Wednesday, 18th October 2023

Dear <<First Name>>

During the New SA’s infancy, I publicly crossed swords with many (white) leaders leaders of Corporate South Africa over their approach to the major topic of the time - Black Economic Empowerment.

My view was that history had provided the business sector with a unique opportunity to create a massive population upliftment programme. After seeing it with my own eyes, I urged to local adoption of Jamsetji Tata’s century old model, where the founder of India’s biggest company structured its ownership and dividend flow to benefit the masses of society. With an enormously positive result.

Regrettably, SA’s unelected custodians of shareholder assets chose a very different path, opting to endow extreme wealth upon a select few. Their argument: black South Africans needed ‘role models’. Additionally, they said shareholders would benefit as this carefully selected elite would be “influential” with the new ANC government.

The unintended consequences were forseeable. Better-informed beneficiaries such as Mzi Khumalo amassed fortunes by hoovering up shares from their black fellows at a fraction of true value. Even easier wealth flowed to ANC heavyweights like Cyril Ramaphosa and Tokyo Sexwale, gifted billions via corporate share option grants.

An even bigger tragedy is the way this feeding-at-the-trough culture was embedded into SA society. It has now mutated into something truly sinister, where the country’s assets have become fair game for the enriched elite - and, Russian-style, their wealth dispensing power encourages local oligarchs to act against the national interest.

Back behind his keyboard after a short break, our tribe’s favourite columnist, RW Johnson, tackles the subject (below) with the vigour of a refreshed missionary. Forthright as ever, he drives a bulldozer through the SACP/ANC and Corporate SA’s carefully crafted ‘role model’ narrative. Exposing the horror for what it truly is.

Roll on 2024.        

Sterkte.
Alec

RW Johnson: Are there really too few black billionaires?

By RW Johnson  

Not long ago the prominent black businessman, Reuel Khoza (above) launched a tirade against the government on the interesting ground that there are too few black billionaires. He claimed that the “densest concentration” of billionaires was in Stellenbosch (a way of saying that they are white Afrikaners). “It is not by accident. It is absolutely by design. They laid the foundation legislatively; they meant business.” 

Khoza continued “To produce something like two, three or four but fewer than ten billionaires in almost thirty years – it cannot be justified.” Khoza felt that far more radical legislation was needed on this subject, for he characterised current legislation as “limp-wristed”.

At the same time the economist, Duma Gqubele claimed that BEE had failed because none of the top 50 companies on the JSE are black-owned. 

Quite clearly there is a major push from black businessmen with this view. Already, when President, Jacob Zuma responded to this by setting up a programme to create “100 black industrialists – and put government money behind it. Government money was certainly spent but no such industrialists have emerged. 

 One of the great South Africa ironies is that the ANC continues to attack inequality as “the heritage of apartheid”, when in fact inequality has increased quite strongly under ANC rule. And let us be frank about this, the demand for “100 black industrialists”, for more black billionaires  or more black owners of top 50 companies is an unashamed demand for greater and greater inequality. 

When the ANC first came to power we heard a great deal more about how change was needed to assist the working class and the poor. One can never forget the ANC poster of 1994 which simply read “Jobs, jobs, jobs”. In fact the ANC has presided over de-industrialisation and a more than tripling of unemployment. The chief victims of ANC policy have been the poor and the unemployed. 

One should note at the outset that Khoza is simply wrong in what he says.  Was there really any law put on the books under National Party rule which explicitly favoured Afrikaner business ? I know of none. Anton Rupert always said that the last thing business needed was government help. Certainly, if you read Eben Domisse’s biography of Rupert you can see that he certainly never received government help. And nor did Anton’s son, Johann.  Indeed, did any of the wealthy men of Stellenbosch receive government assistance ?

The fact is that the National Party came to power promising to end the “poor white problem” And it did stick largely to that emphasis. It believed, correctly, that the way to end such poverty was to ensure such people got jobs. By the end of National Party rule there were very few poor whites, but this was largely due to South Africa’s rapid economic growth in that period and, to a lesser extent, job reservation. 

Anyone who looks rationally at the state of South Africa today would not say that the need to create more very rich people (of any colour) should be a government priority – or even a government aim at all.

The fact is that the ANC tried, like any nationalist party, to weld together an all-class coalition representing, as it were, the black nation. It is no accident that demands such as Khoza’s were not heard in the early years of ANC rule, for there were few black businessmen then. And, indeed, most of the black businessmen who have emerged owe their rise either to BEE or, like Khoza and Ramaphosa, have earned good money by serving on the boards of white-owned companies. 

Effectively, this “good money” which the new black business class draws is a rent created by government policy. It is thus a rentier bourgeoisie and Khoza says that this is not enough. It is “limp-wristed”. For what Khoza wants is to own businesses, not just sit on their boards. And since he hasn’t the capital to buy a big company he wants the government to legislate so that he – or people like him - just get given one.

This is a fairly astonishing demand, just as the demand for more and more inequality is, given the state of South Africa, utterly breath-taking. But the fact that such demands can be made at all is testimony to the fact that the balance within the ANC coalition has shifted. In the early days of the ANC government all the talk was of helping the poor, of building more RDP houses, of making sure that more and more of the underprivileged enjoyed piped water and the benefits of electrification. There was, at first, little talk of BEE. 

But how the balance has shifted ! Nobody talks of building more RDP houses now and we all know what has happened to the supplies of clean water and electricity. But every politician is keen to get his or her hands on tenders, on procurement, on government contracts of every kind. Everywhere and all the time we hear cries for more BEE. for the “transformation” of the financial sector or the oil and gas sector or the renewable energy sector.

To some extent this shift in emphasis was inevitable. The ANC needs money with which to run its organization, to finance election campaigns and in general to grease the wheels of government. The poor and unemployed are unable to help much, if at all, but the new breed of tenderpreneurs can reward the politicians who push business their way. The classic case is the wealthy class of black coal mine owners who play a major role in financing the ANC in return for which politicians like Gwede Mantashe do their best to sabotage the renewable energy sector.

It took an old communist like Ben Turok to put a name to what was happening. Not long before his death in 2019 Ben rather angrily pointed out that while the ANC had always said it would help black businessmen in the same way that it helped black trade unionists, black farmers and other elements of the national coalition, nobody had ever argued that black businessmen should become “the hegemonic class” within that coalition. And yet this, Turok, continued, was pretty much what had happened.

This, it should be realised, is fighting talk. The National Democratic Revolution is, after all, supposed to evolve in a progressively socialist direction. But if Turok is right – and he does appear to be – then the socialist revolution is being progressively betrayed as the now hegemonic BEE section of the ANC’s coalition calls the shots more and more. What is now in prospect is an ANC led by the nose by its most capitalist elements. 

Thabo Mbeki is very much prone to warn of the dangers of counter-revolution, by which he seems to mean that the DA and its allies might come to power. In fact provided political change takes place by democratic means no one can really object. But to see the ANC’s pro-poor alliance turned round into a billionaire’s charter by an increasingly dominant BEE faction is more or less a text book counter-revolution. It is very difficult to see how the SACP and Cosatu could possibly stomach this. 

But notions of right and left may not fully describe what is happening.  Already there are elements within the SACP and Cosatu which have more than made their peace with the BEE interest, while the EFF, though notionally to the Left of the ANC, is second to none in its embrace of tenderpreneurship. Already under Zuma we saw how easily corrupt business interests could co-exist quite comfortably with “radical economic transformation” radicals. There is a tendency to cast Zuma and his crowd as part of the “bad old days” but they could, instead, be pointing to an uncomfortable future.