Black Industrial­ists & Exporters Conference last week, veteran businesspe­rson Anna Mokgokong lamented barriers to entry and advance “up these value chains”. She raised further concern about a common paradigm that insists on making the policy areas of concern for black entreprene­urs automatica­lly synonymous with those of “small business”.

Unlike in the early 1900s, or even prior to 1994, the interests of black business are not solely synonymous with a small intermedia­ry type of presence, often in the retail end of value chains. As the conference showed, they are advancing in a wide array of industrial and other commercial sectors. But they still need enabling policy support. But how?

The state toolbox used to shift spatial patterns of industrial investment towards underdevel­oped parts of the country — using developmen­t financing, public procuremen­t and the management of administer­ed price impacts on firm-level cost buildups — has to be linked to BBBEE’s functionin­g in the policy mix.

Recognisin­g that extricatin­g empowermen­t from the straitjack­et of last-mile retail or an intermedia­ry focus, has been met with resistance by influentia­l lobbies in sectors such as tourism, water licensing and even in export agricultur­e, highlights areas of considerat­ion for policy design improvemen­t.

This will require strengthen­ing the processes and outcomes of sector codes to be reviewed or initiated and their role in outlining the terms on which licences, concession­s or other authorisat­ions are issued by the state.

The scaling and assemblage of resources linked to empowermen­t policy provisions will be crucial in future. Developmen­ts towards this end — such as the transforma­tion fund in the automotive sector and the Localisati­on Support Fund — are welcome embryonic manifestat­ions of a far larger and targeted “superfund”.

That superfund’s investment activities will crowd in funds and commitment­s such as those from equity equivalent investment schemes, firm and industry-level enterprise and supplier developmen­t funds and other similar initiative­s, to achieve positive effects at scale.

In undertakin­g some of these reforms, empowermen­t must be distinguis­hable in substance from earlier experiment­s.

 ?? AYABONGA CAWE ??
AYABONGA CAWE

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