SA re­mains lost in eco­nomic rev­o­lu­ton

Busa out­lines strategy to jump-start process

The Star Early Edition - - BUSINESS NEWS - Siseko Njobeni

THE PACE and depth of in­clu­sive eco­nomic trans­for­ma­tion in South Africa has gen­er­ally been in­suf­fi­cient, ac­cord­ing to Busi­ness Unity South Africa (Busa).

The body, which rep­re­sents or­gan­ised busi­ness in the coun­try, yes­ter­day re­leased its po­si­tion paper on trans­for­ma­tion in which it has given sug­ges­tions on how to quicken the pace of trans­for­ma­tion.

In the doc­u­ment, Busa an­a­lysed each of the el­e­ments of the broad-based black eco­nomic em­pow­er­ment (B-BBEE) codes – own­er­ship, man­age­ment con­trol, en­ter­prise and sup­plier de­vel­op­ment, skills de­vel­op­ment and so­cio-eco­nomic de­vel­op­ment.

Lim­ited

“The time for talk­ing is over. It is our wish to co-op­er­ate com­pre­hen­sively with gov­ern­ment, labour and other so­cial part­ners to achieve the ac­cel­er­ated de-racial­i­sa­tion of the econ­omy,” said Busa president Jabu Mabuza.

Busa said, de­spite ex­ten­sive in­vest­ment and costs, fund­ing of B-BBEE own­er­ship trans­ac­tions, with lim­ited eq­uity from B-BBEE par­ties trans­lates into lim­ited in­flu­ence and value gen­er­a­tion.

The or­gan­i­sa­tion said own­er­ship had failed to de­liver meaningful con­trol and value to black peo­ple “given that share­hold­ers are gen­er­ally in­suf­fi­cient to ex­ert di­rect in­flu­ence on the strate­gic di­rec­tion of in­vestee com­pa­nies”.

It said lim­ited avail­able cap­i­tal hin­dered the im­ple­men­ta­tion of BBBEE own­er­ship trans­ac­tions.

It said there was over-reliance on highly geared fund­ing struc­tures. The body also ques­tioned the ef­fi­cacy of the 25 per­cent or 26 per­cent own­er­ship in­ter­est.

In its paper, Busa has pro­posed fo­cus on the growth of black busi­nesses through im­proved ac­cess to mar­kets, cap­i­tal and skills. “Busi­ness should work to­gether with gov­ern­ment to enhance the suc­cess and scale of pro­grammes such as the black in­dus­tri­al­ist pro­gramme,” it said.

Sig­nif­i­cant changes are needed to ad­dress the his­tor­i­cal legacy and grow the econ­omy in an in­clu­sive man­ner

Busa vice-president Martin Kingston said yes­ter­day that the busi­ness or­gan­i­sa­tion was in favour of lever­ag­ing the ex­ist­ing black in­dus­tri­al­ist pro­gramme in what he said was a nec­es­sary fun­da­men­tal shift in gears to fa­cil­i­tate the en­try of black peo­ple into the econ­omy.

“There should be a shift in em­pha­sis to cre­ate, grow and sup­port black in­dus­tri­al­ists,” said Kingston.

The black in­dus­tri­al­ists pol­icy, which is part of the gov­ern­ment’s broad in­dus­tri­al­i­sa­tion ini­tia­tives to ex­pand the in­dus­trial base, com­ple­ments B-BBEE by fo­cus­ing di­rectly at black man­u­fac­tur­ers.

Busa said busi­ness should work with the gov­ern­ment to enhance the suc­cess and scale of the black in­dus­tri­al­ist pro­gramme.

Among Busa’s pro­pos­als is em­pha­sis on as­set-sale trans­ac­tions, in­stead of sale of shares. Such a move would re­sult in the sale of part of a busi­ness or the es­tab­lish­ment of a new black-con­trolled busi­ness.

Struc­tural shifts

Busa chief ex­ec­u­tive Tanya Co­hen said that apartheid sys­tem­at­i­cally en­gi­neered sig­nif­i­cant as­pects of the econ­omy and so­ci­ety in favour of the white pop­u­la­tion.

“Ad­dress­ing the sys­temic im­pact, there­fore, calls for sig­nif­i­cant, fun­da­men­tal struc­tural shifts to ad­dress the his­tor­i­cal legacy and grow the econ­omy in an in­clu­sive man­ner. Busi­ness is com­mit­ted to ac­cel­er­at­ing this process and work­ing to­gether with gov­ern­ment, and key so­cial part­ners in­clud­ing or­gan­ised labour,” said Co­hen.

On man­age­ment con­trol, Busa said that while there had been an in­crease in the rep­re­sen­ta­tion of pre­vi­ously dis­ad­van­taged in­di­vid­u­als in mid­dle man­age­ment, pro­fes­sional and tech­ni­cal skilled lev­els, there had been slower and lit­tle progress at top and se­nior man­age­ment lev­els. “Busi­ness needs to re­search, demon­strate and ad­vo­cate the busi­ness case for di­verse lead­er­ship and man­age­ment con­trol as part of busi­ness com­pet­i­tive­ness,” said Busa.

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