Sanlam deal will build social capital

After reading the Sanlam announcement on its latest broad-based BEE transaction and talking to the players involved, I found myself thinking a lot about social capital, especially in the context of black South Africans and their participation in the economy.

The term “social capital” has a variety of meanings in a variety of contexts, but the Organisation for Economic Co-operation and Development defines it simply as

“social relations that have productive habits” or “the links, shared values and understandings in society that enable individuals and groups to trust each other and so work together”.

In his book Bowling Alone: The collapse and revival of American community, Robert Putnam argues that though Americans are wealthier than ever, their sense of community has withered.

Putnam looked at the way they play 10-pin bowling, a sport with a big following in the US.

He found that though the sport was growing in popularity, most Americans were no longer playing it in groups or in local community competitions, like they used to.

Instead, they were, quite literally, bowling alone.

The Sanlam BBBEE deal has been in the works for some time now, and many have wondered what it will mean for African Rainbow Capital, founded by Patrice Motsepe and two former Sanlam executives, Johan van Zyl and Johan van der Merwe, since Ubuntu-Botho was already the insurer’s single-largest shareholder at about 14%.

So when talk of another empowerment transaction started making the rounds, it was natural to expect such a transaction to be between Sanlam and its chosen BBBEE partner of many years, Ubuntu-Botho and Motsepe.

In any event, business is not charity. It is not designed to be shared equally, in an effort to ensure that everyone in need of it gets a fair share.

Business, by its nature, is a competitive commercial pursuit, and this can work against the objectives of BBBEE, a policy that was established by the government to get more black South Africans into the economy after they were excluded from economic participation by a brutal economic system.

Apartheid was implemented through a set of laws ranging from the Immorality Act to the Group Areas Act, all aimed at ensuring that no social capital was built among black people.

Then came the 1990s, and the laws were abolished.

However, the practices remained. Systemic erosion of the dignity and social fibre of the majority of South Africans, and the artificial augmentation of a “superior” white minority, stayed with us.

Add to that the competitive nature and reality of capitalism, and you have yourself the inevitable outcome of a handful of very successful black business people, notwithstanding the stated intent of “broadbased” economic empowerment.

However, there is a way around this. It’s called social capital — the social relations that have productive habits.

What the likes of Motsepe have built, in addition to their economic capital, is social capital in the business community.

Thanks to their success and credibility, painstakingly built over the years, and not forgetting the enabling BBBEE policy environment, such leaders have been able to secure seats at tables that many can only dream of.

This is a good thing. It presents us with a unique opportunity to grow this newly attained social capital in business.

To reference Putnam, we don’t have to bowl alone.

Sanlam and Motsepe ought to be commended for ensuring that 80% of the BBBEE transaction, to issue 5% of the total issued share capital of SA’s biggest insurer, will accrue new black shareholders.

The list of new shareholders includes black women professionals, rural black women, broad-based black community organisations, black youth, black business partners Sanlam and Ubuntu-Botho, as well as employees of Sanlam.

Recognition that we, black and white South Africans, live in one of the world’s most unequal societies should inspire us all to use the social capital we possess, to provide access to others.

Social capital is very different to philanthropy, benevolence or generosity.

It is not about you giving and someone else taking.

It is a very commercial concept.

It is about playing a role in building the society we want to continue to thrive in.

I suspect this is what the astute Motsepe and Sanlam have realised.

Social capital is very different to philanthropy, benevolence or generosity