Reflections on what our new President’s maiden SONA speech might mean for BEE and development in 2018

2018 is the first time in as long as I can remember that I listened to a SONA speech in part, let alone the whole thing. It’s the first time I made notes and wondered how this might benefit our country, particularly our poor people, which is where our economy requires the most stimulation, needs to be most innovative and needs to solve complex problems that “ordinary” business often doesn’t need to think about. No, I’m not one of those who think our new President, Cyril Ramaphosa, is going to save South Africa. Certainly, no man can do that on his own. But we are starting from a low point, which means it is easier to create impact as the bar is simply much lower than it should be.

Our new President made many promises, and while we have to ask some tough questions about how this is all going to be achieved, if even some of these initiatives get some traction, it is good news for poverty, inequality and our economy as a whole. More economically active people means more money spent on goods and services in an economy, which can further create opportunities to develop economically active people, particularly in cases where township businesses and SMMEs grow, as well as businesses servicing these sectors. Not to mention the positive impact on society and a reduction in inequality, which has been shown in at least one study to significantly affect the health of all citizens in a society. In addition to this, it does occur to me that our new President earned his stripes building trade unions, then became one of South Africa’s most successful BEE investors and businessmen, who also has extensive political experience both before and after 1994. He is a man known for his ability to bring people together and negotiate successful win-win situations. If anyone, therefore, is going to be successful in finding ways to bring together the often opposing groups of workers, businesses and government, and getting them to work together, it is him. I do think that with his extensive business networks and credibility within corporate South Africa, that there could be room for him to push real transformational impact, rather than the endless compliance and box checking for which BEE is best known. Whether this sits within the BEE context, or beyond it with BEE being so compromised in terms of its perceived ability to create impact (it’s there, but blinkers blind us to seeing the how) remains to be seen.

A clear focus is job creation, particularly for young people. From what I hear, we can expect some welcome changes to BEE which could focus even more incentive on assisting our youth with internships and apprenticeships. There is also significant focus on entrepreneurship, across funding, support and through lowering of regulatory barriers, for start-ups, innovators, SMMEs, youth, people with disabilities and people living in townships and rural areas. Mention was made of 30% of public procurement being sourced from SMMEs, cooperatives and township and rural enterprises – and paying them on time.

Sectors of the economy to get particular focus or mention include mining (back to the drawing board here for the Mining Charter), agriculture, tourism, manufacturing – including the black industrialist policy – and infrastructure (specifically, water, health care, and road maintenance). I think we can expect government procurement in these areas, particularly the construction sector, to come with its own set of transformation and economic development requirements, much like the rail sector over the last few years. Hopefully with less corruption across both the public and private sectors. As our new President so poignantly said, “We must remember that every time someone is prepared to receive a bribe, there is someone who is prepared to make it”. While I think the new government will have its hands too full with all of these promises as well as clamping down on corruption to place focus on reviewing BEE, I think – and hope – that the corruption through fronting which is rife in businesses of all shapes, sizes and sectors, and the public sector, in respect of BEE is appropriately addressed.

BEE is able to make extremely valuable contributions to many of the initiatives, projects, and areas of development mentioned during SONA. What is required is a little less cynicism and a little more commitment from all of us to making our BEE spend count, to making sure our initiatives create positive impact and to stop looking for ways around BEE and start looking for ways to play our part. Our new President is far from perfect, but he has a huge task on his hands and his challenge to us, his request for us to all be involved in a bright new South Africa isn’t just political rhetoric; it’s an acknowledgment that nothing less is needed to move the needle substantially.

Share the Post:

Related Posts