Black business wants a bigger slice

2012-10-14 17:38

Johannesburg - Having realised that BEE has not delivered meaningful ownership of SA’s economy, the Black Business Council is pushing for black entrepreneurs to start their own businesses to create jobs.

The Black Business Council celebrated its second anniversary this week amid calls by its bigwigs for government to give black businesses a 30% slice of the planned R1.3 trillion infrastructure spending.

The spending is expected to usher in a new era in South Africa’s re-industrialisation and the council wants to use this investment as a launch-pad for creating 200 black industrialists yearly, starting from next year.

The council’s change in the tone also signifies a shift in strategy in the way black people have been accumulating wealth in the post-apartheid era.

In the last 16 years, blacks have amassed a vast quantity of their wealth through buying BEE stakes in large, white-owned companies, but have done very little to create new, sizeable businesses.

The council’s executive chairperson, Xolani Qubeka, told City Press that this strategy has failed to create jobs and to promote entrepreneurship among black people.

“We need to inculcate a culture, within our members and a broader black community, that buying stakes in large, white-owned companies does not create jobs.

“It creates wealth for the shareholders who bought in, but does not create new employment."

Target infrastructure spending

This week, the council invited the chief executives of some state-owned enterprises (SOEs) that are leading the infrastructure projects to its annual summit held in Midrand, Gauteng.

The message was clear: give blacks a significant share of the business.

In attendance was Brian Dames, the chief executive of Eskom, which is spending more than R300bn on building new power stations and transmission and distribution infrastructure.

Lucky Montana, the chief executive of the Passenger Rail Agency of South Africa (Prasa), was also in attendance.

Prasa is spending R126bn to buy more than 7 000 train coaches over the next 10 years while transport and logistics parastatal Transnet is investing R300bn over the next seven years to upgrade its locomotives and ports.

“With this infrastructure investment, we have entered a new era of reindustrialisation, which means there is a window of opportunity to create new capabilities.

"We can build new capacity to build trains instead of purchasing them abroad.

“When South Africa was under sanctions, it was able to reindustrialise and build new capacity in arms manufacturing, for instance,” Qubeka said.

He said small black construction firms should be looking at merging to build economies of scale and take advantage of opportunities presented by the construction of power stations by Eskom.

“The starting point is for small, unsustainable black companies to come together to build new capacity and competencies,” he said.

Split with Busa

Qubeka also made it clear that the council was not seeking to merge again with Business Unity South Africa (Busa) after 18 black business and professional lobby organisations broke away from it.

Busa had been acting as a mouthpiecefor business formations, be they black, white, big or small.

“At this stage, Busa is not on our radar screens for affiliation purposes. However, we have agreed with Busa to collaborate on various programmes,” he said.

Busa and the council have already signed a joint agreement with the UN Development Programme.

The joint agreement will pave the way for big companies to play a role in the creation of small companies, particularly black suppliers.

“Big companies will outsource non-core components of their businesses to small companies,” Qubeka said.

Busa and the council are also sharing a seat at Nedlac, the government, labour and business negotiating chamber.

Qubeka said the council did not want its agenda to be diluted again by Busa, which black business sees as being controlled by big white capital.

“We want to avoid the issues that made us leave Busa in the first place. Our focus is to create new black industrialists.

“We want to create a thriving black middle class within an expanding South African economy,” he said.

Progress since last year

Qubeka said the council, which is made up of 22 black affiliate formations, has since its relaunch played a significant role in influencing changes to legislation.

One of its key recommendations is the criminalisation of fronting, where black partners are fraudulently exploited to win state tenders on behalf of white businesses.

“We want to ensure that the major beneficiaries are black. We are quite certain that when the new BEE Amendment Act is enacted, there would have been a significant contribution from the BBC,” he said.

The council is also pushing for the scorecards of the BEE codes of good practice to be made less onerous for black businesses.

He said it was unfair for 100% black-owned companies to score less than majority-white owned companies when it came to empowerment scoring.

“A 100% black owned company should be scoring level one. Black companies don’t have to go through onerous scorecards,” Qubeka said.

The council also signed a memorandum of understanding with the Indian Chamber of Commerce and Industry to enable council members to form joint ventures with Indian companies in the areas of manufacturing and tools making.

- City Press

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  • elgh.elgh - 2012-10-14 18:06

    "The council is also pushing for the scorecards of the BEE codes of good practice to be made less onerous for black businesses." Yet again want to do less for more....

      mattewis.kat - 2012-10-15 08:09

      Exacly, elgh.elgh! Thing is, "Black Business" should start learning to "bake the cake" rather than "demanding" ever larger slices of the one they did not bake! This entitlement attitude will have to stop before there is nothing left of the previously baked cake! You can't just waffle on and on about "wealth accumulation" without showing your contribution of significant value in actually earning said wealth! We do not see any new BEE industries emerging in SA to achieve this, and without it the current strikes and civil unrest is only the start of worse yet to come!

      jo.barton.92 - 2012-10-15 12:14

      @learto, just how many Indians and Coloureds belong to this group? Why is it, when applying for jobs, Indians are turned down because they are not AA candidates?Fact is Indians are only classified as Black when it suits you, every other time, you will never compete with them.FACT!

      lerato.kay.3 - 2012-10-15 12:21

      @Jo.barton, I hope you are not serious, this says a lot about SA people's comprehension of the constitution. It won't kill you to read the act and stop living in your own world! Indians are blacks and so are the Chineese!

  • George - 2012-10-14 18:34

    As a taxpayer my money had better be awarded to whoever is best qualified for the job. Black, white, rotten teeth, pearly whites, who cares. If it is not, there won't be any more coming from me. Luister nou goed!

      arthur.salvado - 2012-10-15 07:27

      Ek luister saam

  • cecil.wright.142 - 2012-10-14 18:40

    Just another form of theft and wealth distribution. If these people were so clever then why have they not started business's already? I suppose that it is much easier to wait for a big handout and then blame everyone else for their failure

  • goyougoodthing - 2012-10-14 18:41

    The secret to entrepreneurship is hard work. The harder you work the luckier you get, true of golf and Gary Player, true of life and work. Hard work is not a strong trait in SA, without it, no amount of money will fix your business. In fact business needs no money to work, it might just take time to get going. Also, injections of money may make a business grow so fast that the owner won't have the time to develop the skills to run it properly. Baby steps, but baby step are not favoured by lazy people.

      aristar.aristary - 2012-10-14 19:42

      The laziest people I have ever had to deal with are the South Africans. They all want you to give them something. They don't work. They just say gimme.

  • carl.lotter.3 - 2012-10-14 18:59

    South African Small and Medium Enterprises federation offer BBC, BUSA, NEDLAC and all the others a hand of partnership to focus on SMME development, to build the SEBRAE of South Africa for SMME but the have not accepted the invite. The question therefore are they serious about SMME?

  • Gatvol Griet - 2012-10-14 19:01

    Yeah you chop! Stealing has never been the way to do it. Next, introduce a free market system where people compete to become better and stronger, where the most competent person wins and you'll have set the black man free!!!!

      aristar.aristary - 2012-10-14 19:43

      That is why the Chinese are here. They know how to work!!!!

  • Tony Lapson - 2012-10-14 19:20

    Brace yourselves... racist, political and hateful comments are coming.

  • paul.delagay - 2012-10-14 19:23

    Oh wow

  • iwillemse - 2012-10-14 19:31

    give it 2 them, give them everything, give ,give, give. let them hav it all.

  • pcmynhardt - 2012-10-14 19:46

    fools paradise

      aristar.aristary - 2012-10-15 04:25

      And we are the fools to let it happen. The voters have the power to get rid of the Black Elite Empowerment.

  • Partiboy - 2012-10-14 20:06

    This country is on the brink of civil meltdown if we keep on dividing every race into seperate groups/businesses. With that said, is there any 100% owned white engineering firms out there to cater for white individuals born in 1988? lol

  • julio.sanfona - 2012-10-14 20:59

    You're on a road to nowhere. How will all this favouritism make South Africa more competitive, especially in the big international market. For South Africa to prosper, we have to raise the bar so that we can grow internationally. The international markets don't give a rat's ar$e about black empowerment, Bee or any other acronym, they care about price, quality and efficiency. By having any sort of protectionism, especially where any section of the comunity get preference we lead to crooked deals, fraud, corruption and inefficiency. In other words, more of the same medication that we've had for the past 18 years and which we know didn't produce the desired effect. Give the contracts to the best and most cost effective players and let the others that didn't win the tender this time around up their game.

      badd.azz.5 - 2012-10-14 21:49

      You obviously are not to worldly. Favoritism built a lot of big multinationals ie ford vw BP shell etc. protectionism is still practiced the world over ie EU subsidies to farms, British ban on bottled imported wines, no google or Facebook in china. Every country develops its own economic strategy based on its needs wants capabilities and lack thereof.

  • bcluley - 2012-10-14 21:43

    When will they realise?

  • bob.small.7547 - 2012-10-14 23:33

    About time some of them did something for themselves from scratch instead of wanting a slice of the established action!. Teach a man to fish...don’t give him fish!

  • nick.vuletic - 2012-10-15 01:39

    I want I want I want...nothing ever changes. The only way to up lift anyone is through education. Pitty the ANC doesn't understand this, and never will... Eish I want some more

      aristar.aristary - 2012-10-15 04:32

      Gimme, gimme, gimme is the chorus.

      arthur.salvado - 2012-10-15 07:29

      ANC does understand the need for education. No deal as far as the ANC is concerned because they would then lose all the votes. Keep them stupid, give a boerewors roll and get the vote. Got it ?

  • KCorsar - 2012-10-15 07:45

    Another path to making it easier for tenderpreneurship to flourish

  • sarecen.smith - 2012-10-15 09:24


  • JamesMWood - 2012-10-15 09:55

    So by not being required to be liable to keep in line with BEE scorecards what they are really saying is we only want to hire black males, no women, indian coloured or wheel chair bound people but we still want to be considered as level 1 EE employers

  • winifred.watson.9 - 2012-10-15 10:42

    There are many people who have been unemployed have stepped up and created in their own means of support and I really applaud them that they did'nt sick back and wait for jobs to fall in their laps as so many do. Here again I have to say that all this nonsense with BBBEE EE AA have failed and also the intereference in quotas of colour. You cannot be productive if you are limited to working with one hand instead of two. We have seen a lot of little black pavement business's increasing but this is good to an extent but these little business's dont contribute to the income of the Country and this puts a lot of pressure on those supporting the country. Its time now to drop all this labour nonsense crap, it is not working and lets work together in uplifting the people as well as making a contribution to society. Its is actually a very big shame that everything is blamed on black and white, we are all born africans, being black or white or whatever should not been seen as a problem. The problem, is the problem people have with this issue and its them that are damaging the economy and also fueling racial tensions. If all were treated equal we would not be having these issues sooner or later the past has to be buried goodness we are living in the year 2012 with modern technology while we sit and throw insults or fight black and white the world is passing us by. We need to move on for a better country, better economy and whats more as a much better hardworking nation.

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