Black industrialists do not own ‘spaza shops and KFCs’

2013-11-24 14:00

This week Philisiwe Mthethwa again extolled the virtues of the NEF-funded Luminance boutique, saying that critics just did not understand empowerment.

The NEF loaned Khanyi Dhlomo R34.1?million to open Luminance, a shop in Hyde Park that sells expensive international brands.

“People are obviously entitled to their opinion.

“Fortunately, I was there for the drafting of the BEE policies and codes. I was there for the mining charter and the finance charter, so I understand empowerment. I should have some idea of what is needed,” she said.

“I think the people making noises do not understand the market failure we are addressing.

“In retail, the structure is such that a proportion of imported goods is always sold. You can’t have different rules for a black- owned retail operation.

“If I was sitting at the IDC, I would be driving localisation. At the NEF, if I am looking [at transactions] for the strategic projects fund, then I would be driving the industrialisation agenda.

“When I look at transactions and see fashion, I say ‘very good’. I can drive the fashion agenda.”

In July, Rob Davies ordered an investigation into the loan to Dhlomo and her partners in Ndalo Luxury Ventures to build and stock the up-market Luminance in Johannesburg’s Hyde Park mall.

There was much debate over the large loan granted to a wealthy woman to fund a store thatmainly imported expensive designer clothes from abroad.

In August, Davies gave Parliament an ambivalent report noting that the deal had “features that were in line with” the dti’s mandate, but stopping well short of unequivocally approving the loan.

He also used the opportunity to issue a directive to all the dti’s agencies, including the NEF, which said that “government funds may not be used to support the importation of finished goods”.

The directive also emphasised funding for “productive sectors of the economy and value-added services”, categories that pointedly excluded retail.

Mthethwa has since been vocal in defending the deal as “exemplary”. She blamed the condemnation of it on “the detractors of transformation itself”.

In the NEF’s annual report this year, she hit back at the dti saying that 81% of the NEF loan had gone to local procurement, including the construction of the store. The importation of clothing was mostly funded by Dhlomo and her partners, she added.

“The idea from government is to create new black industrialists?–?the Dangotes [Alhaji Aliko Dangote, Nigerian business magnate] of the world,” she told City Press this week.

“What ‘black industrialists’ means is not SMMEs and spaza shops. We are taking professionals who already have money?–?R4?million, R5?million, even R10?million. For me these people are not rich.

“Otherwise, we limit ourselves to spaza shops and KFCs like we did in the past,” said Mthethwa. 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.

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