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Is BEE creating criminals?

ONE of the purposes of black empowerment is “to ensure broader and meaningful participation in the economy by black people to achieve sustainable development and prosperity”.

The above passage is from the South Africa Black Economic Empowerment (BEE) Commission report produced by the commission, established under the auspices of the Black Business Council, an umbrella body representing about 11 black business organisations. The establishment of the council was one of the primary and significant events that led to the promulgation and eventual passing of the Broad Based Black Economic Empowerment Act.
None other than Cyril Ramaphosa, one of the foremost black business leaders, led the commission. With the risk of being accused of heaping praise on Ramaphosa, he has emerged as one of the very few black business leaders who had a complete understanding of the purpose of black empowerment: that is, ensuring meaningful participation of blacks in the economy and most importantly creating sustainable business, development and prosperity.
For the past few weeks those of us who aspire to and subscribe to the original tenets of black economic empowerment have endured loads of embarrassment, shame and disgrace with several cases of black economic (mis)empowerment.
It is not the purpose of this article to discuss, at length, the merits and/or demerits of the clearly undesirable conduct giving BEE the bad name that it has today. Rather than the “usual” criticism of the behaviour of the so-called BEE entrepreneurs the spotlight for me shifts to government.
The successive governments of the African National Congress (of which I am a member) have wittingly and unwittingly created a fertile ground for making criminals of law abiding black business people and civil servants (most of whom are prominent and senior members of the organisation).
Undisputedly government procurement has been the root cause of many of the troubles besetting the so-called tenderpreneurs. Party loyalty, cronyism and sycophancy has all but taken government procurement from legitimate black business people –– and potentially long term sustainable black business –– to speculators, brokers and other overnight “millionaires”.
Today you do not need the guts, resilience, informed risk taking and calculation to make it in business. All you need is a membership card of the African National Congress, its youth league, women’s league and the like to access lucrative government procurement contracts. Forget knowledge of the industry, skills, experience and business acumen because they surely will not assist your cause unless you know a comrade in high places who will, for a cut of the loot, deliver the tender to you.
This system is all but destroying legitimate black business run by people who are entrepreneurs and who are concerned about sustainability of their businesses which, in turn, contribute to the economy in the form of sustainable employment and taxes (the source of the loot in the first place). The former aspect of the contribution, employment, should in all likelihood be welcomed by a government beset with a huge unemployment problem amongst the very same black people it originally sought to empower by BEE.
The South African government seems to be oblivious to the damage it is doing in this regard and also the opportunities it is losing by it. Firstly, by sidelining credible entrepreneurs in favour of the so called BEE’s it is effectively sabotaging its own policies especially with regard to the long term sustainability of black business, and reversing the economic disparity between the previously advantaged and the previously disadvantaged,
Secondly, the South African government is missing a massive opportunity to rope in whoever benefits from its BEE policies (including the self-same so-called BEE’s) in its fight against unemployment. Government should be using the so-called BEE scorecards not only to force white business to do a box ticking exercise, including instances of fronting, but also to hold black business accountable.
I find it a very serious problem that black business, more particularly the so called BEE’s or tenderpreneurs, are just handed huge amounts of monies in the form of procurement and other opportunities without being held accountable in assisting national projects, including the reduction of unemployment.
Since most of the so called BEE beneficiaries are either members or supporters of the African National Congress I am sure they would not mind if government were to insist for example that, they employ other people, with a minimum number prescribed for companies bidding for state tenders and opportunities above a particular threshold; that sustainability of the bidding entity be one of the primary requirements for securing certain state tenders and opportunities; and that companies who are bidding for certain state tenders and opportunities be required to adopt projects in rural and poor communities including bursary funds, contributing to community development initiatives etc.
The above, are but some of the suggestions that could be incorporated into the BEE requirements for black-owned businesses seeking to benefit from state opportunities. Not only will this help reduce unemployment and reduce poverty but it will assist in creating sustainable and vision inspired black enterprises that would, in the long run, rival white companies. The system as it is today is promoting corruption, fraud, conspicuous and vile consumerism as evidenced by the past week’s headline grabbing stories.
The concept of cadre deployment is noble and essential, especially at this juncture of the development of South Africa and its economy. It is a fallacy and disingenuous for the opposition and other pundits to cry foul over the policy. In fact every political party in South Africa is doing it including the Democratic Alliance, which has come out as its fiercest critic.
The ANC has every right to deploy its cadres in senior government positions and other strategic places. In fact it would be suicidal for it to do otherwise. The biggest problem is not cadre deployment but rather what I prefer to call “cadre misdeployment”. Cadre misdeployment is when you take a clueless, skill-less, inexperienced and at times semi-literate person party member, who is close to the guys in the organisation calling the shots, and place them in a position where he is or will be clearly out of his depth.
There are many examples in state-owned enterprises and their boards of directors, senior management in government, municipalities and even in South African Parliament. The result has been system failures, wasted state resources, tenders allocated to the “masters” who deployed the cadres, outright theft, shady golden handshakes, corruption, fraud and all other shenanigans that have only served to embarrass the ANC and make a case for criticism of cadre deployment.
The factional nature of the politics in the ANC are chiefly responsible. Capable and educated (not necessarily academically certificated –– although academic certification is crucial) cadres of the ANC who would on merit deserve deployment are sidelined and overlooked for incompetent cronies, who in turn embarrass the party when they steal or cannot deliver.
Cadre deployment could be a powerful weapon on the part of the ANC government to deliver on its electoral promises if it deployed capable cadres and not cronies and/or sycophants.

The one aspect which is a potentially self-sabotaging weapon of mass destruction for the ANC government is the way it has been treating the youth and more particularly members of its youth wing, of which I am a member, as well as their cronies and hanger ons.
Not only is the current leadership of the ANC helping in the destruction of future black leaders by allowing for an environment where black youth are having millions of rands thrown at them to insult fellow leaders and opposition party leaders, but they are also effectively encouraging semi-literacy and corner cutting.
The phenomenon has effectively overrun the current ANC leadership: no one is willing, able or even capable of reining in the youth.
They are equals, they know all and cannot be taught because the lesson being taught in the organisation is to chase as much money (read tenders) as you can and show a middle finger to education, respect and values.
They are effectively being taught that having money (irrespective of the nefarious means through which you may have acquired it) beat respecting your elders and getting an education.
When statistics are realised about the high dropout rate of black students only financial exclusion is cited. Other conventional reasons, including tenderpreneurship, are not mentioned despite the fact that they also contribute.
The logic is: go to an institution of higher learning, join the ANC Youth League, lead strikes and inform the management.
Then a senior comrade in government will hear of you and recruit you to “empower” you or you will be awarded a position in one of the state agencies or entities after which you will “go into business”.
As things currently stand we have a lot of youth tenderpreneurs who have replaced proper role models and are nothing but glorified state parasites.
The time has arrived for the ANC government to go back to the drawing board and demand its socio-economic pound of flesh from the so-called BEE’s and tenderpreneurs “to ensure broader and meaningful participation in the economy by black people to achieve sustainable development and prosperity”.

Nkhwashu is a member of South Africa’s African National Congress and its youth wing and CEO of Empowerment Dynamics Consulting based in Pretoria. –– www.politicsweb.co.za

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