Economic transformation can no longer be deferred – an address to the Ahmed Kathrada Foundation by ANC Gauteng Chairperson Paul Mashatile
ANC Gauteng Chairperson Paul Mashatile last night told the Ahmed Kathrada Foundation Unity Golf Classic and Banquet that the stability of the South Africa relies on economic transformation.
“It is worrying that South Africa has become one of the most unequal societies in the world. This situation is unsustainable and we cannot but put in place measures to mitigate these risks to our democracy,” Mashatile told participants that included government, businesspeople and NGO’s.
Although the country has seen much economic growth during the period leading up to 2009, he said it is concerning that very few, if any, black industrialists have been produced in twenty years of freedom.
Mashatile said that Broad Based Black Economic Empowerment (BBBEE) instruments including sector charters have proved not to be effective tools to promote and foster genuine transformation.
“Rather than embrace true economic empowerment for the black majority, corporate South Africa seems to be engaged in malicious compliance – a practice where companies “tick the boxes” for the sole purpose of complying with the bare minimums of the economic empowerment charters.”
What this means in simple terms Mashatile said: “Corporate South Africa is being led from board to senior executive levels in a manner that does not reflect SA Inc demographically.”
He said since the country’s democratic breakthrough in 1994, the economic inequality gap has been widening, with the commanding heights of the economy still held by a minority that is mainly white and male.
“Black ownership of the JSE is a meagre 3%, with this ownership unfortunately encumbered by debt,” he told the gathering.
Mashatile said this is despite the fact that most black people save through their mandatory contributions to retirement funds which in turn invests amongst other assets in companies listed on the JSE. These assets, Mashatile said account for the largest pull of capital in South Africa and are about R3 trillion, with a significant portion invested on the JSE and Government Bonds.
Retirement funds own at least 30% of the companies listed on the JSE which in fact represents the largest category of ownership on the stock exchange.
“If transformation is to be taken forward in a significant way, this group of shareholders will need to become active and utilise their strength to accelerate transformation of the JSE,” Mashatile said.
He said amidst calls for radical transformation and for some sectors of the economy to be nationalized, through retirement schemes, “The people already share in the Country’s Wealth”.
The only challenge, Mashatile, pointed out, is that these are not directing the means of productions they are not represented at governance levels of companies.
He said BBBEE is not been helped by the fact that corporate South Africa seems to be engaged in malicious compliance – a practice where companies “tick the boxes” for the sole purpose of complying with the bare minimums of the economic empowerment charters.
The provincial chairperson said: “The future stability of our country depends on the urgent extension of economic opportunities to the black majority and broadening the ownership of the means of production to include the majority of hitherto disadvantaged South Africans.”
Mashatile concluded by saying that for the dream of a better life to be realised, strong partnerships between government, private sector, labour and civil society organisations will need to forged.
By ANC Gauteng Province Communications on behalf of ANC Gauteng Provincial Chairperson Paul Mashatile