Free empowerment from straitjacket of last-mile retail
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.