Those South Africans who know what it’s like to be mugged will recount a familiar tale. A man in your space from nowhere, the glint of cold steel, and hand it over or else. Over in seconds — there is time for anger, tears and despair later on.
At least, however, the victim does not typically have to endure being lectured by the perpetrator about the innate justice of their actions. But if you’re a South African CEO reading about the department of trade, industry & competition’s (DTIC’s) plan to establish a R100bn BEE fund, that’s exactly what you must do.
The idea is deplorable and probably unworkable. A highfalutin press release invoked the loftiest imperatives of the constitution. But the pomposity failed to distract from the echoes emanating from its hollowness — all the outcomes the department brandished furiously in the face of heartless capital are already catered for in law. The minister, Parks Tau, was quoted as saying that the fund would ensure “existing commitments under BBBEE [broad-based BEE] legislation are strategically utilised to create meaningful economic transformation”. Disagree, and you’re condemned as “antitransformation”.
This is the kernel of Tau’s idea; that companies dispersing 3% of their post-tax profits on enterprise and supplier development (ESD) programmes are doing this less efficiently than the transformation fund will. But no-one seriously believes that the department’s “designated groups” will be better at producing whatever widget the original equipment manufacturer requires than the manufacturer that already buys it from its existing black suppliers.
It is necessary to understand it contextually. The ministry probably knows that you can’t go around annexing chunks of the economy without troubling the National Treasury. But the ANC is facing a drubbing in local government elections next year and needs to put clear water between itself and its main coalition partner, the DA.
All the outcomes the department brandished furiously in the face of heartless capital are already catered for in law
Political roughhousing around National Health Insurance and the Basic Education Laws Amendment Act, the abrupt signing of the Expropriation Act (which had been missing in action since March 2024), Transnet’s ham-fisted PR campaign as it seeks another bailout next month and now the proposed BEE fund represent the oldest trick in politics: throw a punch nobody was expecting.
The DA had to read about the Expropriation Act in the press and before John Steenhuisen had his pants on, the ANC was quick to characterise those who disagree with the BEE fund plan as “antitransformation elements”.
The level of harm the minister is willing to cause to policy certainty in pursuit of political mileage — as seen in the rand’s wobble — reveals two things: anxiety at Luthuli House about political realities in the metros, and the dearth of ideas to address their cause.
Therefore, populist proposals cannot distract from the deindustrialisation, capital flight and opportunity cost Tau’s department has presided over. Undoing with a flourish of a pen the painstaking work that corporates acting in good faith have taken on to ensure their supply chains are inclusive is a depressing reminder of the indifference at DTIC.
A political operator of Tau’s talent ought to steer his department into embracing the work of clearing the road for progressive businesses to grow. Instead, the BEE fund is yet another red traffic light on the PowerPoint risk assessments that will cross the desks of those who invest.
It is time for the minister to remember something simple. The South African economy is far too small to maintain with any dignity our country’s people. That is the cause of the party’s woes, not the disbursement of ESD funds.
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