Allow economic transformation far more scope
THE BLACK Business Council (BBC) has noted Helen Zille’s comments regarding the draft Preferential Procurement Policy Framework Act (PPPFA) regulations, and the sentiments expressed are of great concern.
First of all as the BBC we are not politicians, but a group of business people who are engaged in a legitimate attempt to accelerate economic transformation that would foster inclusive economic growth and in the process foster the growth of the middle class. One of the major stumbling blocks that black businesses in general and black small, medium and micro enterprises (SMMEs) in particular have been grappling with is the stranglehold the PPPFA has on fostering preferential procurement.
As the BBC we have relentlessly pushed for the repeal of the PPPFA, both in public and in private, where we have engaged the Minister of Finance and Treasury since 2012. The matter is very mission critical for the BBC in general and for those enterprises that have hitherto been systematically excluded from the mainstream economy by the architects of apartheid and racial exclusion.
The BBC, at its national council, took a resolution to launch a Constitutional Court challenge to certain prohibitive aspects of the PPPFA that prohibit set-asides, pronounced within a Practice Note, number SCM 2 of 2006. That resolution still stands and was only suspended because Treasury engaged the BBC leadership and committed to review of the PPPFA.
In the new dispensation, the democratic government has introduced a number of legal instruments aimed at driving economic transformation, primarily of which broadbased black economic empowerment (BBBEE) underpins this goal. When the PPPFA was introduced, as black business we opposed it vehemently, because we knew then that those who hastily introduced this regulation understood its negative impact on the implementation of BBBEE.
The PPPFA in its current form continues to have a negative effect on preferential procurement, the very essence of its expression, and it has negated significant scope to prompt economic transformation. Instead it continues to provide significant commercial benefits to majority white owned businesses who have a huge balance sheet to under-cut and undermine procurement prospects for emerging businesses, and not just President Zuma’s cronies as Zille suggests, which we find distasteful.
Sometimes political rhetoric should not elude nationalism and valuable conversation. We have respect for Zille as a person and politician, but we would take exception if Zille uses her political agenda to undermine the intelligence of black people in general and black business leadership in particular, that it alone cannot think for itself what is good for its constituency regarding economic emancipation, and that we pander to political manipulation.
As the BBC we are still studying the policy document, and at face value there are glaring issues.
Just to enlighten those whose thinking is congruent to that of Zille, the major beneficiaries of BEE have been white monopoly capital, instead of intended beneficiaries, whose profits have greatly soared since the advent of democracy, precisely because of incongruencies and contradictions in the PPPFA, in particular as well as some of the BEE instruments, instead of those the legislation is intended. The transformational gains brought about by the Revised Codes of Good Practice are immediately lost when you begin to apply the pricing element of the PPPFA scorecard.
The BEE regulatory environment is not about blacks taking from the whites, but placing significant equity of the economy at the hands of the majority of the citizens, a process of distributing new opportunities to those emerging businesses that hitherto have been deliberately excluded from the mainstream economy by the majority of white citizens that for decades maintained and sustained racial discrimination through an undemocratic vote.
The fervent support accorded the apartheid regime must equally apply in order to harmonise the hugely distorted ownership and wealth patterns of this country. The BBC has a long-term view of fostering the creation and support for emerging businesses through deliberate programmes such as the black industrialist programme.
Even those companies who have benefited from BEE since 1994 must continue to benefit for procurement spend in both the public and the private sectors, so that they could reach the levels of their industry counterparts, and have the competitive critical mass.
On July 23, 2015, we witnessed the celebration of three black audit and consulting firms, Sizwe Ntsaluba Gobodo (SNG), SekelaXabiso (SKX) as well as Ngubane. Yes, we noted with pride that SNG, in particular, employs 1 200 employees in South Africa, and that it also now operates in 24 other African countries, whilst SKX on the other hand employs 300 people. The fact of the matter is that the combined number of employees of these two firms make up one division of the big 4 audit companies. Through the black industrialist programme we must be able to push these companies to or beyond the scale of international conglomerates who are already dominant in the first world.
In the process of driving the black industrialist programme, which aims to put through more than 1 000 companies in the hope of achieving 100 big black industrialists, the BBC will push for the reform of any law or regulation that hinders this process, for the growth of the black middle class in general and economic growth in particular depends on this intervention, amongst others.
As the BBC collective representing the aspirations of the majority of the economically marginalised, we shall not relent our duty to push for a total transformation, with much more vigour than the political struggle, because the jewels still reside with someone else, and that’s not economically sustainable, for our future depends on it, and we shall overcome.
We shall look back in 2030 with pride, for ours will be a vibrant and inclusive economy that would have general enormous wealth, prosperity and peace for all the citizens of the motherland. Xolani Qubeka is Secretary General of the Black Business Council