Cham­pi­oning job cre­ation

Ten years into her ten­ure as NEF head, Philisiwe Mthethwa wants more sup­port from black CEOs

CityPress - - Busi­ness - XOLANI MBAN­JWA xolani.mban­jwa@city­press.co.za

Na­tional Em­pow­er­ment Fund (NEF) chief ex­ec­u­tive Philisiwe Mthethwa re­grets telling gov­ern­ment not to give its R2.4 bil­lion in re­cap­i­tal­i­sa­tion back in 2009, as it con­tin­ues to strug­gle to meet its man­date to fund BEE trans­ac­tions. Back in 2009, the NEF, a gov­ern­ment ve­hi­cle with an ex­clu­sive man­date to fund BEE deals, found it­self in a good fi­nan­cial po­si­tion af­ter rais­ing more than R2 bil­lion fol­low­ing the sale of half of its 3% stake in MTN to the Asonge Share Scheme.

The NEF, which had been promised R10 bil­lion over five years from 2004 to 2009 as fund­ing from the de­part­ment of trade and in­dus­try, told the de­part­ment to keep its 2009 al­lo­ca­tion of R2.4 bil­lion, as busi­ness was good.

Although Mthethwa says they are close to a deal with state au­thor­i­ties to al­lo­cate the re­main­der of the tranche, “or what­ever gov­ern­ment can”, she wishes the NEF board had never passed on the al­lo­ca­tion.

The fund cel­e­brated 10 years since re­ceiv­ing its first tranche in 2004 and has helped to cre­ate many BEE suc­cess sto­ries along the way. Mthethwa, who has spent a decade as CEO, says no other en­tity can boast of black in­dus­tri­al­ists in the BEE space as much as the NEF can, but it needs more money now.

“Look­ing back, if there was any­thing I could have done dif­fer­ently, it would have been around that re­cap­i­tal­i­sa­tion of the NEF.

“That was maybe a wrong move or de­ci­sion on our side, but we didn’t want to con­tin­u­ously sit on this pile of cash when there were other en­ti­ties in gov­ern­ment that re­quired the funds,” said Mthethwa, whose en­tity now boasts of black-owned com­pa­nies in tourism, con­struc­tion, en­ergy, en­gi­neer­ing, ce­ment and pes­ti­cide man­u­fac­tur­ing.

Since 2009, the NEF has been self-fund­ing and has ap­proved more than 688 trans­ac­tions worth up­wards of R6.6 bil­lion.

Mthethwa does not want to dwell on the chal­lenges too much, pre­fer­ring to pose hard ques­tions of black pro­fes­sion­als who were not en­ter­ing the busi­ness space.

She is proud of com­pa­nies such as the Motheo Con­struc­tion Group, a fe­male-led com­pany that be­gan with a Con­struc­tion In­dus­try Devel­op­ment Board grad­ing of only level 3 but, with the NEF show­ing the way, has in­creased its rat­ing to the high­est in the in­dus­try, hav­ing built more than 75 000 homes.

She says the only rea­son BEE has not reached its full po­ten­tial is be­cause black peo­ple have not put their en­er­gies into the project.

“I be­lieve the rea­son it hasn’t worked is we have not re­ally put our en­er­gies and in­tel­lec­tual ca­pa­bil­i­ties as black pro­fes­sion­als into en­sur­ing this BEE project works in the long term.

“For as long as we have this anom­aly in this coun­try where you have 90% of the peo­ple of South Africa own­ing 5% of the econ­omy and 10% own­ing 90% of the re­sources, I don’t think this is a sus­tain­able way of sup­port­ing our democ­racy. “It’s a recipe for dis­as­ter,” said Mthethwa.

Hav­ing spent the long­est time in the BEE space, and be­ing the first to re­fer to the term “black in­dus­tri­al­ists” more than five years ago, Mthethwa says few peo­ple know the pit­falls of BEE bet­ter than those at the NEF.

“All I’m say­ing to South Africans is, here is an en­tity that has a track record; if we were to just give it ... it’s very easy for South Africans to in­vest R1 bil­lion in one white-owned busi­ness. If you give the NEF R1 bil­lion, we slice it up and it em­pow­ers hun­dreds of en­ter­prises, small and big,” said Mthethwa.

She is at pains when talk­ing about black pro­fes­sion­als in huge in­dus­tries who do not up­lift black com­pa­nies by giv­ing them work.

“South Africans don’t re­alise we are lit­er­ally sit­ting on gold, but we just can’t take this gold. It’s frus­trat­ing.

“The change we make by giv­ing a clean­ing con­tract to a black fe­male-owned en­tity [is far-reach­ing] – as CEOs we can take those de­ci­sions, but do we take them? How many black CEOs would worry about that? You can’t only be think­ing about big things. Bid­vest is a multi­bil­lion-rand busi­ness and they are into clean­ing, leisure and tourism. Those are the lowhang­ing fruits for me,” said Mthethwa.

The NEF, she said, has now taken up gov­ern­ment’s chal­lenge of cre­at­ing black in­dus­tri­al­ists with a Spe­cial Pro­jects Fund, a port­fo­lio of projects worth R27 bil­lion ex­pected to cre­ate about 80 000 jobs.

“We fund black in­dus­tri­al­i­sa­tion and we want black peo­ple to be in­volved in the ser­vices-re­lated in­dus­tries as well, which are a big mon­ey­maker and job cre­ator.

“Black peo­ple should be well po­si­tioned in all of the crit­i­cal sec­tors of the South African econ­omy, even if they fall out­side of the man­u­fac­tur­ing sec­tor.

“Tourism is a low-hang­ing fruit for me. You can be in the tourism sec­tor and still make it,” said Mthethwa.

PHOTO: REUTERS

CAV­ERN CLUB A man walks past a mu­ral de­pict­ing the faces of The

Bea­tles at the en­trance to one of the per­for­mance rooms in­side the Cav­ern Club in

Liver­pool, north­ern Eng­land.

Fifty years on since the group per­formed for the last time in their home town, their pres­ence is still felt, with global fans of the Fab Four adding about $105 mil­lion (R1.5 bil­lion) to the lo­cal

econ­omy each year, ac­cord­ing to

in­dus­try or­gan­i­sa­tion UK

Mu­sic

PHOTO: ELIZ­A­BETH SE­JAKE

TALK­ING TOUGH CEO

of the Na­tional Em­pow­er­ment

Fund Philisiwe Mthethwa

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