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Govt cannot bail on more vulnerable black business during crisis - Commissioner

May 06 2020 18:19
Khulekani Magubane, Fin24

Government cannot abandon black businesses in the midst of the coronavirus pandemic, as their past systematic exclusion made them more vulnerable to the outbreak's impact on the economy, Broad-Based Black Economic Empowerment Commissioner Zodwa Ntuli has said.

Her remarks come after Minister of Finance Tito Mboweni told a parliamentary meeting that government had a responsibility to support businesses regardless of the race of their owners during the pandemic. Union Solidarity has lodged a court battle against a determination by the Department of Tourism stipulating that black-owned tourism businesses should be at the top of the pecking ordered when it came to financial assistance that government would offer to soften the blow to the sector.

Speaking during a webinar on Wednesday, Ntuli said the Covid-19 novel had exposed the inequality that exists in the South African economy, especially when it came to patterns of ownership.

"It will affect every sector of the economy, the black businesses in the economy will be affected even more," she said, adding that empowerment doesn't exclude white businesses.

"It serves to include black people. If you look at the eight compliance levels, you can still access opportunities, even if you are 10% empowered. How is that not inclusive?"

Managing director of Black Lite Ajay Lalu said government could not turn its backs on black-owned businesses during the pandemic, in terms of procurement or support as the BBBEE Act explicitly says that when government enters into any economic activity be it procurement of goods or services, incentives or partnerships, it legally has to apply empowerment credentials as one of the criteria.

"The impact of Apartheid on black capital needs to be considered when we are trying to level the playing field. The law in this regard is absolutely clear. Many companies have had years to comply with BB-BEE legislation, so why are they crying foul now?" asked Lalu.

Lalu said the markets were likely misinterpreting the spirit of Mboweni's remarks.

"I think the market is misinterpreting his comments again. You don't have to allocate all your relief initiatives based on race. That also does not mean that the majority of your relief should not be earmarked for black and black women-owned businesses. Race is not the exclusive criteria, but it does not mean it must be excluded as a criterion either," Lalu said.

He said it remained an indictment on South African society that 25 years into democracy, the South African economy still did not see significant shifts in the patterns of ownership of productive capacity.

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