JOHN DLUDLU | Is the government backpedalling on transformation?

Over the past year BEE has faced attacks from its opponents. Instead of urgently strengthening the economic redress policy and law, the government appears to have grown diffident about what it should do.

The discourse was sparked by an answer to a parliamentary question from the DA’s Toby Chance about the proposed Transformation Fund. This led to the release of a concept paper by trade, industry & competition minister Parks Tau.

The concept was universally criticised by the liberal establishment during the public comment period and later versions of the paper revealed a softening of the approach. Instead of being mandatory, established businesses can opt in and make voluntary contributions to the R100bn fund, seeded through enterprise and supplier development proceeds. Contributors would be rewarded with points to be used when tendering for government contracts.

Even after softening the text of the fund’s conceptualisation, the government seemed keen to launch it before year-end. A glamorous public launch was planned, capping a good year, including the successful hosting of the G20. But the event, which was to have been addressed by President Cyril Ramaphosa, was cancelled at the 11th hour. The reasons for the cancellation or “postponement” ranged from poor RSVP numbers to the president’s sudden unavailability.

The fund, to be managed by the National Empowerment Fund (NEF), has yet to be publicly launched. A fortnight ago Ramaphosa announced that South Africa would join the African Export-Import Bank. In his accession address he also said: “Once [the accession is] finalised, the SA-Afrexim Country programme will be operationalised with a finance package that will initially support a range of strategic projects across the trade and industrial cluster.

“And one of those areas that we are going to focus on with immediate effect is to give muscle to our Transformation Fund, to support black businesses who … were held back by the apartheid system from being active participants in the economy of the country.”

The fund is meant to fund small black-owned businesses across most economic sectors. But curiously, it did not feature in Ramaphosa’s state of the nation address (Sona) last Thursday. Instead, he said: “We are undertaking a review to refine, realign and strengthen our [broad-based BEE] framework to ensure that it supports greater transformation and inclusive growth. All of these actions will create a stronger economy and fix the foundations that were broken.”

Tau, who is spearheading the fund’s inception, and BEE proponents, must have been disappointed by the omission of any mention of the fund from such an important speech. This could mean one of two things: perhaps the profile of the fund is deliberately being lowered to manage expectations among beneficiaries or the government may want it to die quietly, like so many other initiatives.

[Parks] Tau, who is spearheading the fund’s inception, and BEE proponents, must have been disappointed by the omission of any mention of the fund from such an important speech.

Tau needs to know whether he still has his boss’s support in the fund’s establishment or he will start feeling like his predecessor, Ebrahim Patel, when his localisation policy came under attack, with his boss providing little air cover. Explicit support is important to legitimise the review work that is being carried out. The president has another opportunity this week to talk about the fund when he replies to the debate over his Sona.

As last year’s attacks on BEE grew, amplified by US President Donald Trump and his friend Elon Musk, Ramaphosa weighed in on the debate, defending the policy in his weekly newsletter.

What makes the omission even odder is that it occurred weeks after two BEE entities — Exxaro and Tshipi é Ntle — concluded a rare BEE deal, now approved by regulators, in terms of which Exxaro will buy Tshipi’s manganese assets.

On Tuesday the Black Management Forum released a study on the perceived impact of BEE on business performance, with MD Monde Ndlovu commenting: “Without broad-based BEE we will miss the core of humanity (ubuntu) and it’s time we correct perceptions around it.”

Political will — and facts — are critical to the future of BEE.

• Dludlu, a former editor of Sowetan, is CEO of the Small Business Institute.