WORDS, SPEECHES, PROMISES- AND LOTS OF HOT AIR. THIS IS WHAT THE CRIMINAL ANC HAS BEEN SPOON-FEEDING THEIR ELECTORATE THESE PAST 15 YEARS. THE REASON- JUST TO PLAY FOR ENOUGH TIME TO STUFF THEMSELVES WITH WORLDLY RICHES AND STOLEN RESOURCES THAT RIGHTFULLY BELONGS TO THE SOUTH-AFRICAN TAXPAYER...I.O.W- THE WHITE TAXPAYER....THE OPPRESSED NATION.
Super-rich black elite. Duncan du Bois
Finance Minister Trevor Manuel's statement at a black economic empowerment conference in Cape Town last week that "government could shape policy and promulgate legislation but could not create entrepreneurs" (Business Report, May 21) highlights the basic fault line running through empowerment policies.
Two weeks ago it was reported that black investors had taken a 25% stake in Investec bank, the country's fifth largest, in a R810 million deal. The photograph published in Business Report (May 16) showed the smiling faces of Peter Malungani of Peu and Kani Titi of Tiso applauding Andy Leith, the MD of Investec. Their applause, however, should actually have been for the Public Investment Commission (PIC) because R550 million of the R810 million investment was funded by the PIC which administers the public service pension fund.
Writing in the Business Watch column of Business Report, Max Gebhardt commented that "no flies are hanging around the Investec boardroom when it comes to fulfilling its empowerment objective. It has not even bothered to wait for the much-heralded financial services charter for guidance". Too right. With cash from an impeccable source like the Public Investment Commission, Investec can afford to smile. A legislative target has been reached and two black businessmen have been fast-tracked into the ranks of the super-rich. The eight-year funding structure ensures that at the end of the funding period Peu and Tiso retain an unencumbered equity participation in Investec. Whatever their future fortunes, Malungani and Titi can't lose. Is that empowerment or enrichment? And where does entrepreneurship come in?
No wonder one analyst stated that "the PIC pensioners are taking all the risk while a few black empowerment groups are set to benefit from whatever upside there is". If it made sense, he said, to invest in Investec, then the PIC should do so directly. "That way it would benefit from all the upside as well as being exposed to all the downside (Business Report, May 16). Of the Investec deal, a fund manager was quoted as saying "the PIC must remember its fiduciary responsibility to its members and not to government policy".
Put another way, the PIC is providing a get-rich-quick subsidy to a select group of people. If empowerment is meant to reach out and to energise new economic terrain, then the empowerment of Peu and Tiso is a misnomer. They're just piggy-backing on an established business. Malungani of Peu admitted as much when he said he would benefit greatly from exposure to Investec's business units (Business Report, May 16).
Basking in reflected glory is simply good fortune and nothing else. Yet the creation of a super-rich black elite seems to be what is happening. Ten years ago Tokyo Sexwale was a political hell-raiser earning R2 500 a month working for the ANC out of Shell House. Last December he bought Oude Kelder wine farm at Franschhoek for R15 million. As head of the multi-million rand mining company Mvelaphanda he has done well out of empowerment. Patrice Motsepe of ARMgold has also made stellar progress. He's now worth R3,1 billion. Increasingly, boardrooms bristle with black executives. But where's the trickle- down effect? Instead, poverty and joblessness among blacks have increased while the income gap between the black empowered elite and the masses has reached obscene proportions.
The SA Human Rights Commission, a body appointed by Parliament and charged with monitoring human and social rights in the country, recently accused the government of failing the poor. In a wide-ranging report it cited, inter alia, the increase of informal settlements as proof of insufficient delivery of housing.
Gross underspending on welfare aid, maladministration and general incompetence were cited as underpinning the failure to honour commitments to improve the quality of life (Mercury, April 23). Black empowerment did not feature in the picture as an instrument to alleviate poverty.
On this score, Manuel has been critical. He rightly says empowerment should not aim for mere ownership targets but should go deep into rural areas and pull people into the economy (Business Report, May 21). Addressing the National African Federated Chamber of Commerce (Nafcoc) last September, Remgro chairman, Johann Rupert, exploded the myth that the Afrikaner road to riches had been devolved by the state. He said the success his father Anton had in building his Rembrandt group was the result of individual initiative and sound business principles rather than anything to do with being an Afrikaner. In any case, he said, racial exclusivity was hardly a model to emulate (Business Times, September 29, 2002).
Yet it would seem that Rupert's words fell on deaf ears. Danisa Baloyi of the National Black Business Caucus insists that the government must play a bigger role in empowerment. She would do well to study some local economic history. The C. G. Smiths, Huletts, Ernest Oppenheimers, Ruperts, Hersovs, Reddys and numerous other South African entrepreneurs earned their way to the top by hard work, enterprise and initiative. There were no quick-fix, state-assisted passages for them.
Self-sustaining wealth is the product of entrepreneurship. And it is what people invest in, not colour. Despite the fact that there is a plethora of laws favouring black employment and that the government of the day is black-dominated, the call by black business leaders like Baloyi for still further government assistance in promoting empowerment simply smacks of greed and the prospect of enrichment. No wonder the black empowerment stake in the JSE Securities Exchange has shrunk to below eight percent.
· Duncan du Bois is a DA Durban Metro ward councillor. He writes in his personal capacity.