I don’t know about you, but I’m still waiting for just one of the many articles or speeches being made in defence of BEE to make the economic or investment case for it.
I’ve read and listened to everything I can find in the past few months as the BEE issue has become more prominent and emotional, and not one has even bothered to try to describe how the law requiring investors to share 30% of their ventures in SA with black shareholders would make them more rather than less likely to invest.
It is the only question worth asking. Instead, on both sides of the debate increasingly angry contributors are drifting off the point. We suddenly have surveys showing the most black South Africans want it scrapped. Seriously? How many people did they ask? Turns out not many.
Then someone calculates that BEE has cost the country 2%-4% of its GDP. Really? It’s a guess at best — 4% is double the 2% — a thumb suck.
The side in favour of BEE is equally flighty. The attack on BEE is an attempt by whites to somehow “keep control” of the economy. Or to bring back apartheid. And it is frequently, and mischievously, painted as an attack on affirmative action generally, which it surely is not.
I know that for a fact. As editor of this newspaper for 14 years my black colleagues, senior and less so, were central to practically every new insight I had into our society. I would not have survived without them, and anyone trying to keep black people out of their business in SA today is just a fool.
The colours of our economy have changed irreversibly for the better. That makes life difficult for politicians to whom transformation, or the lack of it, is a tool to weaponise.
Fortunately, that isn’t happening. The boardrooms and executive suites of easily the majority of the companies at the peak of our economy are stuffed full of men and women of all shades of black.
The colours of our economy have changed irreversibly for the better. That makes life difficult for politicians to whom transformation, or the lack of it, is a tool to weaponise. They want more, more quickly, and the convenient thing about skin colour is you can easily count it. It’s as old as the hills. Even at the very height of apartheid the National Party split and a large faction of it wanted more apartheid, more quickly.
What you can’t count though is the amount of money not being invested here. There’s a general acceptance now that we need gross fixed capital formation (a fancy term for new investment) of about 30% of GDP a year to turn our unemployment around.
In his first term President Cyril Ramaphosa chased a mere 14% and we were supposed to be impressed when he reached his R1.2-trillion “investment target” in four years. Remember the investment ambassadors he sent out into the world to find the money? They failed.
I was early to point out in 2021 that he was shooting way too low. Today we are further away from that 30% target than ever and there are many reasons why. Crime is one. Unreliable electricity is another. And outright rotten governance — minerals minister Gwede Mantashe is a one-man wealth wrecker.
The requirement to offer 30% of any incoming investment into our country to black investors is almost certainly another. It should be removed.
Here’s the question. If the government wants to grow the economy, are we at least agreed that growth is impossible without investment? Because if we are, what can we do to remove any possible barriers to that investment?
I can’t prove that BEE and the 30% requirement are a barrier, but can anyone explain what the attractions might be of surrendering 30% of your investment in SA before you even start doing business here? What’s the investment case for that requirement?
• Bruce is a former editor of Business Day and the Financial Mail.
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