‘Business must reflect SA’

2013-10-27 14:00

The construction cartel looms large in the greater transformation agenda, as defined this week by the two leading black business lobbies.

The annual conference of the Black Management Forum (BMF) this week focused on corporate governance, which president Bonang Mohale says was inspired by corruption in the public and private sector.

Also this week, the Black Business Council announced it would be spearheading a class action of its members against those companies involved in the cartel.

According to Mohale, cultivating a culture of good governance in business, government and labour is imperative so that the trust between the parties could grow.

The relationship between government and business, which has caused a lot of friction in the past, has been put on the back burner as heated labour relations, especially in the private sector, have hogged the spotlight.

Mohale said: “It is in government’s own interest to ensure that it works hand in glove with business because the only source of government’s revenue comes from business in the form of corporate tax and also individual taxes that comes as a result of employees being employed at these businesses.”

But he was sympathetic to labour.

“Profit is a good thing, because the more profit these companies post the more revenue Pravin Gordhan gets (in taxes), but it needs to be done in a climate that is respectful and that is conducive to labour feeling needed and wanted.”

Mohale said the transformation story in South Africa would remain incomplete “unless South African businesses can be broadly reflective of the demographics so that corporate South Africa looks like South Africa because Japanese, Indian and Chinese companies look typically Japanese, Indian and Chinese, and nothing else”.

According to Colin Coleman, the managing director for the investment banking division at Goldman Sachs, empowerment has productive benefits through employment creation and increasing the number of consumers.

“In the decade from 2001 to 2010, we have studied that effectively in the living standard measure (LSM) 5-10, which is the middle- to the higher-income bracket. Roughly 10?million South Africans have entered that bracket, which is a remarkable achievement.

“So if you think about that one?million a year new entrants into LSM 5-10, it means there are one?million more consumers going into the shops,” said Coleman.

But there have been conflicting reports on how many people, especially black people, make up South Africa’s middle class.

Although Gordhan did not specifically say anything in his speech pertaining to small businesses, Mohale said the BMF did support the call for a separate ministry for small and medium enterprises.

“When you compare us with our Brics (Brazil, Russia, India, China) compatriots, more than half of their GDP comes from small and medium enterprises.

“A majority of jobs are created by small and medium enterprises more than by established businesses because all of us (businesses) in the last 15 years have been suffering from jobless growth, where companies are posting record profits with fewer people.”

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