In 2014, as the ANC was basking in the glory of its national elections victory, the Black Industrialists Programme was launched.
The nucleus of the programme — the creation of 100 black industrialists within three years — had been conceptualised and crystallised at the National Broad-Based BEE Summit of 2013 and in various conversations, particularly those involving the Black Business Council.
The presidential BEE advisory council recommended a policy framework for the development of black industrialists that was tabled in cabinet in March 2014, before the launch of the programme in August 2014.
At the heart of the programme’s intentions was the desire to deepen the participation of black entrepreneurs in manufacturing, which — as then president Jacob Zuma stated at the 2015 Black Industrialists Indaba — had experienced a precipitous decline at the heart of the SA economy over an extended period.
The government response — the quest to find 100 black industrialists — became an attempt at entrenching the participation of black entrepreneurs in a diminishing slice of the economic pie.
Narrow focus, patchwork outcomes
That old habit of trying to extract something from a narrow canvas rather than widening the canvas and elevating transformation within a growing slice of the economic pie seems symptomatic of the ANC’s approach to managing the economy and balancing the all-important national transformation imperatives.
That old habit of trying to extract something from a narrow canvas rather than widening the canvas seems symptomatic of the ANC’s approach.
Since the launch of the programme there have been limited follow-ups in terms of policy or framework revision and refinement.
If the programme was a success, it should have been the reference point for how the country would replicate the model of transformation across economic sectors.
Regrettably, that has not become the way of doing things, and instead the patchwork approach of seeking to find balance between the viability and sustainability of a sector and the deepening of transformation seems to be the continuous curveball that confounds SA’s economic planners.
The problem is that the consensus seems to exist only at the identification of the problem statement — the structure and distribution of the economic resources and opportunities that need to be opened up — and collapses at every other follow-up issue.
Transformation Fund and the BEE levy debate
In recent months, as questions about the impact and value of BEE have escalated, the department of trade, industry & competition has been exploring the idea of a new approach to leverage the BEE model and raise funds to support black businesses.
Finding the correct balance across all pillars is incrementally more difficult for smaller businesses without the resources to invest in maximising them all.
The proposed Transformation Fund has been subject to public engagements where — as expected — the problem statement is understood and accepted, but the proposed solutions are polarising and contested.
In response to the debate, the department has mooted a BEE levy, which would grant companies a level 3 rating in exchange for a 3% gross revenue contribution to the fund. For those aiming for elevation to level 1, employment equity targets could get them there. The model sounds simpler than the current iteration, which comprises multiple pillars where companies have varying levels of success in compliance.
Finding the correct balance across all pillars is incrementally more difficult for smaller businesses without the resources to invest in maximising them all. The challenge with the shift to this model in favour of a central fund is that one of the great incentives for businesses — investing in their own sector and value chains through enterprise & supplier development programmes — may be diluted by the move of funds towards a central kitty.
For those who believe their transformation contributions should be visible in the sector they operate in, the shift may be difficult to digest and makes for a poor incentive. For others, the certainty of a linear rather than multipronged model may be a welcome opportunity. The question of where the pendulum lands depends on clarity and frankness in the consultation process.
• Sithole is an accountant, academic and activist.
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