Business has failed to fully embrace the transformation agenda aimed at the economic inclusion of poverty-stricken black South Africans in the post-apartheid era.
This was the sentiment expressed by Business Leadership SA (BLSA) CEO Busisiwe Mavuso as a panellist during a Gordon Institute of Business Science event last week.
There has been much debate about the private sector’s role in the transformation of the economic structure of the country in the past 31 years of democracy. The government, through its transformation agenda, aims to tackle the economic inequality introduced by the apartheid government’s racist laws, which prevented Africans from having the same economic prospects as whites.
“When I look at how far we have come on transformation, we created a few billionaires but we are still sitting with a society that is vastly untransformed,” Mavuso said.
“We have not painted ourselves [business] in glory. We still have institutions which look like outposts of Europe, especially when you look at top echelons and the C-suite of business [top executive management] or the numbers as far as the commission of employment is concerned.
“We were sitting at about 12.5% black African executives in the C-suite. Years later, we are sitting at about 26% and moving at this pace we are not going to be able to achieve transformation to the levels that we actually like.”
Several government policies aimed at transformation are now being challenged in the courts by the private sector and the DA.
The government also faces pushback against the proposed R100bn Transformation Fund for investment in black-owned enterprises; the Expropriation Act, which defines whether privately owned land can be seized for the public good without compensation; broad-based BEE (BBBEE) laws; and the Employment Equity Amendment Act.
Mavuso said there were companies that contributed to transformation but there were also those that were anti-transformation.
As businesses, what we need to understand is that in supporting transformation, we are investing in future markets.
— Busisiwe Mavuso
Business Leadership SA
“There are businesses in this country that are so arrogant that they actually budget for the penalties to say they will not be compliant with transformation.
“If they are not doing the right thing 30 years into democracy, surely you have to use some force. I’m not a proponent of overregulation and hard measures put on business, but I really think it is for the good of the citizens of this country [to change] the structure. We are not doing enough; we should be doing more.”
Having more black people participating in the economy is a key factor to economic growth, Mavuso said.
According to Stats SA the country’s GDP grew 0.6% in 2024 compared with 2023.
“As businesses, what we need to understand is that in supporting transformation, we are investing in future markets. In terms of the GDP contributors, the consumer spending contribution to the GDP is 60%. If people do not have disposable income, 65% of young people are unemployed and where you have more people unemployed than those who are employed in all the provinces except Gauteng, this is unsustainable to the economy. Investing in transformation is key to economic growth.”
She described poverty and unemployment as the biggest risks to the development of SA.
“The big risk that SA is facing is not energy, transport and logistics, water and electricity, it is the fact that the majority of the citizens of this country are sitting with idle hands.”
President Cyril Ramaphosa shared the same views when speaking at a Black Business Council event at the weekend.
“Fundamental economic transformation is vital to the growth of our economy and to the progress of our nation,” he said.
“This transformation is necessary if we are to unlock the capabilities of all our people and realise the full potential of our economy. We must dispense with the false choice that we are urged to make between growth and transformation.”
Ramaphosa said the BBBEE Act and the Employment Equity Act were essential to achieve transformation.
The ANC’s biggest government of national unity partner, the DA, has gone to court to challenge the Employment Equity Act, arguing the legislation is damaging to the economy.
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