‘Vague’ plan skirts real issues

2010-12-02 10:44

The government’s New Growth Path (NGP) is unlikely to change the route that black economic ­empowerment has taken, analysts said.

“The document rehashes media soundbites without addressing substantial issues. The success of BEE hinges on access to cheaper capital. The NGP does not clearly address interest rates, growth and employment.

“BEE can’t succeed in an environment where real interest rates are high, the economy is not growing and is losing jobs. Anything else is tinkering at the edges,” said Duma Gqubule, a director at ­advisory firm Kio.
He said the document was too vague because it did not provide details on how it got to the assumptions it made. He cited an example of where the document said BEE imposed significant cost on the economy without quantifying that cost.

“In six months, nobody will be talking about this policy document,” he said.

Reg Rumney, head of the Centre for Economics Journalism in ­Africa at Rhodes University, agreed with Gqubule about the vagueness and contradictory ­nature of the document but ­welcomed the debate that it had generated.

“It is a great starting point to ­discuss innovative approaches to policy but I would like to see more detail about how the proposals would work,” he said.

“Reviewing BEE would be a ­challenge and would be disruptive to the economy, particularly the verification industry.”

He said the fronting and narrowness of empowerment justified the need to relook at how empowerment was being implemented.

Gavin Levenstein, chief operating officer of advisory firm EconoBEE, said some of the ­failures of BEE to have a bigger ­effect was due to government’s own treatment of the policy.

“The Preferential Procurement Policy Framework Act is outdated. If you want to win a government tender, for example, you need to be 50% black-owned. This figure is just illustrative and does not truly reflect the quality of empowerment within a company,” said ­Levenstein.

He said that as a result, companies often interpreted being BEE compliant as only having black partners as owners and managers. The document called for a rethink of BEE.

Levenstein said tweaking legislation and enforcing implementation might unleash BEE’s true ­potential.

“BEE can’t be about white business just selling to black people. It must be about creating an environment where black people can start their companies and build them to be big. That will create jobs,” said Levenstein.

He said this environment could be partly created if established firms focused more on enterprise development.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.