Who wants to be a black in­dus­tri­al­ist?

CityPress - - Business - DE­WALD VAN RENS­BURG de­wald.vrens­burg@city­press.co.za

The Black Business Coun­cil in the Built En­vi­ron­ment (BBCBE) has called for new gov­ern­ment support for so-called black in­dus­tri­al­ists to jet­ti­son the usual def­i­ni­tion of “black-owned” in favour of 100% own­er­ship by black peo­ple.

BBCBE gen­eral sec­re­tary Gre­gory Mo­fo­keng told City Press his or­gan­i­sa­tion was ad­vo­cat­ing for the com­plete ex­clu­sion of white peo­ple from new fund­ing and in­cen­tive pro­grammes be­ing de­signed by the depart­ment of trade and in­dus­try.

The depart­ment has re­cently promised two dif­fer­ent pro­grammes aimed at “black in­dus­tri­al­ists”.

One is a “black in­dus­tri­al­ist in­cen­tive scheme”, which Min­is­ter Rob Davies an­nounced in his bud­get speech in July, about which lit­tle is known ex­cept that it will be un­veiled this fi­nan­cial year.

The other is the “black in­dus­tri­al­ist pro­gramme”, which was an­nounced by Deputy Min­is­ter Mzwandile Masina in Au­gust.

The lat­ter is also a work in progress, but will ap­par­ently en­tail the se­lec­tion of 100 black-owned com­pa­nies that will be built up with state support over the course of three years.

Ac­cord­ing to Mo­fo­keng, black business’ first pref­er­ence is for qual­i­fy­ing com­pa­nies to be 100% black-owned, although he ad­mits that cur­rent leg­is­la­tion does not de­fine “black­owned” this strictly.

“At best, there should only be mi­nor­ity white own­er­ship.”

Ac­cord­ing to Mo­fo­keng, the black in­dus­tri­al­ist pro­gramme should in­volve grant fund­ing that will al­low the cho­sen com­pa­nies to bor­row fur­ther funds from the In­dus­trial De­vel­op­ment Cor­po­ra­tion and other fun­ders.

Black business’ first pref­er­ence is for qual­i­fy­ing com­pa­nies to be 100% black-owned, although cur­rent leg­is­la­tion does not de­fine ‘black-owned’ this strictly. At best, there should only be mi­nor­ity white own­er­ship

GRE­GORY MO­FO­KENG

But it should simultaneously in­volve a much more ag­gres­sive gov­ern­ment pro­cure­ment frame­work that fi­nally al­lows for set-asides.

Th­ese would be projects for which only black-owned firms can bid – a mech­a­nism that Na­tional Trea­sury has long barred be­cause it would prob­a­bly be un­con­sti­tu­tional.

Ac­cord­ing to Mo­fo­keng, the Trea­sury’s at­ti­tude is soft­en­ing.

Although the term “black in­dus­tri­al­ist” has rapidly come to dom­i­nate em­pow­er­ment de­bates, it has not been for­mally de­fined.

Mo­fo­keng says “black in­dus­tri­al­ist” means a company op­er­at­ing “at the high end, not as a small or mi­cro en­ter­prise”.

As they stand, broad-based black eco­nomic em­pow­er­ment laws have cre­ated a “plethora of mi­nor­ity share­hold­ers” who do not have in­flu­ence, ac­cord­ing to Mo­fo­keng.

He also crit­i­cised one of the most high­pro­file, and applauded, in­dus­trial pro­grammes in the coun­try – the Re­new­able En­ergy In­de­pen­dent Power Pro­ducer Pro­cure­ment Pro­gramme.

This pro­gramme is a com­pletely novel ten­der process through which com­pa­nies are in­vited to build re­new­able en­ergy projects in suc­ces­sive “win­dows”.

They ul­ti­mately bid against each other to of­fer the low­est power tar­iff to Eskom, which will have to pay for their power.

But the pro­gramme also gives black own­er­ship less weight than in nor­mal ten­ders to in­stead em­pha­sise black em­ploy­ment and lo­cal pro­cure­ment of in­puts.

“Ev­ery­one is laud­ing it as a great suc­cess, but from a black business per­spec­tive, it is a com­plete fail­ure,” says Mo­fo­keng.

The BBCBE is sug­gest­ing that a few black firms should be ex­empted from the win­dow sys­tem and not com­pete with the wide range of in­ter­na­tional bid­ders that have dom­i­nated the process.

RE­SIS­TANCE Gre­gory Mo­fo­keng

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