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

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
Comments have been closed for this article.

Inside News24

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


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.


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.