President Cyril Ramaphosa’s plan to establish a new broad-based black economic empowerment (BBBEE) advisory council has appeased organised black business, much to the annoyance of labour.
Ramaphosa said in his weekly newsletter on Monday that the council was established to champion the cause of economic transformation. The president said while there has been significant progress over the past two decades, there are some areas where there has been regression.
“We have gone backwards when it comes to increasing black management control, upscaling skills development, entrenching enterprise development and broadening procurement to give opportunities to black women and youth,” he said.
Black Business Council CEO Kganki Matabane said the body had engaged Ramaphosa and trade and industry minister Ebrahim Patel to appoint a council if the country took economic transformation seriously.
The term of the BBBEE advisory council appointed in October 2014 expired in 2019, leaving a two-year gap between then and yesterday's announcement.
“When the president was at our dinner, he announced the council would be appointed last Monday.
“We’re still waiting for the appointment not the announcement,” said Matabane.
“There’s still short-trading. It’s still two-and-a-half years without council, which means their work of advancing black empowerment is not done.”
Matabane said the presence of the advisory council should translate to more opportunities for black business, adding that the job of the council is to advise the president on transformation and monitor the implementation of BEE policies.
But organised labour has slammed Ramaphosa’s plan, with Cosatu national spokesperson Sizwe Pamla describing the move as “a complete waste of time”.
“This country does not need another advisory council. This is literally nothing but a distraction because nothing is moving in this country.
“An advisory council is meaningless in the face of an imploding country,” Pamla said.
He said similar councils that were appointed, like the state-owned enterprise council, which was set up two years ago, had failed. Pamla said instead taxpayers' funds would be wasted on organising council meetings that would not benefit citizens.
Pamla said BEE has failed to achieve economic transformation because corrupt government leaders used it to benefit their relatives and friends. He said instead the government should use the cabinet and the courts to push for implementation of policies.
Ramaphosa said between 2017 and 2020, nearly 500 empowerment transactions were submitted for registration to the BBBEE Commission.
He said black ownership had exceeded targets across key sectors such as construction, property, information and communications technology, tourism and transport.
Small Business Institute (SBI) CEO John Dludlu said there were many BBBEE fraudsters walking the streets instead of being in jail.
“If this is a step towards clamping down on the abuse of this national imperative, we applaud it.
“We await the announcement of names of the advisers for a thorough assessment of what it could really achieve.
“Lastly, we wish to caution about misplaced expectations that BBBEE could resolve all the country's ills including, but not necessarily limited to, small business challenges as it's often confused as black equals small, and small is a sector.
“Our constant refrain has been small is a segment of every sector in the economy.”
Business Unity South Africa (Busa) vice-president Martin Kingston welcomed the fact there would be a formal structure on a crucial aspect of economic policy in SA.
“Over the last 20 years, we’ve learnt a considerable amount of strength and inherent weakness of BEE, which mainly but not only relates to ownership, sustainable and meaningful transformation.
“Our country has taught us structures need to be sustainable, viable and costs associated with transfers should be minimised and benefits flow through,’ he said.
Saftu general secretary Zwelinzima Vavi, however, said Ramaphosa’s administration had rendered the cabinet useless. He said advisory councils were used as a smokescreen to divert attention from problems in the country.
“The president will go down as the most spineless president in the history of South Africa. He has rendered the cabinet useless by adding layers of bureaucracy instead of dealing with the issues,” Vavi said.
He said BEE was never going to help SA achieve economic transformation. “It made very few people rich while the rest of South Africa languish in poverty.”
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