Leading speakers bring broad-based empowerment to the fore at Ditikeni conference Broad-based economic empowerment should be driver of new growth
Broad-based empowerment should be about “transformation rather than transfer” and linked directly to the expansion of the economic base and the restructuring of society. Councillor Duma Nkosi, executive mayor of Ekurhuleni Metropolitan Municipality said that rather than being a cost, broad based economic empowerment should become the driver of new growth; in this way new markets and new investments and new economic activity will focus on the development of the second economy.
Deputy director-general of the Department of Trade and Industry (dti) Lionel October told the conference that the full Codes of Good Practice for Broad-Based Black Economic Empowerment (BBBEE) will be published within two weeks. Previewing some of the imminent changes, October said the type of broad-based deals being done at the moment is precisely what the Codes envision continuing. The Codes, when finalised, would reinforce trends already evident. Soon, any company not BEE-compliant according to the Codes will find themselves marginalized from the economy, he said.
Dr Iraj Abedian
None of the new regulatory environment, as proposed in the DTI’s draft Codes of Practice, would mean anything if there were no economic growth, warned Dr Iraj Abedian, Chief Executive of Pan-African Investment & Research Services. Fortunately, the country is on the verge of stronger growth than we are accustomed to, said the economist. He said that previously disadvantaged communities, who were in any event largely excluded from deals in the past, will now benefit not only from being included but from a more robust economic growth. They are likely to benefit, but with one important proviso, according to Abedian: “Few people realise the extent to which South Africa’s economy is no longer dependent on commodities and agricultural produce. Fully two-thirds of the economy consists of tertiary services that are far more capital-intensive than labour-intensive.” Higher growth may therefore not benefit the broad masses unless they acquire skills to avail themselves of opportunity. High growth in a diversified economy seldom creates unskilled jobs. “The top priority for the country should therefore be skills development,” said Abedian.
Saki Macozoma, deputy chairman of Safika Holdings, warned a number of leading financial institutions and deputy chairman of Safika Holdings, warned that capital accumulation by blacks should not be under-emphasised, because the result would be to sentence them to being perpetual consumers. “One of the more remarkable economic trends over the past three years has been the property boom, but I’m convinced that 99% of the benefit went to whites. We shall only ever be consumers in South Africa, unless blacks accumulate the capital to build infrastructure.”
ANC Secretary General Kgalema Motlanthe’s speech was delivered by spokesperson Smuts Ngonyama: Strategic leaps that result in a revolutionary restructuring of the SA economy are not only required urgently, he said, they are absolutely necessary to sustain and consolidate its democratic order. Three important objectives that should be realised by the year 2014 are to reduce the rate of unemployment by half, reduce poverty by half through skills development assistance to small businesses, opportunities for self-employment and sustainable community livelihoods, and to redistribute at least 30% of agricultural land. “Black Economic Empowerment will be an important component of all the programmes we have identified to fundamentally transform our economy. Rather than being a cost, black economic empowerment should become the driver of new growth”.
The Broad-Based Empowerment Conference 2005 was held in Johannesburg on September 14, 2005, hosted by Ditikeni Investment Company.