Johannesburg – Broad-based black economic empowerment (BBBEE) is important; however, we need to rethink the current BBBEE model, according to former public protector Advocate Thuli Madonsela.
Madonsela was speaking at the Association of Black Securities and Investment Professionals (Absip) Financial Services Conference, held in Sandton on Tuesday. Her address focused on ethical leadership and economic transformation.
“BEE is important. There is no chance that the country will be stable without BEE of some sort. There is no chance we could achieve a stable democracy,” she said. “As long as there is injustice somewhere, we can’t have sustainable peace.”
BBBEE ensures the promotion of equality and the prevention of unfair discrimination. “But the reality is that the past still weighs heavily on us,” she said. This is especially true for those excluded from opportunities in the past.
The wealthiest 4% of households in the economy account for 34% of the wealth in the economy. And 66% of households only receive 21% of income earned in this nation, she said. “The capital in this country is still white and male. The face of poverty is still black African and female.”
Madonsela said the current BBBEE model, which involves giving people money to buy into existing businesses, does not “broaden the economic cake” in South Africa.
She compared it to Afrikaner economic transformation, where government invested in start-up Afrikaner companies which became giants, equivalent to those of their English counterparts.
“There is nothing wrong with buying into existing companies, but it can’t be the only model we focus on,” she said.
Larger companies should also start investing in smaller companies, said Madonsela. Smaller companies are not necessarily inexperienced, but this creates an opportunity for them to partner with others to ensure excellence.
“A lot of people who are millionaires and billionaires would be gone if we removed government tenders. That is not economic transformation,” she said.
Madonsela added that corruption undermines everything that has been earned. “The sad thing about corruption is that you can rise like a shooting star through corrupt business dealings. But the day you are found out, you lose everything, including the things you worked for
“Where we have peace, everyone is afforded the opportunity to live a decent life and advance themselves economically, socially and politically.”Read Fin24's top stories trending on Twitter: Fin24’s top stories