Few countries, even in Africa, are so entangled in the complexities of their past as South Africa. A recent proposal from the Minister of Arts and Culture to change the country’s name to Azania is symbolic of just how early it is in the story of the modern South African state.

The end of apartheid, which marked the true beginnings of the country’s post-colonial history, occurred little more than two decades ago and left South Africans facing as many problems as they had solved.
In a business community once entirely white, incorporating the country’s 80% black majority (numbering 45 million) has been a primary focus of successive governments. To this end, the policy of Black Economic Empowerment (BEE) has sought to enhance the participation of black people in the country’s economy. Far from being a purely moralistic initiative to redress past ills, BEE is set out as a pragmatic strategy to realize the country’s full potential by encouraging entrepreneurship among all of its citizens rather than only a privileged few. In this way, South Africa hopes to achieve inclusive growth for its entire population.
Mpho Mutavhatsindi, managing director of Johannesburg-based BEE verification agency Muthelo-BEE, believes that winning over business owners on the program’s philosophy is essential: “One of the ways you can [achieve meaningful change] is to help people understand that the whole process is not just about ticking the boxes,” he says.

“…One of the ways you can [achieve meaningful change] is to help people understand that the whole process is not just about ticking the boxes… ”

Mr. Mpho Mutavhatsindi
Managing Director of Muthelo-BEE (PTY) Ltd

Mutavhatsindi is under no illusions about the challenges facing the BEE initiative, and they are not insignificant—one report has said that it benefits only 15% of the black population. He is certain, however, that with meritocracy placed more firmly at its core and steps taken toward the improvement of South Africa’s skill set, it can succeed.

 

 

“For me, what’s important is to get black people through the employment ranks up to executive management,” says Mutavhatsindi.
In the drive to boost black business ownership, he suggests rewarding employee performance and loyalty with shares: “Employees who have been with you for a while, through difficult times, why not consider bringing them in as shareholders instead of selling to an individual? In this way, BEE can begin to bear fruit.”
It must, however, be recognized that much fruit has already been borne. One enterprise that has flourished under the auspices of BEE is Afric Oil, South Africa’s first black fuel-distribution company. CEO Tseke Nkadimeng acknowledges the role the initiative played in establishing the company within the industry: “In the late 1990s and early 2000s, Afric Oil won a big contract to supply Transnet. A lot of big companies were obliged to give a slice of the supply market to black companies. Afric Oil took advantage of those opportunities to build itself in small steps.”
Afric Oil now owns 1% of total distribution and hopes in three to four months to be listed on the Johannesburg Stock Exchange, but Nkadimeng will not stop there: “The JSE listing will be just one step. We are looking to get at least 10% of the market share in South Africa, being a distributor that can run things straight from the refinery into a service station without assistance from other entities.”

The room for ambition that Nkadimeng and black businesspeople like him now enjoy is in large part thanks to the BEE initiative. The initial leg up that the policy provides can lead to big things: Afric Oil has already expanded outside of South Africa to Zimbabwe, Zambia, and the Democratic Republic of Congo; Nkadimeng sees potential for further expansion into Namibia and Botswana. Afric Oil hopes to lead by example, demonstrating that—given the means—black South African companies can achieve success not only within South Africa but also throughout the region.
A proven success story when it comes to regional expansion is Centurion Law Group. As CEO NJ Ayuk says, the firm is “providing African solutions to African problems.”Established in four other African countries and operating in 49 total, Centurion certainly lives up to its claim of being a “truly pan-African law firm.” The company’s highly trained legal professionals are testament to the ease with which it is possible for multinational corporations to abide by BEE standards, the racial selectivity of which have been called into question by critics. Like Mutavhatsindi, Ayuk emphasizes the importance of education, beyond the BEE initiative itself, in correcting past imbalances: “The fight for education is going to be the next anti-apartheid struggle. We should ingrain and mandate the importance of education into the constitution and into government spending.”

Others, such as Harith General Partners CEO Tshepo Mahloele, believe the answer lies in improved infrastructure. “We need to connect African states the way European states are connected,” says Mahloele. “The way Paris and London are connected, so should
Johannesburg, Luanda, Lusaka, and Nairobi be in the same manner. That connectivity grows your market overnight.” Harith’s African roots are preserved among its core principles. A black-owned company, it works to develop infrastructure and unlock the wealth of potential within the country and the region.
It is equally important that BEE, in its mission to develop a wholly inclusive economy, works to empower women as much as men. More can be done, but success stories like that of iX Engineers are testament to the possibilities of the scheme. A black-owned engineering company with 35% of its shares owned by black women, iX embodies BEE’s inclusive spirit. CEO Lebo Leshabane sees even further advances ahead: “I have aspirations to bring in even more women to the team. It’s about creating a balance.”

“BEE is leveling the playing field for many black South Africans, but with problems still to address and so much potential still untapped, the future remains an exciting mystery for the still-blooming Rainbow Nation”

After half a century of apartheid rule, legislative steps had to be taken to redress a longstanding imbalance in South Africa’s business community.
BEE is leveling the playing field for many black South Africans, but with problems still to address and so much potential still untapped, the future remains an exciting mystery for the still-blooming Rainbow Nation.