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The appointment last week of businessman Matamela Cyril Ramaphosa as deputy chairman of South Africa’s National Planning Commission crowns both a business and political career that’s been as resourceful as it’s been colourful. Ramaphosa’s inclusion in what’s meant to be one of the most influential arms of Government shows the high regard in which he’s held and his indispensability and versatility, both in the ruling party and Government, as well as his importance to the business community as a voice of reason and leader par excellence.
Housed in the Presidency and headed by equally highly regarded Trevor Manuel, the commission’s main task is to produce a national long-term development plan for SA and introduce effective planning capacity and to guide Government, with a view to achieving higher economic growth and development.
President Jacob Zuma tasked the 25-member commission with developing well-researched and evidence-based proposals, cutting across the three spheres of government and across ministries and departments. “While each of those areas of work relates to an aspect of Government’s work, the commission is asked to take an independent, cross-cutting, critical and long-term view of those issues,” says Zuma. The exercise will enable Government’s policies and plans to be “more coherent and focused on achieving the type of society we all envisage”.
Responding to a question, Manuel also said the commission (which includes Vincent Maphai and the outspoken Bobby Godsell) was “not a job; all these people have a job. It’s a call to service” of the country.
Ramaphosa told Finweek he was  “humbled by this appointment to serve the nation”. “I expect that as we do our work we’ll focus on a people-centred process that will culminate in developing a shared vision and prosperous future for all our people.” Whatever the task, Ramaphosa says he’ll have to live up to the expectations of both the President and the nation.
The call to serve couldn’t have fallen to a better, more qualified and able candidate than Ramaphosa. After leading the transition to a democratic SA through the highly risky and troublesome Convention for a Democratic South Africa (Codesa) negotiations as secretary general of the ANC in the years to 1994, Ramaphosa was again tasked by his country (and party) to map out and lay the foundation for a modern and unified SA through the national Constitutional Assembly of Parliament. The result was a universally admired and progressive Constitution in 1996.
As with any resourceful and good  leader, after the Constitution was adopted it was then time for Ramaphosa to move on and leave active politics – some say because he’d lost out on being President Nelson Mandela’s deputy in SA’s first democratic Government and wouldn’t settle for anything less. It also soon became evident newly appointed Deputy President Thabo Mbeki made life uncomfortable for those he regarded as possible competitors.
Wits University’s politics professor and Ramaphosa biographer, Anthony Butler, says Ramaphosa’s inclusion in the commission will lend it significant political credibility. That’s because Ramaphosa, together with Manuel, are “robust individuals” who aren’t afraid of courting unpopularity. Another factor standing out about Ramaphosa’s inclusion as Manuel’s deputy is that he’s been mentioned previously as a possible presidential candidate. “That shows Zuma isn’t afraid to have political rivals in prominent Government positions, unlike Mbeki,” says Butler.
The overall quality of appointments has also improved under Zuma. “Retaining Manuel in Cabinet was great. And having Ramaphosa there will also enhance the commission’s political stature.” But Butler also says it’s premature to predict what it will do for Ramaphosa’s future political career. “It’s too early to say how important the commission’s work will be, seeing its function is still contested,” says Butler.
That’s because there are two other bodies in Government whose duties have also not been properly defined: Economic Development Minister Ebrahim Patel’s economic advisory panel and Collins Chabane’s Performance, Monitoring and Evaluation department.
Perhaps Ramaphosa’s negotiating skills and his generally warm personality can be a unifying force in a contested terrain. Although he left active politics, he has continued to garner the highest number of votes for inclusion in the ANC’s NEC, a tradition that repeated itself in a highly polarised 2007 conference, where he came in at position 30, with 1 910 votes out of 3 000.
Fourteen years after leaving active politics for business, Ramaphosa’s Shanduka Group (itself 10 years young) is worth “quite a bit of money”. However, on another occasion even going into business didn’t prevent Ramaphosa from serving his country as the task of mapping out yet another vision for the future fell on his leadership – a clear indication that perhaps there was more to the man than what drove some black magnates in business. That was the economic transformation vision, a difficult task for a lawyer.
In 1997 Ramaphosa was asked to head the Black Economic Empowerment Commission, whose report led to the passing of the Broad Based Black Economic Empowerment Act and then the drafting of the foundations for current black economic empowerment policy. The mission was to outline a strategy to bring about more economic opportunities for SA’s recently politically liberated but poor black majority. He led that process by example.
On the business front, Ramaphosa got going with the business of creating wealth for himself, joining New Africa Investments as deputy chairman in 1996 and acquiring stakes in the then Johnnies Industrial Corporation (Johnnic, now Avusa). That also brought with it his investment in cellphone operator and the JSE’s third-largest company MTN, which he chairs.
But what about strident criticism over recent years that empowerment has favoured an elite group of well-connected politicians? What that means is the inclusion of a small group of blacks in SA’s white corporate masonry, which continues to dominate economic life (see separate report). From banking to mining, manufacturing to media, white-owned companies since democracy have taken black “partners” – the most prominent being former liberation heroes, known as “the struggle aristocracy”.
Thus the same black faces pop up in boardroom snapshots. This co-option has allowed established and foreign capital to fulfil its legal obligations under new corporate charters and, more importantly, to gain access to the ANC’s establishment.
When a tender for a major project is proposed, or a merger is announced, it’s often a black executive at the top table who appears to be taking the initiative. The rewards are substantial.
When Standard Bank cut in Ramaphosa, and another millionaire and ANC power broker called Saki Macozoma, the pair netted millions in equity.
“Two people who are already very wealthy have got themselves a nice little stake in SA’s largest bank without, apparently, having to put down any cash,” reported Business Report. “And depending on the dividend stream from their Standard Bank shares over the next 15 to 20 years they may not ever have to pay anything at all.”
With what black empowerment has become over the years – a free for all and sometimes driven by naked corruption and outright greed – one can’t but wonder if Ramaphosa would still have lent his name to the process if he’d had the benefit of being able to see into the future.
Ramaphosa gives a resounding and immediate “Yes”. “We have made advances – but much more still needs to be done to make empowerment meaningful to many black people.” First, he says, business development has gone very well. “Many black people are getting into business and are getting on with developing their businesses. A large part of that is a direct result of our Government’s empowerment policies. The private sector – in the form of established businesses – is supportive through their procurement activities.”
Yet the reality remains that economic inequality between rich and poor South Africans has got worse, with a new coterie of connected beneficiaries also evidently busy looting the State’s largesse. That led Cosatu secretary general Zwelinzima Vavi, in September 2008, to talk about “disciplining capital”. Vavi said a “relatively small black middle class” was being “incorporated into the apartheid enclave of luxury consumption” by a minority. He could have easily added the State as well. “This needs to include subordination of finance capital to developmental goals, the control of capital flows, consideration of various instruments that can be used to discipline firms and State ownership in strategic areas,” said Vavi.
What Ramaphosa regrets is the overemphasis on the ownership aspect, mostly at the expense of the other and more important elements of empowerment, such as employment equity, preferential procurement and enterprise development. “For empowerment to gain traction we need it to transcend beyond the mere transfer of ownership. We often wrongly focus only on large empowerment stakes in established businesses. More focus should have been put on how empowerment should contribute to economic growth over the long term by creating a bigger base of wealth creators and productive capacity over the long term,” says Ramaphosa.
A long-term horizon for growth and development seems to be what Ramaphosa will bring to the commission. It would certainly be extremely naïve to think his story can end with his current role – business. A more careful observer will note that when Ramaphosa left active politics for business in 1996 he never left the ANC. Surely he realised his country and party might call on him to serve again and he doesn’t want to lose touch with it?
If the number of votes to the NEC – the ANC’s highest decision-making body between conferences – Ramaphosa received during the ANC’s national conferences of 1997 and 2002 are anything to go by (as they surely should be), he was the most popular member in the party’s grassroots (delegates to conference are nominated by branches in the townships, who should vote on their mandate) with the highest number of votes.
Why did he not leave the party’s NEC and focus all his attention on business? Would that have been a deliberate decision to ensure he’s close enough to its goings on to be able to determine when it’s time to return?
“You asked for an interview to discuss business, not politics,” he says with a broad smile. And then bursts out laughing, as if he’d been expecting the question. “I’m happy where I am, and as I believe that in business I’m also making a contribution, however small it might be.”
Another question on whether he’d be available if the party called on him during the 2012 elective conference is met with the same refrain plus a bit. “You called me for a business interview.” 
A question about nationalisation is initially met with the same answer before Ramaphosa ventures that President Zuma has said we shouldn’t be afraid to debate the matter of nationalisation.
“The fact of the matter is that SA has a mixed economy. The question that needs to be asked is what it is we want to achieve with nationalisation, if any,” says Ramaphosa. “If through nationalisation we’ll achieve great benefits – such as job creation, attract much-needed foreign investment, attract good and effective managers and have well run and efficient entities that provide the best services to South Africans – then we should sit up and pay attention.”
Ramaphosa says a few years ago Government nationalised SASRIA, the reinsurance company. “And the benefit that flowed from that with immediate effect was an R11bn dividend that helped to reduce national debt. As a capitalist with a socialist instinct I think a robust mixed economy with a developmental focus is what our country needs.”
Government is good at running some enterprises but certain things are best left to the private sector, with Government playing the role of regulator.” A capitalist with a socialist instinct? Ramaphosa says capitalism can’t survive on its own, especially in an underdeveloped and unequal economy such as SA has.
This may well be true. Yet Ramaphosa is a product of an ideological battle between those backing capitalism and empowerment in the mid-Nineties and his former allies in trade union federation Cosatu. How does he reconcile his “socialist instincts” with his apparent conversion to a black capitalist? How will that contradiction influence Ramaphosa’s role in the commission?  
Finweek’s parting shot is a question about whether it wasn’t a mistake during the constitutional drafting process to let 400 Parliamentarians (controlled by party bosses) to choose SA’s president instead of a direct vote by the electorate.
We draw parallels with Zimbabwe, with all its imperfections, and point out that Robert Mugabe was repeatedly directly elected by his own people. Given the kind of leadership SA now has, wouldn’t the electorate have done better by directly electing its own president, MPs, premiers, mayors and councillors? Had Ramaphosa known what would transpire a decade later would he still have pushed for the current electoral system?
Ramaphosa emphatically responds he’d still have chosen the current system and that he has absolute faith “in the party system”.
When the party thought it wasn’t on the same page with then President Thabo Mbeki, it asked him to step down and replaced him. “The party can always be trusted to have the best interests of the country at heart. I’m a party man,” says Ramaphosa. Before repeating our subject matter was a business interview.
BLACK ECONOMIC EMPOWERMENT
When is a black person finally empowered?
After 16 years, how far do we still need to go to see full empowerment of the masses?
WHEN IS A BLACK person finally empowered? Have the past 16 years of black economic empowerment yielded anything positive towards the realisation of economic liberation for black people? Must there be a deadline by which to end the entire empowerment process?
“Those are wrong questions to ask,” says Cyril Ramaphosa, one of the individual “usual suspects” of empowerment. There’s been too much criticism of individuals, with too much focus on the ownership aspect of empowerment, while all the other more important aspects – such as enterprise development – have almost been completely neglected. “That’s the mistake we make – looking only at equity ownership,” says Ramaphosa.
The first 16 years of South Africa’s black empowerment policy have brought with them mixed fortunes for the country’s previously disadvantaged black population. While empowerment has produced a thriving and growing middle class – with individual billionaires coming through the ranks of the black population who have gone on to represent not only the black population but the country as being among the richest individuals on earth – an estimated 10m South Africans were still living in abject poverty at year-end 2009, says the Business Trust.
Ramaphosa’s answer to the critics of the current form of empowerment is that it “shouldn’t just be a numbers game; we should focus on the broadness of the process”.
It’s the qualitative work that’s needed, not just the numbers. Says Ramaphosa: “The impact empowerment makes on society is what needs to be looked at.” For a broader impact on the general population, Ramaphosa says the process needs to shift focus and give more attention to other areas of the empowerment scorecard, such as skills development, employment equity, preferential procurement and enterprise development, and more inclusion of communities in empowerment deals and community development.
That’s one of the Shanduka Group’s strongest points. When it was founded 10 years ago, Ramaphosa personally gave up equity to two trusts: one focusing on education and the other on small business development. Specifically, small businesses led by women and young people.
Ramaphosa has a ready-made answer to the question of bringing a deadline to the legislated empowerment process. “Empowerment is like waking up every day and brushing your teeth. It must be done every day.” Empowerment should be seen as an ongoing process, just like democratisation. “When do we have enough democracy?”
He says empowerment can never be regarded as complete until all the different economic aspects have been paid enough attention and SA’s previously disadvantaged population is able to stand on its own feet and run businesses without hindrance and eke out a decent living from their jobs or businesses.
Given SA’s historical skills and education problems, there’s a process that needs to be followed to bring blacks to those levels of competency as developed businesses. Renewed focus needs to be paid to enterprise and skills in order to develop more economic capacity.
Ramaphosa also wonders if those “other aspects” of empowerment can ever be achieved in one go. “All those things are part of empowerment and they haven’t been done to a level that leaves people fully empowered. We can only begin discussing full empowerment when those things have been done to perfection and leave black people in charge of their own destinies,” Ramaphosa says.
Although he bemoans the undue focus of the past 16 years on only the equity ownership side, Ramaphosa declares he’s happy with the progress with regard to empowerment so far, despite his admission it hasn’t exactly achieved all that was initially hoped for. “Measured by black ownership of equities on the JSE,  empowerment hasn’t succeeded as well as we would’ve liked,” says Ramaphosa. At an estimated unencumbered 4%, black equity ownership isn’t what it should be.
But that brought a positive side: empowerment has evolved. Some of the small equity stakes gathered through debt in the early days of empowerment have helped facilitate a growing list of significant black-owned businesses, such as Shanduka and Sexwale’s Mvelaphanda Holdings.
“Whereas 16 years ago black businesspeople had to rely solely on debt to fund equity purchases, today we now bring a chequebook to a deal,” says Ramaphosa. “I’m happy with the way empowerment has gone. We’ve used those small stakes to boost our balance sheets,” using Shanduka’s 1% ownership of Standard Bank as an example.
Companies such as the Royal Bafokeng and the Mineworkers’ Investment Company (MIC) emerged in similar fashion. With a few others, they all have since made significant inroads into mainstream business by buying large strategic equity stakes in companies like Primedia, Impala Platinum and Harmony Gold, which have helped black groups move to operate some companies themselves.
 Many black business owners aren’t seen because they don’t become involved in big ticket empowerment deals that grab headlines like the usual suspects. “They’re getting on with their work of developing their businesses,” says Ramaphosa.“We should be proud of that.” 
NPC
A perfect platform

IF CYRIL RAMAPHOSA needed a platform from which to re-launch a formal political career – if not ultimately a bid for the presidency – the National Planning Commission (NPC) is it. The bottom line is the NPC isn’t going to come up with anything new. In other words, there’s nothing out there needing to be discovered about what needs to be done to get South Africa’s economy to grow at the much talked about  and anticipated 6%/year.
But what is needed – such as tackling SA’s labour unions, confronting a lethargic public service and actually doing what it takes to amplify foreign investment – requires some politically tricky decisions and follow-through.
For that reason Professor Robert Schrire, of the University of Cape Town, says: “The NPC is only going to be as good as its political connection.” When it comes to political connection, says Schrire, the minister in charge of the NPC – Trevor Manuel – is a spent force. As Wits Professor Anthony Butler notes, Manuel “can no longer be described as a polarising figure: everybody now claims to hate him”.
But Ramaphosa, who was appointed to the NPC as Manuel’s deputy, has managed to retain political credibility and clout. While he’s also a grandee in the ANC’s executive echelons his kudos and influence appear not to be limited to any particular faction in SA’s ruling party. This means there are a few ways in which you can look at Ramaphosa’s inclusion in the NPC. For example, Ramaphosa could – if Manuel ends up leaving Government – be groomed over the next few months to take over as chairman. But even if that scenario doesn’t materialise, Ramaphosa is likely to find he enjoys more real influence than Manuel on the NPC anyway.
“There will always be a natural tension between the minister in charge of the NPC (Manuel) and the independent thinkers on the panel. That may make Ramaphosa the real influence,” adds Schrire, who says that’s made more possible by the fact Ramaphosa is a “superb” diplomat, building consensus and steering groups in the way he wants to go.
Ultimately though, whatever plays out Ramaphosa’s new role will formally reintroduce him to political life. All this from a position that’s right at the centre of the presidential and State machinery.
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