A light on Luminance

2014-09-21 15:00

The story in City Press on September 7 2014, ­“Luminance loan was not quite paid”, continues to perpetuate selective criticism of black economic empowerment and economic transformation.

Who cares that the loan was “not quite paid”? The notion of debt restructuring is a normal business financing practice, and of course it has nothing to do with BEE.

The ensuing debate on the funding of Luminance, a retail business founded by the entrepreneurial and enterprising Khanyi Dhlomo of Ndalo Luxury Ventures, clearly demonstrates the absence of “headline-grabbing news” and displays a lack of a clear understanding of the core objectives of BEE and its broader scope towards total economic emancipation for the majority of black people in South Africa.

According to most of those opposed to Dhlomo’s project, it was okay for the “top-of–the- league” stronger black boys to be funded through public sector BEE funding schemes, such as those provided by the Industrial Development Corporation, to acquire stakes in predominantly white owned companies, even if no single job was created in the process.

There is no moral argument against such BEE deals as they represent a part of the process of placing significant equity of the economy in the hands of those who, prior to democracy, were deprived of access to the sources of production and wealth creation.

These deals were never game-changers, but rather life-changers for those individuals and families who directly benefited in the process.

Dhlomo has never sought favours, so it doesn’t come as a surprise she and her partners have decided to dump funding from the National Empowerment Fund (NEF) because it became “too hot” for the group.

If Khanyi and company had bought a BEE stake in the traditional retail brands using NEF funding, it would have made a positive headline.

The greatest consumers of retail products are blacks yet blacks own a negligible portion of the sector, and therefore it is imperative and strategic that black businesses make major strides to enter the sector, not as nonexecutive directors, or HR or PR managers, but an owners.

In order to attain the “black industrialist” project, government would need to place significant resources at the disposal of aspirant and competent black entrepreneurs, including those in the retail sector, whether they are in Soweto or Hyde Park.

For this to happen, South Africa needs more visionaries such as Dhlomo in all major sectors of the economy.

It’s prudent that instead of focusing on Luminance, the focus should be on a more relevant and thorough investigation on the transformation practices and support for local content within the retail sector.

Qubeka is secretary of the Black Business Council and CEO of the Small Business Development Institute

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