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Author : Mathews Phosa

The Monash Africa Centre of Monash South First memorial lecture of Mr Thamsanqa Max Maisela by Dr Mathews Phosa, Treasurer-General of the ANC (Topic: Black entrepreneurship in South Africa)

25 October 2012

South Africans started designing the first draft of the black empowerment policy in 1990.

That design process started against the background of the constitutional negotiations that had just started.

It also started against the background of substantial inequalities in wealth between white and black, reflective of the previous political dispensation.

The process also took place against a global geopolitical order that has since changed with the emergence of the Asian giants as well as with transcontinental economic alliances.

The unfortunate fact is that black economic empowerment, although a work in progress, did not make any meaningful or substantial contribution towards addressing the twin ills of poverty and unemployment.

What it did do is create upper class of wealthy black investors who initially funded their wealth with debt through the acquisition of shareholding in successful white or international businesses.

It did not address a fundamental issue, namely that for economic transformation to be successful, we had to create black entrepreneurs who were not, as in the example above, the beneficiaries of wealth created by others.

It did not, also delve deep enough into critical issues such as the overhaul of our broader educational systems with a view towards ensuring that business principles as well as entrepreneurship were taught and instilled at a very early age.

What we did, therefore, was to place decision-making in the public sector in black hands, as well as to create a new layer of wealth without deepening and broadening entrepreneurship, wealth creation and retention.

The simple fact is, whether we are white or black, there is a dire need for broader participation in the wealth of this country in a way different from the current model.

Marikana taught us that our social cohesion is fragile, that our black economic empowerment model is dysfunctional, and that we need to be creative when old order models of negotiation are discarded by the disenfranchised.

If the miners at Marikana, and elsewhere, had a meaningful stake in the assets that they create, my view is that we would have had different and more positive outcomes.

Wealth is never given away, or successfully redistributed through force, but our circumstances dictate that the wealth and ownership gap needs to be addressed as a matter of priority.

If we hesitate in doing so, we will be the architects of our own demise.

To be even more brutal, our current policy drift and general public discourse on these matters do not contribute to a solution.

The time that lapses between the crisis, the policy solution and action does not contribute to social stability nor future cohesion.

To summarise: Before I attempt to project the above into the African continent, we must accept responsibility for the fact that we have not been successful enough in deepening wealth creation and promoting black entrepreneurship.

We must now hasten to address these twin matters as a matter of national priority.

It is against this background that Max Maisela must be lauded for his significant contribution to real black empowerment.

He single-handedly pioneered the principle of defined contributions to pension funds as well as the fact that workers gained representation in the structures that decided on how their, and the company`s contributions, would be managed.

After successfully reshaping this industry he went further and put his money where his mouth is by buying out NBC from it`s then mother company.

The commercial success story of NBC is a testament-in the deepest sense- to Mr Maisela and a lesson to all of us.

When he successfully changed policy by perseverance and brilliance, he went further and took the risk to become involved in the execution of it through acquiring ownership.

For those Maisela’s out there, there is a lot to do here in South Africa, both through ownership as well as through participation on the factory floor.

I believe, however, that we should start casting our eyes wider than our own South African backyard.

In one of their latest Africa Attractiveness studies looking at foreign direct investment, audit and advisory firm Ernst & Young found that not only is South Africa the biggest recipient of foreign direct investment (FDI) on the continent of Africa, it is also the biggest African investor into the African continent.

That South Africa is the leading destination for FDI projects in Africa is partly due to the fact that it is the continent’s largest and most developed economy, but also because it is virtually without peer among global emerging markets in providing a stable investment platform, with strong democratic institutions, a world class financial and capital markets system, and an environment conducive to doing business.

In various global benchmarks measuring these kinds of factors, South Africa consistently ranks among the leading emerging markets, and generally well ahead of its BRICS peers.

At the same time, and partly because it does offer such a stable investment platform, investment from South Africa into the rest of the continent is also growing substantially. We are currently ranked 6th overall in terms of cumulative FDI project numbers in Africa since 2003, signifying that South African companies have invested into the 6th most FDI projects overall on the continent.

These are a simple statistics, but critically important in the context of creating an atmosphere of Afro-optimism, both about our own future and that of our beloved continent.

Our inward looking commercial and economic philosophies should be complemented by outward looking approaches that shape a new way of looking at ourselves and our continent.

It should be informed by creating opportunities, and by executing our vision of our empowerment, and not by waiting for others to develop policies that will create "wealth" in the hands of a few and mountains of debt for others.

It is time that we make the development of a strategy of how South Africa, and it`s major black companies, invests into Africa, a priority.

Such a strategy could help guide and assist those entrepreneurs that see profit outside our boundaries, and want to reshape their businesses to tap into additional markets on our continent.

In seeking new markets, we can develop new partnerships, not only locally, but also with international entrepreneurs looking to invest in our continent.

In short then: Mr. Maisela not only reshaped policy, he took the risk to profit from it`s execution.

His example is not only valid here, but across the whole African continent.

Let us follow his star, and allow it to pull us into a bright and profitable future for all South Africans.

I thank you.

Issued by:
African National Congress