Mantashe: I have serious issues with BEE

Mantashe: I have serious issues with BEE

2012-08-22 10:34

Johannesburg - ANC secretary general Gwede Mantashe has said he has "serious grievances" with BEE focusing on shareholding rather helping beneficiaries gain a deeper understanding of business on Tuesday. 

He was addressing analysts as part of the ANC's programme to speak to various sectors in South Africa.

Mantashe said the ANC would meet the Black Business Council (BBC) to discuss the strengths and failures of black economic empowerment (BEE) and the role of state procurement in transformation of the economy.

A representative from the BBC had complained that the government's procurement policy had gone wrong.

Various delegates raised questions about the effectiveness of BEE policies.

Mantashe responded that he had a problem with the idea of BEE.

"I have a serious grievance with BEE... focusing on shareholding with beneficiaries not being operational."

He said if the beneficiaries of BEE deals were not part of operations, they were not gaining a deeper understanding of the business in order to grow.

"Operational exposure, to me, is more powerful than just ownership..."

Not a window-shopping CEO

Mantashe drew parallels with when the Afrikaners were in power from 1948 to 1994.

"Afrikaner capital, after 40 years in power,... they couldn't produce a single CEO of mining, not one."

All CEOs of mining companies up until 1994 were white and English.

"We should not wait for 40 years to produce genuine black CEOs who can run companies."

He commended Exxaro Coal's South African CEO Sipho Nkosi for not being a "window-shopping CEO".

"Sipho Nkosi is not a big shareholder, but he is very operational... he knows mining. To me, that is how we are going to transform the economy."

When questioned about factions within the ANC, Mantashe said they had been around for years.

"I wish we can have an organisation that has no factions."

He spoke of a Pan-Africanist faction splitting from the ANC amid "violent polemics" in 1959.

"It was then, it is today, it will be in future," Mantashe said.

However, he said: "When there are confrontations in an organisation, we always exaggerate them as always a division about to see a split. I think that is a flawed analysis when there are politicians."

He said the contradictions helped move the party forward.

"The fact that people have different views... actually it sharpens you."

Must deliver

Black business should deliver affordable, quality products and services if it wants government contracts, Mantashe said.

"As we support black business, black business must bring a commitment of delivery, cost-competitive and quality of items that are procured," he told analysts and business people in Soweto.

He asked why a government-built school cost a minimum of R20m to construct, while a private sector-funded school only cost around R5m to R10m.

"Something is wrong with this system of creating layers and layers of business because the primary objective of building a school is made secondary... to creating business beneficiaries."

Mantashe said the primary outcome of the ANC lekgotla in July was that the government needed to drop the system of tenders.

It needed to move away from giving business to black companies, and then afterwards arguing about quality and cost.

"Don't undermine this question of people delivering bridges that get eroded with the first rainfall. It can't continue. It just can't continue. It is wrong. It is wrong."

Mantashe suggested that black businesses look to SizweNtsalubaGobodo, South Africa's largest black auditing firm, as an example of how to succeed.

The company started small, but now handled the entire audit account of parastatal Transnet because of the quality of its work, Mantashe said.

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  • nads.delange - 2012-08-22 10:43

    So do we!! Get rid of it and this country will be much better off!

      Rob.Trianglem - 2012-08-22 11:17

      Because Mantashe the private sector gets 3 quotes for the building and there is no corruption as when you hand out tenders. Thats why my dear fellow we can build it for 1/2 price.

      nads.delange - 2012-08-22 11:34

      It's been 18 years, those people who have still not accomplished anything with their lives obviously do not have enough ambition, there are so many opportunities to do something with your life if you just WORK HARD. Not something the ANC likes promoting though, that's too hard. And they keep voting for the ANC so obviously they're not too unhappy with their situation.

      tgif.wtfaw - 2012-08-22 11:52

      It's a complete insult and an irony that this ANC Policy " BEE " is named after the most hard working efficient creatures on the planet.If I was a bee I would agitate all of my friends to become killer bees and go on the rampage to wipe this most inefficient corrupt bunch off the face of the Planet. They are the biggest lot of parasites the world has ever seen.

      claudia.meads - 2012-08-22 12:00

      "...the ANC would meet the Black Business Council to discuss... economic empowerment...". That is like asking a potato why it tastes like a potato - and they criticize the NP... He asked why a government-built school cost R20m vs a private sector-funded school = R5 - R10m – I will tell you = (bona fide) COMPETITION. Nothing in the known universe drives costs down like uninhibited competition – something BEE is wholly devoid of – that is the fundamental reason BEE/AA is an inherent paradox and as such the entire notion is still-born. BEE/AA has never worked and never will – it is fundamentally- and inherently flawed at every conceptual- and practicable level. The real frightening aspect is that one of the kingpins of the ANC’s idiocracy is too dense to grasp that the reason (for the failure of BEE) is contained in his own (evidently) pre-prepared speech... I am getting sick of the ANC’s obligatory sophism – it cannot open its mouth without a reference to Apartheid. I do not have the (relevant) historical data, but I would like him to explain individuals like Marius Kloppers to me, before he makes loaded comparisons. If I was Patrice Motsepe I would not sue this idiot – I would ‘bl*ksem’ him. The free-market has created some of the most astute black business accomplishments on earth – while Affirmative Action (anywhere) has NEVER..! The fundamental ‘Impetus for Failure’ is the ANC’s intervention in the economy – ‘finish and klaar’.

      sandra.j.rennie - 2012-08-22 14:38

      N A F I ! That's all it is !

      Luvo - 2012-08-22 18:35

      Now, when comparing quotes one has to understand the build up cost that finally goes into the final rate the person submits. An established white business, for instance, may submit a far less quote because they own the property they do business on whilst a newly formed black business might submit a more expensive quote due to high rental costs, office establishment costs, new equipment still being paid for, new fleet for the company etc. All of these have to be taking into consideration when one looks into why the rates for doing the same work differ significantly.

      konstabel.koekemoer - 2012-08-23 08:59

      I fully agree, it is high time South Africa abolishes all racist policies. AA and BEE may have been a necessary evil to kick start transformation in the first 10 years of democracy but almost 20 years later it is just plain wrong. I am convinced that the majority of black South Africans would have advanced more if AA and BEE were abolished in 2004. Instead only a relatively small number of tenderpreneurs and corrupt officials have benefitted while SA's productivity has sunk to an all time low. - 2012-08-23 14:35

      seems.ike this guy(Mantashe) is the same as the rest......all about the past...nothing about the future. again, second rate politicians dwell on the past to hide their lack of ability BTW...who is the CEO of BHP Bill?

      aaron.radebe.1 - 2012-08-23 16:20

      But why on earth does the chairperson of the South African Communist Party give a hoot about anyone's operational role in business, anyway? Does he not understand the concept of communism, i.e. the ideology of the party of which he is the chairperson?? Communism technically doesn't allow for the concept of non-state owned "business" or private "shareholders", so what is this feeble man going on about? Does he not understand his own ideology??

  • barry.ahern.3 - 2012-08-22 10:46

    Heres a way forward...stop expecting hand outs from successfull businesses, and actually educate people to start their own successful businesses. Why is it that government are always looking for the easy way out? YOU ARE NOT OWED ANYTHING YOU LAZY BUNCH ON CRIMINLAS!

  • TDCuteone - 2012-08-22 10:47

    Now that you have cashed in, you have serious issues with it.

      ianon.ym - 2012-08-22 10:53

      You too noticed ...

  • rbphiri - 2012-08-22 10:47

    Yes MR Mantashe to some extent you are right, but sadly it has also made many people dependent on the policy instead of them going out to be entrepreneurs. People sit on their lazy rears waiting for government to give them a job, since they feel that the policy entails them to an immediate coperate position.

      pieter0827006294 - 2012-08-22 11:18

      Mr RPhiri you are spot on. We think we have a serious problem with unemployment now, it is not going to get better and this is a culture that was created over the past number of years by the current BEE system. Our government together with private sector should work on getting people to develop new businesses, especially manufacturing. This coupled with entrepreneurship taught in schools will still take many years to create a turnaround in joblessness. Marikana is just the beginning of many such incidents that should have been addressed years ago instead of the current BEE system

      Robin - 2012-08-22 14:28

      The problem is that most of the top-ranking ANC cadres have never worked in all their life and now it is expected of them to create work !!!!!!!!

      paul.bester.50 - 2012-10-03 08:46

      RPHIRI - you da man !

  • marnusmnorval - 2012-08-22 10:48

    Yes there is serious issues with BEE, but the only people that can fix it are the people who benefit from it.

  • TDCuteone - 2012-08-22 10:49

    Now that you have cashed in, you have serious issues with it. PLEASE!!!

  • JevonMarshallJohnson - 2012-08-22 10:49

    OH!! But I thought getting paid for doing EFFALL is the ANC's mantra...

  • peter.ndamase - 2012-08-22 10:51

    Not that soon Mantashe, I still need a govment contract.

      Rob.Trianglem - 2012-08-22 11:19

      LOL Peter!!!

      aristar.aristary - 2012-08-23 10:38

      I am going to change my name to Jacoba Zoomer. Maybe I can get some of his ill-gotten gains.

  • pieter0827006294 - 2012-08-22 10:52

    At least he admits the incompetence of most tender businesses.

  • wisani.mathonsi1 - 2012-08-22 10:58

    Sit down gwede.. I have serious problem with you and zuma.

  • barry.ahern.3 - 2012-08-22 11:00

    The way forward is education. Right man for the right job. No politically motivated position appointments because governemnt will financially reward your company for it. Educate people, and make them worthy of the position. BEE has not worked, it has led to having to employ uneducated people for positions and hiring 2 or 3 people to do the same job because of how inefficient it is. You tried it, it hasnt worked, so rethink it, and try again with something else. As they saying goes, you cant try the same thing over and over and expect the same results.

      cox.mitch - 2012-08-23 21:35

      Sounds exactly like our education system: the old 'Apartheid' system worked well, but our government wants nothing to do with anything 'old' so they update the system every year trying to get it right! It's been proven around the world that our current system(s) don't work - so go back to the original system and stop reprinting textbooks! And for the record, a teacher (who is more important to our economy/planet in the long run IMO) gets paid less than those striking mine workers...

  • Zimbobwe - 2012-08-22 11:01

    The problem with BEE is the tenderpreneurs wants to look and be seen like the ANC cabinet miniters driving flashy cars and showing. When they go to the ANC lekgotla they want to be seen as someone important with a Range Rover or X5, drinking JWB hence the ripping off.

  • Matamba - 2012-08-22 11:05

    same here, I dont see the point of it.

  • johan.giliomee - 2012-08-22 11:07

    As per Mr Gwede Mantashe own words (as I userstand it): “To build a school with black builders for black children currently cost R 20m.” “The cost to build a school, using raceless builders, cost R 5m to R 10m.” You would think the solution would be to use a raceless builder, epecially with black kids in mind. Can anyone please help me understand this?

      phillip.cwazibe - 2012-08-23 07:22

      The difference buys a house in Sandton, Range Rover, Merc e350, Nokia cell, long and pointed shoes. Can add a flight to some destination and don't pay workers. That is the maths. - 2012-08-23 17:16

      goes to show how thick the eye flaps on these 2nd rate politicians are!!! They cannot even see the obvious. I wonder what they would say about.... "1+1 =2"..... But is was a white dude that developed the equation All this is getting boring and really stupid now. Get on with building SA, or get out of the way!!!! (without colour please)

  • - 2012-08-22 11:08

    Mr Mantashe it works like this: A service provider for a task is sought. Company A (BEE compliant etc) gets the contract but cannot actually do the job. It subcontracts Company B (not compliant but experienced in the field) to do the job. Result: a. Job gets done but costs much more than it should; b. Company B gets no experience and owners get used to getting something for nothing.

      wo0two0t - 2012-08-22 13:14

      So true - My ma worked for a company like "Company B" where a BEE company getting government contracts would sub contract work to this white company then smack huge profits on for themselves with no actual work done - what a waste of public money just because the ANC insist on BEE.

  • - 2012-08-22 11:11

    Mr Mantashe, the government-built school costs more because of all the red-tape re. contractors, tenders etc etc. The private school is planned and constructed according to business principles. Do you see what will happen to the mining industry if it is nationalised?

  • alan.gernet - 2012-08-22 11:14

    What he says is absolutely true. At great cost to the country, tenders are awarded to people who are often not competent to produce. At the end of the day, the products have to be remade or re-designed. This takes tax money away from spending in areas, where it is most needed. In our industry, we see this all the time, where contracts given to incompetent firms cause the Govt. to pay twice for an effctive product. So once again - education is the key! BEE is great for the select few individuals who benefit from it, but it doesnt work as a policy because they cannot generally supply value for money. The country as a whole does not benefit from BEE, and sadly, the poorest people suffer the most from it.

  • - 2012-08-22 11:15

    Mr Mantashe, it is a BS principle to try to use the "tick boxes" approach when you draft your CEO (and senior appointments in government etc) bucket list. Race or gender should not be a determinant at all. Get the best person for the job. Ill-equipped managers will appoint ill-equipped staff. The old story: the fish rots from the head.

  • larry.piggott1 - 2012-08-22 11:16

    I have had serious issues with it since its inception. Get rid of it and while you are at it, get rid of Cadre deployment.

  • chiepner - 2012-08-22 11:19

    The only real people that ever benifitted from BEE is politicians, their families and people conected to them. Which makes one wonder?

  • marc.hugo.75 - 2012-08-22 11:25

    He has a few issues with BEE. Well, most business people (the wheels of the economy) have an issue with BEE even existing. The economy will never be unleashed to reach its potential while the meddlesome laws of leftist politics keep it back. Government should keep their noses out of business or it will just disappear.

  • Rob Allen - 2012-08-22 11:29

    sounds about right to me, enough silver spoon for blacks. Time to compete in the real world. Best person / company for the job no more racism!

  • ashne.segal - 2012-08-22 11:39

    Has he only woken up now - could've told him that 20 years ago! This country will be better off without BEE.

  • jos.badimo - 2012-08-22 11:54

    Mr Mantashe, the problem is not BEE. The problem is cadre deployment, cronysm, giving work to friends, family members, girlfriends and politically connected people.

  • joe.peters.56 - 2012-08-22 12:01

    Vote DA

  • jwdupreez - 2012-08-22 12:12

    BEE is only there to spread the profit - thus creating "armchair" business enrepeneurs = Let the boss do the work and they will watch from a distance. No new jobs = No growth in the economy = No future

  • lutan.dasitraw - 2012-08-22 13:00

    So if SA is a "democracy" (meaning that all citizens have a say in the country's decisions), yet all the comments on this story shows a total disdain for BBE, then it raises the question of whether SA citizens really have any say in the decisions made in their country, and if there's no say in these decisions, then is SA really a democracy (as per definition of the concept)? The ANC was elected by SA citizens to govern the country on behalf of the citizens to whom the country belongs, but they act more like kings owning the country, than like servants of the people (which is after all what they really are). It seems like if the ANC government would just start listening to their masters (the SA public), then this country has a golden future ahead of it. If not, then I sure hope that at some stage another government that would listen will be put in place (hopefully before it's too late, and before this government has totally drained South Africa of all her beauty).

  • vasee.pillay - 2012-08-22 13:04

    Scrap BEE and AA as these are racist policies.We had white apatheid and now we have black racism.When is this racist legislation going to end as it is affecting the minorities.The ANC asks why the minorities do not support the ANC. Easy because the govt. practices these racist laws through legislation and they expect us to accept it.Its like cutting ones nose to spite their face. How could the ANC expect support from minorities when they are discriminated with.Tell us how long would it take to scrap this legislation.

      ld.vanvuuren - 2012-08-22 18:06

      What will come in place of tenders? If I may make a suggestion Mr Mantashe: Get an outside panel of specialists and locals to form a "jury" on a tender by tender basis (pay them for their time) and retain the scoring system as is. But if you want to save the Country from financial ruin, scrap BEE as it is - rather focus your BEE on what transfer of skills is happening. I will give you 100 to 1 odds that you will solve they jobs crisis much faster.

  • etienne.holder - 2012-08-22 13:43

    This is a positive step for a change, let's hope it's implimented and not just the usual "Lip service"

  • jan.vanriebeeck.73 - 2012-08-22 13:45

    "Afrikaner capital, after 40 years in power,... they couldn't produce a single CEO of mining, not one." There is a specific reason for this. If Afrikaner's ran and owned the mines in South Africa the wealth could not be stolen by the british. As long as the British controlled the mines they controlled the purse strings, and by proxy, of the whole country. People were quick to call the Afrikaners the oppressors, the ones who took all the money from everybody but what everybody forgets is that the Afrikaner NEVER posted his money overseas. With the brit the money worked for the betterment of england, for the Afrikaner the money worked for the betterment of South Africa. We can argue all day about the value the Afrikaner brought to SA, but the gave a damn site more than the british thieves did.

      jaco.fridaystreet - 2012-08-22 14:41

      Mantashe is not entirely correct in his statement that "Afrikaner capital, after 40 years in power,... they couldn't produce a single CEO of mining, not one." He should make an effort to study and understand the history of federal Mynbou which amalgamated with General Mining and then became a major Afrikaner held and managed mining house. Then followed the well-known take over of Union Corporation which was then merged into General Mining in 1980 to become Gencor Ltd the latter the forerunner of BHP Billiton now a major international mining conglomorate. One would expect that someone like Mantashe would be on top of facts before he makes silly & unfounded statements such as this. But then again, he's just being true to style not averse to untruths to prove his at times dubious point.

      hannesenbrianda - 2012-08-24 03:45

      Gencor had Tom de Beer at its helm in the 1980. Sasol Mining had many different CEO's including Paul Kruger. Today there is Marius Klopper at the helm of the biggest mining company in the world. Afrikaners have since the 1980's played a major role in mining companies. What is true if to remember that many Afrikaner famalies had to lift themselves up from poverty. Only one of my grandparents completed school. Everyone in my parent's generation completed school, but none of them went to University. My brother were the first in my extended family to complete a degree. Half of the children in myh extended family graduate and now we have three with Master degrees that are at the level where they can compete with families that produced graduates and executives for generations. It takes time to produce top leaders as you first have to provide the environment for them to grow up and get the appropriate education.

  • rob.bayliss.94 - 2012-08-22 17:12

    Such comments are nothing more than insincere window dressing. The anc is the architect of BEE/AA in SA. I cannot doubt that it has been highly succesful from a particular perspective and it is surely not worth discussing whether or not the beneficiaries in the anc did not expect it to benefit them. So much political posturing leading up to 2014.

  • SarelJBotha - 2012-08-22 18:45

    Mantashe, wake up. BBEEE does no-one favours. Let the free market and the people who use services decide what and who they want. Companies who then loose customers will either change by themselves or close up shop. It is a simple thing that you lot in the ANC is missing completely.

  • - 2012-08-22 18:49

    If you do not have Level 4 they will prefer to import Millions from China through some level 4 front and the result is no jobs for our workers and the money goes to China. The so called carbon imprint is ignored the- green thing is also just a money scam

  • aiazmir - 2012-08-22 21:18

    Mantashe ought to have several problems with BEE, but he (or the media) focus on but one and that is in procurement, i.e. the beneficiaries of procurement. The beneficiaries of procurement should be the the procurer. When the supplier artificially benefits then the the system is "skewed". That is why BEE is does not work. It drives up the costs of beneficiation.

  • gerhard.minnaar.716 - 2012-08-23 01:42

    Wow Mr. Mantashe! I can believe I'm saying this but I agree with you.

  • - 2012-08-23 03:58

    seems.ike this guy(Mantashe) is the same as the rest......all about the past...nothing about the future. again, second rate politicians dwell on the past to hide their lack of ability BTW...who is the CEO of BHP Bill?

  • cynthia.potgieter.7 - 2012-08-23 07:22

    Seems everyting that the government cannot deliver to its people they are dumping into the hands of mining in SA. PSS.....Sipho Nkosi is actually the CEO of Exarro Coal, and not Xstrata, and the President of the Chamber of Mines.

  • - 2012-08-23 10:02

    Black Economic Empowerment is pure racism. So much for equality for all South Africans. In this instance it is for a select few.

  • aristar.aristary - 2012-08-23 10:35

    I too have serious issues with BEE. It is a blatant racist process which benefits only one race. The Zuma race. I will not even acknowledge any racist system. I didn't acknowledge the Apartheid system and I, as sure as hell, will not acknowledge the ANC's BEE or AA system. I work hard for money and I will not allow some stupid halfwit to tell me I have to GIVE it to them. They can work for it, the same way as I do.

  • cristina.salva.7 - 2012-08-23 11:27

    Get rid of it once and for all!!!!

  • dawie.coetzee.52 - 2012-08-23 12:49

    The primary real problem with BEE is that it affirms a discredited model of oligopolistic corporatism: it is no use trying more equitably to slice up a cake which increasingly resists slicing of any kind. We need to bake a new cake, one which slices as easily as possible into the thinnest possible - and therefore most numerous - slices. In other words, we do not need more black CEOs but fewer CEOs overall, and more owner-enthusiast-operators of independent small businesses, of any and all colours.

  • evan.erwee - 2012-08-23 13:28

    The debate is not if BEE failed the world know that: The challenge is what to do next. Why keep on stating the obvious when there is work to be done. Why make excuses (Many comments). We can look at other companies but the key here is education, hard work and a bit of luck. I’m also to blame in a way and in some other sense not. I left South Africa to work and educate another country’s people. I started at the bottom and worked my way to the top (education and hard work). I’m not to blame because many South Africans refuse to see the plan of tomorrow and just focus on yesterday and apartheid. I suggest we start at the government and government businesses. Show the people of South Africa how a business should operate and start where we have the most visibility, the government. Until then, nothing will really change for the better.

  • waiszee.sing - 2012-08-23 14:04


  • nadineelvina.francis - 2012-08-23 15:15

    Ha!Mr Mantashe so now your stomach is full, after years of being on the gravy train, so now the others must stop stealing. HE He He....Mantashe knows how tenders work .....all the friends a family of the minister's supplying the tenders must be given a back hand... that why it cost's so much more.

  • - 2012-08-23 15:51

    Seems like this guy(Mantashe) is the same as the rest......all about the past...nothing about the future. Why suddenly the past again...? so the Afrikaner never produced a mining CEO....maybe because they were busy with the heart transplant....or developing world class weapons and the list goes on.... BTW...who is the CEO of BHP Bill? Again, another second rate politician that dwell on the past to hide his lack of ability.

      J.Stephen.Whiteley - 2012-08-23 17:25

      Or, if Mantashe goes back, W B Coetzer?

  • James.A.Green - 2012-08-24 08:03

    BEE has good roots in it. While some and many of you will claim it to be racist, when it was made aphartheid had only just ended and the effects still very prevalent. It's never been about race, it's been about trying to uplift those that were held back by laws and pushed into a lower bracket with little to claw their way out. This was for probably 99% of non white people out there. \r\n\r\nThe problem comes in not in the principles of BEE, but in that not enough jobs are firstly created for the entire South African population: if we had enough, no one would feel as edgey about this as ultimately we would all be employed well enough \r\n\r\nSecond problem is, is that currently BEE has benefitted only a small proportion of the community it was targeted to, just making the rich, richer \r\n\r\nThirdly, it goes to what Gwede has been saying here. We have missed the point and become bogged down by layers and layers of trying to fit into legislative provisions \r\n\r\nI agree with so much that Gwede has said here and it is so refreshing for someone of his postition to actually admit what we all think. He sees there's a fundamental problem and wants to fix it. No one wants schools to be 4 times there price, where that extra spending could go to what it was supposed to, namely education \r\n\r\nHe knows we can't keep spending money at tenders which ultimately do not produce what they promised but were chosen for BEE credentials (btw, it was a brilliant stab at Julius Malema his comment on the bridge) \r\n\r\nHe wants us to have more focus on actually learning, to garner experience to create better business, and THAT is what BEE should be about. It's the only way we'll seriously gain growth in this economy to have these jobs we need

      ghi.mmn - 2012-10-02 23:07

      Wrong. BEE is only about racism. You cannot get good fruit from a bad tree.

  • joanita.hilton - 2012-10-03 09:10

    First bit of sense I have read in a long long time!

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