SA's transformation dream still in the pipeline

Johannesburg – Although South Africa has come a long way since 1994 in reducing poverty, improving access to basic services and creating and growing the black middle class, economic transformation is still lacking.

This is according to Deputy Finance Minister Mcebisi Jonas, who was speaking at the Association of Black Securities and Investment Professionals (Absip) Financial Services Conference, held in Sandton on Tuesday. 

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“We have not deracialised the ownership of the economy. Higher social returns accrued to those with capital and skills,” said Jonas. The poor level of education and training levels have not helped either.

The white population accounts for 68.9% of top management positions, however, their share of economic participation is at 10%, he explained. The black population in SA, which is at 77%, only occupy 14.3% of top management positions.

He added that it is important to have active citizens and to shape public opinion. “If public opinion is weak, then democracy will be undermined quickly.”

'Financial sector refuses to transform'

ANC official and former economic development minister Enoch Godongwana added that the financial sector is one that “refuses” to transform. When the financial charter was published in 2004, it had momentum and focus on transformation, which lasted until 2007, he said.

Voluntary transformation is not taking place in the sector. “What you see is regulatory. We are reluctant to see that,” said Godongwana.

He challenged delegates to champion the narrative. “We must have a serious conversation. The financial sector will be the next sector that is targeted unless you ‘jack up’.”

Managing BBBEE

Former finance minister and deputy chair of Rothschild, Trevor Manuel, was also a speaker. He said that empowerment is necessary in South Africa to reverse the injustices of the past.

The three priority elements of the Broad-Based Black Economic Empowerment (BBBEE) scorecard, namely ownership, skills development and enterprise development, fall short in some ways. Ownership seems easier to attain and can be implemented "unintrusively". However, empowerment shares are made available at discounted rates. This diminishes their value. The people most affected are pensioners, the majority of whom are black South Africans who are poorer with each discount. 

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“Skills development is marked by slow progress,” he said. We have a situation where the talent pool for skills in the financial sector is particularly shallow and this results in a mismatch of skills for the requirements of the economy.

The targeted 40 points in enterprise and supplier development is also difficult to attain, Manuel said. "Suppliers are in need of genuine support". 

Honesty is key to deal with injustices using BBBEE, he said. This is part of a constitutional responsibility to improve the inclusiveness of the economy.