‘State funding makes or breaks you’

2015-03-29 15:00

“I am an industrialist,” says Ndaba Ntsele, chair and co-founder of the Pamodzi Group, president of the Black Business Council (BBC) and one of the leading figures behind the black industrialist movement currently taking shape.

The black-industrialists concept arose when the BBC broke away from Business Unity SA and the programme bearing the concept’s name is the “brainchild” of Deputy Minister of Trade and Industry Mzwandile Masina.

Ntsele’s investment company started in the 1970s as a house-building business in Soweto.

Though he built the foundation of his fortune long before state intervention in support of black businesses was even conceivable, he still could not have done it without the state.

The key for Ntsele was the introduction of 99-year leases for black South Africans towards the end of the 1970s, something the apartheid government conceded after lobbying by Anton Rupert, in particular, took place, Ntsele told City Press.

“That was my platform to build houses in townships.” His venture was also supported by the US’s Urban Foundation.

“I took advantage of the situation, but you have to get the government of the day involved.”

The way in which the current government needs to get involved is to create a “turnkey” solution, says Ntsele.

That includes “money, coaching, opening markets, set-asides and government procurement”. It also includes addressing the long-standing bugbear of late payments by government clients.

Ntsele repeatedly cites the example of Sasol and Sanlam, arguing black businesspeople need to receive the kind of support Afrikaner nationalism gave to those companies.

“The game is won or lost in the funding structure. Development finance institutions (DFIs) are the biggest supporters.” In South Africa, the DFIs act like private banks, says Ntsele.

“DFIs abroad are different.”

The first thing is to jettison the notion of SMMEs [small, medium and micro enterprises] as companies with turnover below R50?million a year, he told City Press. “We need to scratch that from the law.”

While you often hear how SMMEs contribute the vast majority of production in other economies, their definition of an SMME is worlds apart from South Africa’s. Translating the German definition into rands gives you companies with turnover of R4?billion a year, says Ntsele. It’s the same in Japan.

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