The notion of the black economy is an illusion

By Siyabonga Hadebe

Johannesburg – New ideas for growing the economy, and especially those that seek to result in the increased participation of the black majority, appear to be nonexistent or lacking in depth.

In most cases there is a strong belief that since blacks enjoy the numerical advantage they can build their own economy and institutions in parallel to what already exists.


As part of this thinking, there is also a widespread belief that the black community holds substantial buying power.

Perhaps those behind the concept of the ‘township economy’ interpret the goings-on in the South African economy from this perspective. Of course, these perspectives are not necessarily part of public policy, but in the main, initiatives like ‘buy black’ are driven by independent groups.

On the other hand, the mainstream media have been perpetuating the idea that there is something tangible that the country can benefit from the debt-laden and asset-less black middle class.

These views clearly indicate that no one is seriously scrutinising the participation of the black majority in the economy.

The implication of this is that no one has conducted an in-depth investigation into black poverty in South Africa in the post-apartheid era, as has happened for other races in the past.

The post-apartheid dispensation never really bothered to investigate the poor black problem and its institutionalisation in South Africa. What happened in 1990 is that blacks were given full South African citizenship and nothing more was done to remove poverty in the black community from its base.

The main assumption of ‘South Africanness’ in terms of public policy, laws, regulations and so on creates a disturbing illusion that citizenship automatically produces equal opportunities, and the same type of people. But the reality is that when it comes to economics, South African citizens are stratified – one part of society (in the peoples of European stock, and sometimes Indians) enjoying better opportunities than their native compatriots.

They score lowest in human development indexes and also fall victim to racial discrimination.

The “two economies” phenomenon, as introduced by former president Thabo Mbeki, remains a mainstay of the country’s apartheid-based economy.

The notions of ‘buy black’ (black spending power), black diamonds, the township economy and black capitalism are the biggest nonsense in South African discourse at this moment.

They lack theoretical economic underpinnings and seek to distort history. They are a creation of big capital to keep the black majority in South Africa at the bottom of the food chain.

Unfortunately, public policy has fallen for this trap and does not come forward to openly support meaningful economic development and growth actively and openly in townships and rural areas. Si ya yi banga le economy!

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