Johannesburg - The new administration would do well to build on the solid foundation for economic transformation and empowerment put together by the old regime through various sets of legislation.
Transformation observers say empowering the BEE Council and giving it teeth to monitor the implementation of empowerment and punish non-compliant companies could be the greatest achievement for the administration led by President Kgalema Motlanthe.
Another goal that is achievable before April is the accreditation of rating agencies that do independent black economic empowerment (BEE) verifications and audits.
"Getting the BEE Council off the ground is critical and long overdue. Such a council needs to operate in a similar manner to the Competition Commission.
"Companies doing empowerment deals need to disclose their terms and conditions to the council for approval. The council should have the powers to veto transactions that are not sustainable," says Sandile Zungu, executive chairperson of investment company Zico and a supporter of ANC president Jacob Zuma.
Zungu adds that such a council must deal with the failures of the past, such as BEE transactions that fall apart two years after making the headlines, leaving empowerment partners with nothing or a mountain of debt to service.
Such a council must also have powers to sanction boards of listed companies that are not transforming or facilitating transformation in the companies they represent.
"The emphasis has to be on implementation of BEE. Companies and the government need to go beyond the bare minimum on empowerment. We need to look at how empowerment is creating jobs, opening procurement opportunities for smaller suppliers and how it facilitates enterprise development," says Vuyo Jack, chairperson of rating agency Empowerdex.
But the new administration may face a short-term legitimacy challenge.
'Time too short'
"Their time is too short to do much. They are a caretaker regime and will be so perceived by the populace and so treated by the ANC. Their greatest challenge is to avoid being treated as a lame-duck administration," says Saki Macozoma, deputy chairperson of investment company Safika and a long-time ally of former president Thabo Mbeki.
Businesswomen's Association president Basetsana Kumalo praises the Mbeki administration for increasing the opportunities for women in business and the implementation of various support structures intended to assist in the development of women in the entrepreneurial and corporate environments.
"We encourage the incoming leadership to grasp the opportunity of the day and to continue driving our nation towards its ultimate goal of economic growth, sustainable development, poverty alleviation and equal opportunities for all," says Kumalo.
Trade and Industry Minister Mandisi Mpahlwa has the responsibility of accrediting verification agencies and constituting the BEE Council.
Significantly, Motlanthe affirmed that the ruling ANC would stick to the current policies as he took office on Thursday.
"We will remain true to the policies that have kept South Africa steady and that have ensured sustained growth," said Motlanthe during his acceptance speech.
So, where does this leave new empowerment players? New entrepreneurs are expected to emerge as existing BEE transactions mature and some black entrepreneurs opt to liquidate their investments after the lock-in periods expire.
Jack said it was unlikely there would be a purge of the businesspeople linked to the Mbeki administration because such an exercise would be expensive if the empowerment partners have not breached the transaction terms and conditions. Another inhibiting factor was the present economic climate, which would make selling and financing a new transaction difficult.
As the major transactions have all but dried up, a strong focus on enterprise development and affirmative procurement held the best chance of making black South Africans feel that they control, manage and actively participate in the economy.
State-owned enterprises have a key role to play in this regard. Business has demonstrated that it will take the lead from government when it comes to pursuing empowerment. This is important, given that many procurement and enterprise development opportunities reside within the private sector.
The industry transformation charters came about after the government initiated charters in the sectors in which it grants licences or provides regulatory oversight.
State enterprises have in the past played a leading role in advancing the management talent of blacks by giving them meaningful jobs and offering black companies opportunities to be their suppliers. But in recent years, state companies appear to be shirking their responsibility.
Black professionals such as accountants and lawyers are doing less work for government departments and companies now than they did at the turn of the century.
Zungu says it will be easier for black entrepreneurs to convince white companies to implement empowerment if state companies are in the lead.
The new administration did not tamper with the ministers in the economic cluster, except appointing former justice minister, Brigitte Mabandla, to head public enterprises following the retirement of Alec Erwin. This ensures continuity in the cluster and should give black people genuine hope that their lot can be improved.
- City Press