BEE transformation claims are big fat cat lies

THE BIGGEST lie told by black economic empowerment (BEE) fat cats is that they’re transforming the economy. Nothing could be further from the truth.

Since the dawn of democracy and the advent of the BEE Act, most of those who earned themselves lucrative “BEE deals” (read politically connected individuals) have seldom built any successful businesses from such transactions. Most were never entrepreneurs anyway and know nothing about day-to-day operations of the very business they’re supposedly now shareholders/partners.

This has contributed to this stunted economic transformation. After collecting free millions and in some cases billions of rand for some, those Corporate SA companies continue to trade without any real changes in the status quo. The only change would be having a few black names on the company’s letterhead.

After a few years of this sham, BBBEE was parachuted to counter the argument that BEE was only benefiting the individuals above. This was meant to pacify black employees in these companies who are first hand experiencing that nothing changes at them, irrespective of having these BEE fat cats as shareholders.

Lately, there are some attempts to bring black SMMEs into the mainstream through the SME Supplier Development Programme. In most cases there’s no clear strategy, hence most corporates have created the chief transformation officer post, a rather ineffective position just like that Ministry of Small Business – story for another day.

The story of BEE fat cats is well documented. The story that is not told, though, is that the few blackowned businesses that came as result of the BEE policy are also not doing business with black suppliers (mostly SMMEs), exacerbating the problem.

Recently the Black Business Council held its annual summit. The usual suspects were there in numbers. Same same was discussed (the President and some ministers were there and so were the opposition political parties). Gala dinner, dancing, loud laughs… yawn.

One of the leading black BEE doyens recently launched a bank. Now here’s what’s interesting for me.

As an Adman, I think I have a pretty good take on the advertising industry. This new bank’s advertising agency partner is not black owned. Just looking at this, I doubt very much if their legal partners are a black-owned law firm right though the value chain – take a pick.

This is an elephant in the room that no one wants to confront. Pushed into the corner, most so-called black business people will tell you about building a new non-racial South Africa all of a sudden.

Yet when they’re still looking for business deals, they are firm lobbyists for black participation in the economy. Which begs the question, who really runs these so-called black businesses or companies?

We cannot continue to talk about black economic empowerment with forked tongues. It is time these black companies walked the talk and empowered black suppliers by procuring goods and services and developing programmes to assist those who require certain skills, etc. To expect corporate South Africa to perpetually pull black companies up when black companies cannot do it is downright disrespectful and doing more damage to real economic transformation.

MXOLISI G BUTHELEZI

Entrepreneur at Entrepreneurship based in Johannesburg

BLACK BANK THE WAY TO GO

THE MOOTED plan by the Black Business Council to establish a black commercial bank should be given a nod as there’s a need for alternative banks to cater for working class people.

Considering the calibre of the proponents behind the plan, the bank is predestined to transform the lives of black people and material conditions on the ground.

For reasons of timing, it will have a material impact on black people and liberate them from the present-day discriminatory practices driven by greed for profits.

It’s expected that the majority of people would support the bank to grow rapidly and give the so-called major banks an intelligent competition. The bank can benefit from the missing-middle hurdle, which has been the key restraining factor in the development of our communities to make substantial gains on credit extension to black entrepreneurs.

The bank would certainly register positive performance in terms of a sustainable profit margin due to growing client volumes and revolutionise the banking environment in keeping with the radical economic transformation agenda. And it would become competitive over time to branch out of the country into regional geographies.

The success of the bank would resonate with the pride of the people, following the controversial collapse of the VBS mutual bank.

Most businesses tend to oscillate between an extreme of gloom and the wildest optimism by co-opting politicians in their affairs to gain political clout than joining forces with bona fide entrepreneurs.

In short, politicians should stay in politics and allow entrepreneurs to roll up their sleeves to develop a client-focused, Afro-centric business model that provides lower cost of banking and better value to previously disadvantaged individuals.

Hopefully, the government would lend a hand for the bank to get going to stimulate a culture of entrepreneurship and address the challenges of inequality in society.