The companies that account for the lion’s share of the JSE’s market capitalisation, invest and earn most of their profits outside SA. This raises questions about whether government’s black empowerment policy is relevant in its current form.

New research by a University of Johannesburg think-tank reveals that SABMiller (as it was before being swallowed by Anheuser-Busch InBev), British American Tobacco (BAT), Anglo American, Glencore, BHP Billiton, Richemont, Naspers and Steinhoff, which are also listed elsewhere, earned more than 80% of their income outside SA. In addition, BAT has only listed 15% of its shares on the JSE.

The report, by UJ’s Centre for Competition, Regulation & Economic Development (CCRED), analysed SA’s top 50 listed companies between 2005 and 2016. They represent 86% of the bourse’s market capitalisation.

The top 10 companies on the JSE represent 58% of the exchange’s market cap, but only two companies with significant domestic operations — bankers FirstRand and Standard Bank — are in the top 10.

"This is a catchy way of expressing something far more intricate, which is that there is a significant proportion of firms in the research’s top 50 of the JSE that in many ways have very little of their operations actually based in the country," says Thando Vilakazi, senior economist at the CCRED.

This presents a headache for the department of trade & industry (DTI), at whose behest the research was conducted. The DTI is the guardian of government’s empowerment policy, which seeks to bring previously marginalised groups into the mainstream SA economy. It is grappling with quantifying how much of the economy is in black hands. Vilakazi encapsulates the problem well — if the country were going to have a discussion about empowerment and industrial development in SA and Africa as a whole, the inclusion of companies which only earn around 8% of their revenue from SA, such as Naspers would not help.While all but three of them have concluded empowerment deals, the CCRED data suggests their empowerment partners received only a very thin slice of a mini pie."When it comes to ownership we must talk about broad-based black ownership and not concentrated black ownership, as the trickle-down effect of concentrated black ownership has not worked. Levelling the playing field needs to be don...

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