Rural areas offer many partners for empowerment schemes
DRIVING through rural KwaZulu-Natal and Eastern Cape one can easily notice the many positive improvements in the living standards of residents.
Better education, together with the higher incomes that go with it, have significantly changed life for the better.
The primitive structures that dotted the rolling hills in these parts over past decades have in the main been replaced by modern houses that would not be out of place anywhere in the world.
Whereas previously villagers had to share their river water with livestock, many homes now have water tanks to harvest rain water.
The ox-drawn sleds have been replaced by diesel vehicles.
It is easy to observe that people have mostly learnt to make their income work to improve their lives.
These are the people who were born from the 1970s through to the 1990s, and many are the first graduates of high school or university in their families.
Unlike when I grew up on the Wild Coast, there is now a demonstrable level of confidence and expenditure on fixed property.
It helps, of course, that we now live in a democracy and it is no longer possible for traditional leaders and officials of the apartheid government to raid villages at will to extract unjust taxes in return for no services.
The new middle-income status of these areas has attracted entrepreneurs and industries, many run by foreigners.
Building material suppliers are abundant in every village in the Eastern Cape. Of course, nothing beats selling alcohol.
The Pakistanis in particular seem to have found a way to offer the best prices for building materials.
They buy in bulk as a group, and fix their prices within a narrow band.
Immigrants from East Africa have cornered the market to supply household items such as blankets and cutlery, something local women used to do to supplement the income of their migrant-worker husbands on the mines.
A Somali man spent an hour trying to persuade my neighbour to buy a blanket for R1 200. It was similar to many I had bought for R300 in Johannesburg.
To sweeten the deal, “My Friend” (the name given to traders like him because this is how they address everybody) was prepared to accept payment in four monthly instalments, and offered to sell the client whatever else he required on credit.
In my travels across this area, I have learnt that fear of Somali muti takes care of any collection problems.
The typical client of “My Friend” is someone who lives on social welfare grants, the biggest source of income in these parts.
The rise of the middle class – mainly civil servants such as teachers and nurses with government salaries – has changed the face of the countryside over the past 20 years.
As they pay no exorbitant rentals, they have much more disposable income than city slickers do.
Nor do many of them pay for municipal services.
Now that these people are managing to get by on their incomes, the next step is to teach them to invest their disposable income, from which they could earn streams of dividends.
This is where schemes such as Vodacom’s YeboYethu or Sasol’s Khanyisa should be looking for their next black empowerment partners.
PPC and other cement producers are selling more products in these parts than ever before.
While state infrastructure spending has all but ground to a halt, rural residents have helped the cement producers maintain margins.
PPC should ensure its mooted BEE deal touches its customers in these remote corners of the republic. Those who earn dividends have the capacity to consume even more cement.