BEE public shares ‘deepen consumerism’

2008-09-11 00:00

Public offerings of black economic empowerment (BEE) shares by major listed companies will meaningfully assist empowerment, but will serve to deepen consumerism among black people in South Africa.

This is the view of Sandile Zungu, business figure and chairman of Zungu Investments Company, who addressed guests at an alumni function of the University of Cape Town, held this week in Durban.

He said calls for BEE policies to be revisited are premature and insensitive as challenges around direct ownership in most of SA’s major companies have yet to be addressed.

“… Yes, these policies may create a sense of awkwardness and inconvenience to those who benefited in the past, but one must look at the facts. Black business accounts for four percent of the companies listed on the JSE … and black participation at management level is at 20%.”

Over the past two years, a number of major companies, including Sasol, African Bank Investments Limited and Vodacom have initiated BEE schemes that contain offerings of “BEE shares” made to the public.

Although the public offerings have been welcomed, “giving hope to the people who believe that they are not part of the prominent names in BEE deals”, Zungu cautioned that these schemes will only serve to strengthen consumerism among black people.

“For example, in seven years time, this money will be used to pay off debt or to buy products.” He stressed that the focus should rather be on entrepreneurial development.

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