Economists and business councils are skittish about President Jacob Zuma’s vague plans to “step up” affirmative action in South Africa.
In late February, speaking to members of Parliament, SA president Jacob Zuma promised a period of “socio-economic transformation” following the May 7 elections.
Zuma told MPs that government would launch a drive to tackle poverty and inequality and ensure that affirmative action was stepped up.
The president said that whites still controlled senior management positions in business, and this had to change to make economic freedom a reality for the majority of South Africans.
“To believe that this can correct itself, I think it is the biggest mistake. It can’t. It is very important that we ensure those that were left outside are brought in and included,” Zuma said.
Feeling in the dark
According to the Cape Chamber of Commerce, while businesses realise that a sensible BEE agenda is necessary – many are disappointed that current policies seem to have benefitted only a few people, and have not been as inclusive as it was intended.
The Chamber said that redressing the past is vital for South Africa to move forward and grow an inclusive and economically active working class.
“The more active consumers we can create the better it is for business in general and the country as a whole.”
The Chamber said that it was “greatly” concerned with the comments Zuma made and his vague allusions to policy changes after the elections.
“This creates an air of uncertainty and business does not like uncertainty,” the Chamber said.
“Our government should step up and tell us what policy changes they have in mind ahead of the elections so voters can make informed decisions.”
“Government needs to create an environment in which we can deliver wealth-creating jobs which are sustainable. Making sweeping ‘watch this space’ statements ahead of an election is not doing the economy any favours,” the business body said.
Leave business to business
According to Efficient Group Chief Economist, Dawie Roodt, BEE policy has not done the South African economy any favours.
“BEE policies are not going to help government achieve what they set out to do – government should not be making decisions on behalf of businesses.”
According to Roodt, the way level the employment playing field in South Africa is to firstly “upskill” people, especially women, and secondly to give them access to jobs.
The recent Women Empowerment Gender Equality Bill, adopted in the National Assembly, speaks to the growing need for gender diversity in business.
The Bill calls for at least 50% of decision-making posts in businesses to be held by women.
However, Roodt said that the nature of the Bill, much like BEE quotas, is “just wrong”, and serves only to uplift the well-connected few through tokenism, while ignoring the vast majority of people in the country.
“Don’t tell business how to do business,” the economist said.
Roodt has been vocal against policy which seeks to simply “create jobs”, and insists that the only way to create real jobs in the country is through growing the economy.
Unemployment entrenches inequality
Chris Hart, strategist and economist at Investment Solutions, noted on social media – in a greater discussion about employment and poverty in the country – that political weight in the country should be about service, not patronage, corruption, or the view of “it’s our turn to eat”.
According to the economist, South African policy has been overemphasizing poverty alleviation, “and we are making very little progress in (reducing poverty),” he said.
He said that inequality is entrenched through unemployment, and that could only be alleviated through job creation.
“Anyone who can must be encouraged to create jobs…pro-business is also pro-poor. All wealth in society is originated through some business or enterprise activity.”
Hart indicated that simplifying tax and labour laws in the country would help small and medium enterprises navigate an already complicated business environment, which would ultimately help the economy, and South Africa to grow.
The National African Federated Chamber of Commerce and Industry (NAFCOC) and the Black Management Forum (BMF) were asked for their views on intensified BEE policies, but did not return comment by the time of publication.