Johannesburg - Public Enterprises Minister Malusi Gigaba on
Thursday defended a decision by black business to break away from Business
Unity SA (Busa).
He said there was concern about black economic empowerment
"fronting" because it eroded the potential for authentic black
businesses.
"Look at the management core in South African business,
look at the ownership of industries and enterprises," he said in an
interview with SAfm radio station.
He was responding to a decision at a Black Business Summit
on Wednesday to form a new Black Business Council, with businessman Patrice
Motsepe as chairperson, and to immediately suspend its participation in
Business Unity SA (Busa).
"The fact of the matter is that after 17 years of
(black economic empowerment) much of what we have seen with BEE is the
emergence of black shareholders who play no part in the management and
ownership of the enterprises in which they hold shares. (There is) a lot of
fronting."
"Fronting" is a term used to describe the practice
of white businesses presenting fake black business partners or directors to
fulfil the black ownership requirements that accompany tendering for government
business.
Gigaba said it was still important in South Africa to have
black business organisations.
Although South Africa had a lot to benefit from a unified
non-racial business organisation, that should be the "culmination of a
process".
There was still racism in the private sector, said Gigaba.
"Just look at a few things... look at the Johannesburg
Stock Exchange ... black ownership of productive capital is quite low.
"Look at the management core in South African business,
look at the ownership of industries and enterprises."
Black businesspeople also had no access to finance, and
complained that even development finance institutions were not supporting them.
"We think that the resurrection of black business is an
important step that needs to be supported."
Government needed to support black business formations and
business in general and "genuine" transformation issues needed to be
identified.
In a speech prepared for delivery on Wednesday night, Gigaba
said the conduct of some private companies was fuelling the debate on nationalisation,
"There is a growing underlying legitimacy crisis
regarding whether the private enterprise is a 'socially responsible'
institution, capable of both developing the economy in a sustainable manner and
equitably sharing the benefits of economic growth and development."
In a separate interview on SAfm, Xolani Qubeka, chairperson
of the black business summit organising task team, said there was a need for a
unified business structure in South Africa, and that structure was currently
Busa.
"It must be understood black businesses were part of
the founding of Busa."
But, although they had resolved to suspend their membership
of Busa, they did not exclude going back to the business body.
Their future would ride on the outcome of discussions with
Busa.
The Black Management Forum membership of Busa pulled out
earlier this year, as they felt black opinions were being overrided.
Business Day reported that on Tuesday that Busa CEO
Nomaxabiso Majokweni and president Futhi Mtoba were asked to leave the Black
Business Summit. They were apparently invited by mistake, and were asked to
leave because Busa was going to be discussed.
Qubeka also called for a 50/50 representation at the
National Economic Development and Labour Council, saying present representation
was majority white.