Johannesburg - ANC secretary general Gwede Mantashe has said he has "serious grievances" with BEE focusing on shareholding rather helping beneficiaries gain a deeper understanding of business on Tuesday.
He was addressing analysts as part of the ANC's programme to speak to various sectors in South Africa.
Mantashe said the ANC would meet the Black Business Council
(BBC) to discuss the strengths and failures of black economic empowerment (BEE)
and the role of state procurement in transformation of the economy.
A representative from the BBC had complained that the
government's procurement policy had gone wrong.
Various delegates raised questions about the effectiveness
of BEE policies.
Mantashe responded that he had a problem with the idea of
"I have a serious grievance with BEE... focusing on
shareholding with beneficiaries not being operational."
He said if the beneficiaries of BEE deals were not part of
operations, they were not gaining a deeper understanding of the business in
order to grow.
"Operational exposure, to me, is more powerful than
Not a window-shopping CEO
Mantashe drew parallels with when the Afrikaners were in
power from 1948 to 1994.
"Afrikaner capital, after 40 years in power,... they
couldn't produce a single CEO of mining, not one."
All CEOs of mining companies up until 1994 were white and
"We should not wait for 40 years to produce genuine
black CEOs who can run companies."
He commended Exxaro Coal's South African CEO Sipho Nkosi for not
being a "window-shopping CEO".
"Sipho Nkosi is not a big shareholder, but he is very
operational... he knows mining. To me, that is how we are going to transform
When questioned about factions within the ANC, Mantashe said
they had been around for years.
"I wish we can have an organisation that has no
He spoke of a Pan-Africanist faction splitting from the ANC
amid "violent polemics" in 1959.
"It was then, it is today, it will be in future,"
However, he said: "When there are confrontations in an
organisation, we always exaggerate them as always a division about to see a
split. I think that is a flawed analysis when there are politicians."
He said the contradictions helped move the party forward.
"The fact that people have different views... actually
it sharpens you."
Black business should deliver affordable, quality products
and services if it wants government contracts, Mantashe said.
"As we support black business, black business must
bring a commitment of delivery, cost-competitive and quality of items that are
procured," he told analysts and business people in Soweto.
He asked why a government-built school cost a minimum of
R20m to construct, while a private sector-funded school only cost around R5m to
"Something is wrong with this system of creating layers
and layers of business because the primary objective of building a school is
made secondary... to creating business beneficiaries."
Mantashe said the primary outcome of the ANC lekgotla in
July was that the government needed to drop the system of tenders.
It needed to move away from giving business to black
companies, and then afterwards arguing about quality and cost.
"Don't undermine this question of people delivering
bridges that get eroded with the first rainfall. It can't continue. It just
can't continue. It is wrong. It is wrong."
Mantashe suggested that black businesses look to
SizweNtsalubaGobodo, South Africa's largest black auditing firm, as an example
of how to succeed.
The company started small, but now handled the entire audit account of parastatal Transnet because of the quality of its work, Mantashe said.