Johannesburg – The Black Business Council (BBC) plans to mobilise the government to use its legislative powers to achieve the lobby group’s ambitious target to have 70% of the country’s economy in black hands by 2030.
In an interview with Sunday World, BBC president Sandile Zungu says the government should hang its head in shame for its failure to make a meaningful impact in transforming the structural make-up of the economy.
“Our view as the Black Business Council is that the 70% target is achievable if the government accepts its responsibility. We do not have the state power, but the government has the legislative powers and authority to effect these changes. This can be achieved by using institutions such as the Public Investment Corporation (PIC) to unlock capital for black business. Institutions such as the Competition Commission are also crucial instruments to achieve this target,” he said.
The BBC first announced the target at its summit held in Johannesburg last week – a gathering that saw a multitude of black businesspeople sharing ideas on what they could do to transform South Africa’s economy, nearly 30 years since the dawn of democracy.
The PIC has come under criticism in some quarters for failure to back black business, particularly in the unlisted space. According to the PIC’s annual report, at the close of the financial year on March 31 2020, the assets under management’s value was R1.907 trillion, making it the biggest asset manger on the continent.
At a broad level, the PIC’s portfolio comprises domestic listed equities, unlisted investments, offshore and rest of Africa investments.
The domestic listed equities portfolio is made up of inhouse managed listed equities (32.82%), externally managed listed equities (8.28%), bonds (34.86%), cash and money markets (6.96%) and listed properties (1.38%).
The unlisted investment portfolio is made up of private equity (0.95%), impact investing (3.02%) and unlisted properties (2.69%). A recent study by the banking association has also showed that the sector’s ownership patterns are nowhere near representing the demographics of the country.
The survey showed total empowerment financing dropped 19,5% to R203,7 billion in 2019, while black ownership measures have declined over four years, as black shareholders realise value by selling shares, and diversify their investments away from banks.
Black business doyenne, and the country’s first black female chartered accountant, Nonkululeko Gobodo, said it was time for the establishment of a black bank. “We are not a first-world country.
“We have to come up with creative ways to allow black people to participate in the financial services sector as a means of breaking the vicious cycle of poverty for black people going on from generation to generation,” she said.
“The Reserve Bank needs to be engaged on the issue of bank ownership.”
Gobodo also took aim at financing institutions such as the Industrial Development Corporation for making black people “beg” for funding.
President Cyril Ramaphosa has encouraged Black Management Forum to rebuild a black-centred economy.
Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa. To Subscribe to Sunday World, click here.
Sunday World
