Cape Times

Sharp decline in black ownership rankles the dti

- LUYOLO MKENTANE luyolo.mkentane@inl.co.za

THE DEPARTMENT of Trade and Industry (DTI) has criticised the sharp decline in black ownership in the country’s major economic sectors, charging that slow transforma­tion had instead increased. The DTI said during a round-table discussion on Friday that average black ownership in large sectors eased while fronting in constructi­on and informatio­n communicat­ion technology (ICT) sectors rose.

The chairperso­n of the DTI’s BroadBased Black Economic Empowermen­t (B-BBEE) Commission, Busisiwe Ngwenya, said black ownership in the constructi­on sector code fell to 4.04 percent, while the financial and ICT industries declined to 42.82 and 29.60 percent respective­ly. Integrated transport fell to 33.86 percent, while marketing, advertisin­g and communicat­ion declined 32.51 percent and tourism 41.35 percent.

She said agricultur­e recorded the highest decline, to 4 percent. “This decline might be attributab­le to fewer entities submitting their annual compliance reports in 2017, whereas the 2016 state of transforma­tion relied on researcher­s’ data sources to establish sectoral black ownership,” Ngwenya said. “More than 40 percent of the sectors under analysis saw increases in average management control points between 2016 and 2017, with the exception of the agri-BEE sector, which slightly declined from 44 to 22.60 percent.”

The commission said black ownership in commercial farming was closely linked to the challenge of black agricultur­al land ownership. It said one of the bottleneck­s was that historical­ly land was not held in a commercial business, but in a trust, which would generally not be rated and thus not reported to the B-BEE Commission.

“It is recommende­d that the B-BEE Commission engages with the Department of Agricultur­e, Forestry and Fisheries and the Agri-BEE Sector Council to better understand the impact of these different land ownership models, and the implicatio­ns of these structures on transforma­tion imperative­s.”

Business executive and BEE Advisory Council member Chantyl Mulder slammed those who viewed B-BBEE as a tick-box exercise, saying: “I think trusts should not be allowed in any form. We’ve lost the true meaning of ownership. All these trusts and deals, that’s not how you are going to create true empowermen­t,” said Mulder.

The B-BBEE Commission said very few industries exceeded the 30 percent black women ownership threshold currently set in the amended B-BBEE Codes of Good Practice.

“The B-BBEE Commission should work with the DTI to enhance support to women-owned businesses through existing and new programmes and initiative­s, and closely monitor progress on the 30 percent black women-owned category.”

Black Business Council chief executive Kganki Matabane said government policies needed to be aligned to allow for township economies to thrive. Over-reliance on consultant­s needed to end and the government needed to verify proper ownership of companies in order to curb fronting.

“Consultant­s don’t have the interest of seeing black ownership (thrive). It’s time that we all started to support black businesses and ownership,” said Matabane.

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