The socio-political reasons B-BBEE is associated with "corruption" eclipse its potential as a solution — but resulting criminal booze networks worsen that criminality, writes Siya Khumalo.
"There will soon be lots of nice bankrupt businesses for ANC members to buy cheaply. This is not class suicide, but it is economic murder,” speculated a BizNews reader regarding the alcohol sales ban that’s cost the fiscus over R15 billion and the alcohol value chain, 165 000 jobs. This isn’t counting the cost of restarting and closing down glass furnaces, or shop floor space that’s occupied by unsellable stock.
This reader’s speculation is how the dominoes will likely fall if the patterns alleged by Dr Sydney Mufamadi’s testimony at the Zondo commission are a reliable reflection of the unconstitutionality prevalent among leaders of state institutions. We cannot discuss state capture, or its reflection in the potential capture of businesses, without discussing the abuse of Broad-Based Black Economic Empowerment (B-BBEE) for crony capitalism and cadre deployment to the benefit of yet unknown funders of the ruling party.
The unfortunate thing with the cynical application of B-BBEE, is it keeps the public from engaging in instances where it’s used well — instances that, if scaled up, would help South Africa address many of the crises it faces.
Project Nomzamo was started years ago by Ruwaida Shaik, former CEO of Dimela Health. The former CEO of a multinational pharmaceutical, Shaik has since been reabsorbed by the medical devices sector of the private sector.
Strengthen B-BBEE scorecards
Nomzamo leverages the Youth Employment Service (YES) Initiative, which enables businesses to get up to a two-level increase on their B-BBEE scorecard in exchange for hiring black youth to either work on their premises, or be placed in smaller businesses that need staff for one year. YES can sometimes strengthen businesses’ B-BBEE scorecards more cost-effectively than implementing other B-BBEE elements, and that, while directly benefiting unemployed, sometimes non-matriculated, black youth. These youth’s introduction into the workspace through YES de-risks them for future employers. This puts the "broad" back in broad-based black economic empowerment.
Quick tangent: why, despite the YES organisation’s robust public-awareness work, don’t audience members I’ve asked at varying discussions know they can get paid-for employees for their small businesses through this programme?
Often, these small businesses’ governance compliance isn’t up-to-scratch, making them ineligible for a host of helpful interventions. "BEE funding can solve many of those ineligibility problems if you have implementers who want to solve them," said Lee du Preez, managing director of transformation consultancy BEE Novation.
This reminds me of the example (and I’m not necessarily opining on it) when there was talk about amending the Constitution to allow for land expropriation without compensation. We then discovered the Constitution already made provision for that. There were political parties, however, who grew their voter bases on the perception that the Constitution was further behind on this than it really was.
Likewise, we’re not matching discussions on systemic racism and unemployment with existing incentive schemes like the BEE scorecard because those schemes have been overshadowed by a cynical use of the legislation that sponsored them.
"To whatever extent the queue at the front of BEE-certified service providers who want to do business with government is congested by the awarding of contracts to politically-connected cronies, or to businesses that ‘front’ politically-connected black people, to that extent the incentive around being BEE-compliant falls apart," explained Du Preez.
"From a political abuse perspective, the companies that do get state contracts can use B-BBEE to justify charging a bit more for the same value as non-compliant competitors. This isn’t wrong in and of itself, and in fact proving wrongdoing in the way someone does business with the state is notoriously tricky.
"When this is done for state capture through procurement, though, you often find suppliers liaise not necessarily with technical experts in government departments, but cadres who got the jobs to put the party’s interests first. The job itself then doesn’t get delivered, or if it is, is fruitless and wasteful expenditure. Whenever so-called 'white monopoly capital' threatens to speak out against this, it’s reminded the only policy alternatives voters will accept are expropriation without compensation and nationalisation."
Is the solution just scrapping B-BBEE? I asked.
"Obviously I’ll say no because BEE is my work," he replied, laughing.
Before this tangent we were discussing Project Nomzamo, which trains youth funded under YES into Community Health Workers (CHWs) providing health care services to disadvantaged communities.
Initially, these services focused on HIV/Aids. I wondered whether Nomzamo could expand to cover Covid-related issues. I’d heard bits and pieces about how social workers were more visible in society before the Department of Social Development could only hire 3 400 social workers out of 9 000 unemployed graduates last year. I felt they and psychologists would be useful in addressing addiction, domestic violence and risky behaviour that defeats the intent of flattening the curve.
Wits Health Hubb
I discovered a project similar to Nomzamo run by the University of the Witwatersrand, the Wits Health Hubb, whose equivalents to CHWs (Public Health Officers) deal with a broader set of social and health issues.
Its trainees can facilitate conversations that unearth domestic violence, substance abuse and similar issues. This cuts time spent finding people who need help, which shifts us closer to managing the social variables behind irresponsible alcohol consumption. So that’s unemployed youth, otherwise often the biggest abusers of substances, being trained and employed in interventions that assist with social ills like substance abuse.
Numbers were crunched in a casual discussion with one of its custodians. Without adjusting for inflation, it would take the initiative ±R100 million to get every assenting household in an area the size of Soweto screened for a range of health conditions that can be treated with early detection. These would include mental health, domestic violence, substance abuse — in addition to offering household health education. That population size would be covered in five years by 100 trainees; decreasing that time would require re-engineering the costs and de-prioritising our country’s sanitation of unoccupied schools and funding state-owned airlines.
In Could a Sober and Unvaccinated South Africa Vote ANC? I pointed out that often, "liturgical femicide at the altar of men’s self-aggrandizement needs alcohol". Referring to Eusebius Mckaiser’s observations about black men’s imposter syndrome, I explained that the abuse of B-BBEE is essential to shoring up black male insecurities, as are band-aids like alcohol abuse, sex and femicide. Our political leaders’ toxic masculinity would do this with any legislation.
Unless we can resist the cynicism we associate both with black men and the legislation they project their unhealed shadow onto, everything associated with us black men will become a self-fulfilling prophecy: the combination of the criminality around the illicit booze trade and the social factors behind alcohol abuse will be too powerful to turn around.
- Siya Khumalo is the author of You Have To Be Gay To Know God (2018). He is also a Mr Gay South Africa runner-up and Mr Gay World Top 10 finalist.
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