SA is limp wristed from unclear definitions and objectives that are used at different moments to drive ambiguous agendas. SA lacks a clear definition of transformation, and thus every organ of change abdicates its role in shaping the country in a progressive direction.
The proposed definition incorporates three facets of transformation. Transformation as a science seeks to measure the progress of black people in terms of their socio-economic prosperity in a democratic dispensation. Transformation as a craft seeks to create policies and frameworks that will drive the inclusion of black people into the mainstream economy.
Transformation as an art seeks to deal with the mindset of society around creating a society that is fundamentally different from what was there before transformation efforts, building it from the ground up and focusing on values and principles.
Therefore, black business has a particular role to play in fusing the scientific, the craft and artistic perspectives of transformation in the SA economy. This definition should be adopted by black business and should become the theme of every conference, discussion, engagement and policy submission in SA.
Black business has a particular role to play in fusing the scientific, the craft and artistic perspectives of transformation in the SA economy.
The storm of pandemics
Black business over the years in SA has faced insurmountable odds and challenges. Apartheid was a moral pandemic, driven by separate development and underdevelopment of black people in general.
This, however, did not stop black business from emerging. Subjugation and oppression developed resilience in black people, propelling them to build businesses in townships and driving an intellectual revolt against corporate SA.
The Kunene brothers, Dr Nthato Motlana, Dr Richard Maponya, Dr Donald Mkhwanazi, Dr Lot Ndlovu and Dr Reuel Khoza are but a few names that powered the notion that black people can self-actualise and build black-led business in SA. This movement of black business during apartheid grew in leaps and bounds in the black community and the economic aspirations of black people resonated with hope that became palpable and inspired many to join the onslaught against apartheid.
Covid-19 has been another challenge for black business to overcome and fight to remain relevant in producing goods and services for customers and maintaining the balance of expectations among stakeholders. Covid-19 has exposed the slow pace of transformation in SA, and the stark realities of black business.
The four challenges that SA faces in the form of poverty, inequality, unemployment and leadership remain largely a black challenge. According to the recently released Quarterly Labour Force Survey Report, Q2 2020 by Stats SA, the black African population group has a higher unemployment rate than the national average, sitting at 26.3% and the national average at 23.3%.
The unemployment rate among whites is sitting at 6.1% according to the same report. In a country that has 39-million people of working age, 14.1-million are employed in SA, per the same report. Covid-19 has just amplified the existing realities in the main and raised the alarm over the low number of employed South Africans who are carrying the whole country in terms of income tax and spending.
In the same period, black business has faced the continued challenges of cash flow, late payments and in some cases no payment at all. Black business also does not compete on equal footing with established white business as they cannot implore economies of scale and negotiate pricing without making a substantive loss.
These acute challenges cripple the possibility of growing business and increasing the employment base. This has largely contributed to the prevailing business mindset of employing few employees and maximising on profit, to create cash flow for the owners or owner. Black business in SA therefore has a fundamentally different attitude towards building businesses. This mindset is driven by broader societal challenges and large numbers of black people start businesses to survive and not to grow the economy.
Black business also does not compete on equal footing with established white business as they cannot implore economies of scale and negotiate pricing without making a substantive loss.
Building black capital
In building black business in SA, the focus first needs to be on strengthening policy and considering lobbying for a BB-BEE ombudsman's office that will focus on creating value for black business on the JSE and in the unlisted space. The Intellidex report of 2015 on the value of BEE deals on the JSE reflects value of R317bn was created through BEE transactions. The second focus must be on the banking and financial services sectors as these sectors are the bedrock of the economy.
This focus should drive the commercial banks to fund a black-owned bank. Black business has to regroup and strengthen the Black Business Council, in being the voice of black business in SA. Then there is a need to lobby for the introduction of empowerment quotas with punitive measures for non-compliance. These quotas should focus on business finance and procurement spending by the private sector.
The fifth focus must be on reviewing the mandates of all development finance Institutions and aligning them to focus on black business development. There is also a need to lobby for a black business Act that will focus on developing black business in key sectors of the economy and to ensure that the new procurement bill provides for at least 60% of government spending to benefit black business. Lastly, the focus should be on investing in research and development that will focus on black business, driven by all the black lobby groups.
Ndlovu is head of advocacy and thought-leadership at the Black Management Forum
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