Inclusive Economic Empowerment does not just benefit the elite

While the previous apartheid regime clearly disadvantaged the majority of people in SA, it is quite unclear whether the present government’s attempts to redress this situation have borne much fruit.

With this being the case, what alternative is there to redressing this unsatisfactory situation.

Given that BEE has been ANC government policy since 1994, and legislated in the BBBEE Act of 2003, we might well ask why the majority of the previously disadvantaged population — for whom the policy was devised to benefit — are still living in abject poverty and without any apparent benefits of this government policy and legislation.

Is the rhetoric of BEE or BBBEE just a smokescreen to facilitate the enrichment of a well-connected ANC elite?

A reasonable measuring yardstick of the success of any BEE policies would be whether there has been any surge in the growth of business owned by the previously disadvantaged, measured by the reasonable yardstick of capital growth in the economy, or, as in the conspicuous case of Cyril Ramaphosa, has the economic empowerment simply been by the transfer of ownership, often by shareholdings, to an individual who is not thereby required to contribute anything to the growth of the nation’s GDP.

It is common cause that, though he is reputed to be a billionaire, Ramaphosa has not started any business or contributed to any business growth — in short, he has not created or manufactured a single item of value.

Given this pitiful report card on the success of BEE and its child BBEEE — that they have simply enriched a small elite within the corridors of the governing party — what alternative is there for facilitating the economic growth of the majority of the previously disadvantaged citizens of this country?

Herman Mashaba, president of Actionsa, has recently unpacked an alternative means of empowering the previously disadvantaged — a policy which he calls Inclusive Economic Empowerment (IEE).

In a merit-based society, there needs to be an incentive to perform, and to perform with excellence, rather than to see one’s efforts stunted by the restriction that there is a limit to what one can achieve.

This is the principal limitation of totalitarian regimes which seek equal outcomes for each citizen. In such a system, there is no incentive for outstanding people to excel, resulting in diminished output and the general diminished underachievement of all.

The basic premise of IEE is that all individuals be capacitated to achieve their maximum potential.

This can be achieved by an education system which seeks to maximise the human capital of the country, providing educational opportunities for each pupil, whether at schools or at tertiary institutions, to reach their full potential.

It means the majority of South Africans trapped in a generational poverty trap must receive the support needed to achieve upward social mobility for them and their families.

This approach is premised on the basic principle that solving a problem requires an understanding of the root cause of that problem, rather than by just addressing the symptoms.

It is trite to say that inclusive economic empowerment requires a whole-of-government approach to ensure that a child born into a neglected community has access to quality health care, quality education, reliable basic services, safety and security.

This means that uplifting communities is not about manipulating empowerment scorecards but ensuring communities are empowered with the resources and infrastructure needed for them to prosper.

Without these fundamental issues being addressed, no amount of policy interventions could ever move the needle of economic empowerment in a meaningful way.

As so often happens today, awarding tenders to politically connected companies with hopes that their fortunes will trickle down doesn’t empower young people with the skills they need to thrive.

Similarly, forcing private companies to employ people in senior positions based on their race does not increase the number of doctors in our hospitals, or teachers in our schools.

Accordingly, addressing inequality must take a grass-roots approach that addresses the cause and not just the symptom.

Actionsa proposes to introduce the Opportunity Fund, reform employment equity measures, adopt a universal basic income stimulus, address persistent spatial justice issues and promote social cohesion.

It claims that through these interventions, it will ensure that our government spends its time and resources on truly addressing the barriers that prevent millions of South Africans from pursuing a better life and future for them and their families.

One of the first initiatives it will undertake in government is to introduce legislation to establish an Opportunity Fund to empower forgotten communities.

The aim of this is to dismantle the barriers that have hindered the economic empowerment of Black, Coloured, Indian and Asian South Africans.

The Opportunity Fund is seen as a commitment to ensuring that the neglect felt by millions under the present government’s policies is turned into active inclusion and prosperity. Basically, it is about creating fair chances for all, not just for some.

This Opportunity Fund is to be founded on the principle of expanding access to economic opportunities.

It will invest in essential infrastructure such as schools, healthcare facilities, and transportation — areas that directly affect the daily lives and future prospects of citizens.

It will also support initiatives in skills development, entrepreneurship, and housing, ensuring that empowerment is comprehensive and multifaceted.

The good news is that no politician, not even the president or minister of finance, will be able to interfere in the business of the fund.

This ambitious plan will be funded by the introduction of a tax on private sector profits, while exempting SMMES from this tax.

This tax will replace the cost of compliance with current empowerment regulations, allowing businesses to offset the cost of malicious compliance against genuine empowerment.

In short, the Opportunity Fund is a bold step towards rectifying the imbalances of our country’s past.

It is an investment in the future, ensuring that economic empowerment in SA is broadbased and inclusive.