Recent articles in Business Day and other publications, as well as Eusebius McKaiser’s regular rants on Radio 702, as typified by his attacks on the CEO of MyWay on Tuesday, continue to focus on black economic empowerment as being about getting more alternative faces in boardrooms and changing the complexion of shareholders.
Yet these approaches do not address the true problem in SA; the need to grow the economy. It is not about changing businesses, but about creating new businesses. The argument that this requires capital that is not available is no longer true. We have significant numbers of "previously disadvantaged individuals" who have through various schemes accumulated huge amounts of money. The validity of these schemes is not the question, rather what is being done with that money to develop and grow new large businesses?
Clearly some are being created — McDonald’s was started up in SA, for example, and there are others. However, if the huge sums allegedly being taken to Dubai were to be applied to business creation here, the economy would be booming. Why is it attractive to take the money out of SA rather than investing it in growth here?
If, as stated in Business Day, South African businesses are sitting on huge cash piles, we as shareholders must encourage management to fund, through loans, new businesses developed and managed by the new breed of emerging South Africans. As shareholders, we cannot tolerate idle cash in our investments.