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Cape Town - Professor Mthuli Ncube of the African Development Bank (AfDB) has slammed black economic empowerment (BEE), saying it is not creating any value.
“I’ve looked at all BEE deals up till about 2009. I studied them all to check if they created value. It’s quite clear when you look at shareholder value creation, BEE has not created shareholder value.
"Absolutely not. And the proof is there for anyone who wants it.”
Ncube was speaking at an event hosted by Investec on the sidelines of the World Economic Forum’s Meeting on Africa in Cape Town.
He added that everyone has bought into BEE as a way of social economic transformation, but said that this was not enough.
“The (problem is) construction of the model is more about sharing what already exists. The cake that exists, let’s see how we can share it as opposed to creating an additional cake,” Ncube said.
He says the entrepreneurship element needed in BEE is missing.
“Why we don’t see a spawning of new entrepreneurs (in South Africa)? The next step should be more towards how do we create more entrepreneurs, creating a new cake. That’s where it (BEE) needs to go, that’s my view.”
'An obstacle to trade which blocks investment'
Ncube's comments follow on sentiments expressed earlier this week by Africa’s richest man, Nigerian billionaire Aliko Dangote.
Dangote, who is also the world’s 43d richest person according to Forbes magazine, lashed South Africa’s BEE programme, calling it an “obstacle to intercontinental trade" and insisting it "blocks investment into South Africa”.
"In Nigeria, we had these laws demanding that any (foreign) investor had to have a Nigerian partner. But that just dried up the capital flows. Now anyone can do business with anyone in Nigeria," Dangote told Business Day.
He said South Africa’s BEE laws and policies should be reviewed to attract more investment from Africa to South Africa, and to encourage all Africans to participate in South Africa’s economy.
- Fin24
*Follow James-Brent Styan on Twitter at @jamesstyan.
“I’ve looked at all BEE deals up till about 2009. I studied them all to check if they created value. It’s quite clear when you look at shareholder value creation, BEE has not created shareholder value.
"Absolutely not. And the proof is there for anyone who wants it.”
Ncube was speaking at an event hosted by Investec on the sidelines of the World Economic Forum’s Meeting on Africa in Cape Town.
He added that everyone has bought into BEE as a way of social economic transformation, but said that this was not enough.
“The (problem is) construction of the model is more about sharing what already exists. The cake that exists, let’s see how we can share it as opposed to creating an additional cake,” Ncube said.
He says the entrepreneurship element needed in BEE is missing.
“Why we don’t see a spawning of new entrepreneurs (in South Africa)? The next step should be more towards how do we create more entrepreneurs, creating a new cake. That’s where it (BEE) needs to go, that’s my view.”
'An obstacle to trade which blocks investment'
Ncube's comments follow on sentiments expressed earlier this week by Africa’s richest man, Nigerian billionaire Aliko Dangote.
Dangote, who is also the world’s 43d richest person according to Forbes magazine, lashed South Africa’s BEE programme, calling it an “obstacle to intercontinental trade" and insisting it "blocks investment into South Africa”.
"In Nigeria, we had these laws demanding that any (foreign) investor had to have a Nigerian partner. But that just dried up the capital flows. Now anyone can do business with anyone in Nigeria," Dangote told Business Day.
He said South Africa’s BEE laws and policies should be reviewed to attract more investment from Africa to South Africa, and to encourage all Africans to participate in South Africa’s economy.
- Fin24
*Follow James-Brent Styan on Twitter at @jamesstyan.
