BLACK economic empowerment (BEE) is too focused on shareholdings and dividends, which fails to create real transformation in the business sphere, African National Congress secretary-general Gwede Mantashe said on Tuesday.
"I have a serious grievance with BEE focusing on shareholding.... You have no understanding of that sector (with simple shareholding)," he said at the University of Johannesburg’s Soweto Campus.
He was reacting to questions asked by the Black Business Council (BBC) at a dialogue session with editors, academics, business and members of civil society, on the outcome of the ANC policy conference held at the end of June.
The BBC was recently embroiled in a war of words with the Passenger Rail Agency of South Africa after it criticised the parastatal over its handling of tenders for rolling stock valued at about R126bn.
A question was raised about possible "set-asides" for empowerment companies in such deals by Black Business Council CE Xolani Qubeka at the dialogue on Tuesday.
"There needs to be significant talk about set-asides to make sure blacks in the country are at the forefront of the South African economy," Mr Qubeka said.
Mr Mantashe, in response, said he would have "qualms" with the concept of "set-asides" if it referred merely to dividends.
BEE should also be about acquiring skills and learning about the operations of the company itself, he said. Set-asides would be welcomed if they meant partnering with large companies which, in turn, led to the creation of new companies that were black owned and run.
He said Exxaro Resources CE Sipho Nkosi was an example of this, saying he was "not a big shareholder, but operational". Nor did he just provide window-dressing. "Operational exposure to me is more powerful than ownership and getting dividends," Mr Mantashe said.
He said the strongest message coming from the party’s last lekgotla was on tenders and procurement. This was in response to the BBC’s questions about state procurement.
Mr Mantashe said the ANC was open to discussion with the BBC and agreed that procurement processes had to change.
He said it was untenable that when the government built primary schools, it spent R20m, but when a school was donated by a company, that company spent only between R5m and R10m.
"Something is wrong in creating layers and layers of business."
He said the state was aware it gave out tenders, and the quality of the service provided was not up to scratch, pointing to the fact that newly built bridges were already being eroded.
"That debate we welcome with the BBC.... As we support black business, black business must bring a commitment of delivering cost-effective and quality services," he said.
Mr Mantashe urged the BBC to set up a meeting with the party to discuss these matters.
ANC national executive committee member Enoch Godongwana said black business should compile a document for its meeting with the ANC on how to address the issues that contribute to criticism of BEE.
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