KGANKI MATABANE: These are the tough decisions SA must make

SA should take the necessary but uncomfortable decisions that will have a long-term positive effect and deliver effectively on the economic reconstruction and recovery plan.

The constitution's preamble says, among other things: “We, the people of SA, recognise the injustices of our past … (and) believe that SA belongs to all who live in it, united in our diversity.”

Therefore, we should all commit ourselves to the pursuit of the objectives contained in the constitution for a democratic SA. We can only do so if we deal with the country’s challenges honestly, frankly and without fear or favour. This will take us forward towards the realisation of the objective of reconciliation and nation building, without which the kind of SA visualised in our constitution will not come into being.

We need to ask ourselves this important question: “Are we making the requisite progress towards achieving the objective of nation building?” We should answer this question honestly and deal with the consequences of an honest response, however discomfiting it may be.

Pre-1994 almost all South Africans had one objective — to defeat and end apartheid. What is our one objective post-1994? I would like to address this question by revisiting the statement of then deputy president Thabo Mbeki at the opening of the debate in the National Assembly on reconciliation and nation building, on May 29 1998.

“We therefore make bold to say that SA is a country of two nations. One of these nations is white, relatively prosperous, regardless of gender or geographic dispersal. It has ready access to a developed economic, physical, educational, communication and other infrastructure.

“This enables it to argue that, except for the persistence of gender discrimination against women, all members of this nation have the possibility to exercise their right to equal opportunity, the development opportunities to which the constitution of 1993 committed our country.

“The second and larger nation of SA is black and poor, with the worst affected being women in the rural areas, the black rural population in general and the disabled. This nation lives under conditions of a grossly underdeveloped economic, physical, educational, communication and other infrastructure.

“It has virtually no possibility to exercise what in reality amounts to a theoretical right to equal opportunity, with that right being equal within this black nation only to the extent that it is equally incapable of realisation.”

In 2021, 23 years later and 27 years into democracy, Mbeki’s remarks are to a large extent still applicable to SA. To illustrate my point I will cite a few examples:

Commission for Employment Equity Report

The 21st Commission for Employment Equity Annual Report (2020-2021) factually reflected that white people constitute 9% of the economically active population but occupy 64.7% of top management positions. Indian people make up 2.8% of this population but occupy 10.6% of top-level positions.

Blacks (Africans), who make up 79.3% of the economically active population, occupy just 15.8% of top management positions, while the coloured population makes up 8.9% and occupies 5.7% of top management positions. And the figures look particularly bad for black (African) women.

Economic ownership report

 An indication of the skewed nature of ownership comes from analysis carried out by the National Empowerment Fund, a body set up by the government to support black business that looks at companies listed on the JSE. By this measure just 3% of the biggest firms listed on the JSE are directly controlled by black South Africans.

Covid-19 relief funds

Former small business development minister Khumbudzo Ntshavheni told parliament in September 2020 that  “Government has provided R200bn government-guaranteed loans. Of that R200bn banks have advanced R15bn to SMMEs — 75% of the beneficiaries are white”.

Youth unemployment

Some 74% of young people are unemployed, the vast majority of them being black (African) youth.

Structure of the economy (monopolies and duopolies)

All sectors of our economy are owned 80%-90% by a handful of large corporations.

Dealing decisively with the above-mentioned pertinent issues will not only secure our hard-fought democracy but assist in strengthening our partnerships to deliver on the economic reconstruction and recovery plan.

These are the main issues we should consider:

• Implement the spirit of government's socioeconomic transformation strategy across the board.
• Stop demonising BEE and saying it introduces policy uncertainty, as it implements section 217 of our constitution.
• Stop trying to circumvent transformation by ticking boxes to secure BEE points.
• Stop using trusts and other vehicles to avoid transferring ownership of shares to previously disadvantaged groups (sophisticated fronting).
• All South Africans (especially those who benefited from apartheid) should have a moral obligation to better society without demanding incentives (like corporates who demand BEE points to hire black youth).
• Speed up the process of the Public Procurement Bill (and repeal the useless Preferential Procurement Policy Framework Act) to use state procurement to transform the economy.
• The president has indicated during Women’s Day celebrations two years in succession that the state will set aside 40% of its procurement for women. This will remain a pipe dream until it is incorporated into procurement laws.
• Pay small, medium and micro enterprises (SMMEs) within 30 days or less. Late payments place immense pressure on small businesses, which rely on steady cash flows to maintain operations. Late and slow payments create good conditions for corruption.
• Create sustainable black and small businesses by providing them with access to funding and markets.
• Encourage collaboration between business, labour, civil society and government (social partners), as seen during the Covid-19 pandemic. This period has been characterised by quick decision-making, world-class collaboration, sufficient consultation (not perpetual), seamless integration, speed in addressing bottlenecks, agility, efficiency, effectiveness, visibility of leadership and unity of purpose.
• Replace the importation preference strategy with smart localisation. SA is the largest consumer of antiretrovirals (ARVs) in the world through our commendably comprehensive ARV therapy programme, which treats more than 5-million people. We could have used our procurement muscle to establish a thriving local manufacturing industry, which would be in the best interest of the security of supply of medicines critically needed by millions of South Africans.
• Work with the competition authorities to open the economy to new entrants and reduce the entrenched duopoly nature of our economy to allow black-owned companies and SMMEs space to operate.

If we choose the easy route of continuously disregarding the plight of the African majority and don’t honestly and decisively deal with these issues, Mbeki's 1998 analogy of two nations will continue unabated and the repeat of the riots and looting of July will soon revisit us. Our delicate democracy project can’t be sustained if we do not address the real issues and simply continue to make empty promises. We dare not fail.

• Matabane is CEO of the Black Business Council.