Let’s address the elephant in the room — South Africa has recently been downgraded to junk status. Despite that, the private sector has remained resilient — could you tell investors why South Africa is still a relevant investment destination?

We’ve got a lot of well-established companies. If you look at your top 40 companies in the JSE, they’ve been there for decades. There’s good management and infrastructure in those companies. What we’re seeing is that these companies have been growing, year after year, irrespective of the recent junk status we’ve received from the two agencies.
I feel strongly that nothing much will change. In a short space of time we will see a change in government policy across the board, so I’m not too worried about what will happen in the long term. In the short term, it is difficult to attract investors into your country with a potential motion of no confidence in the president and no knowledge of what the plan is. The biggest issue, however, is what happens once the president is removed.

International business is interested to know what’s happened to the narrative of socioeconomic transformation and black empowerment in South Africa. Could you explain to us what has been working and what has not been working, and what can be improved?

When you look at BEE, you need to create new pillars altogether.
We should emphasise bringing black people into senior management structures in companies. In that way, you’re going to improve understanding of how to run a business. I’ve got a client who turned over R200M consistently in the last three or four years, but he started this business with no experience. He does not understand how to run a business. I went to see this client a week ago and while I was there I was told that the business had collapsed. For me, what’s important is to get black people through the employment ranks up to executive management. White companies can help them through enterprise development. Those businesses are sustainable because they understand strategy, business management, and the disciplines of being an entrepreneur.
The element called socioeconomic development, for me, shouldn’t even be there. You’re legislating something that people want to do. If you drive past five robots, you’ll definitely find a beggar next to the road. All of us want to give to this person because we see the need. That shouldn’t be legislated. Let companies to do it because they want to do it.
In BEE, I would have as management control as an element, I would have skills development, then I would have procurement and enterprise development as the third element. If you can master these three elements, then you will empower black people in a meaningful way.

How do you help companies achieve meaningful change?

What we do is, a company will say “these are my BEE initiatives,” from ownership all the way to social spend. They will give you the credentials of what they’ve done. You use that information to give them a score or a rating. They’ll come out as having Level 1 to Level 9, which is non-compliance status.
I love to engage with my clients. Whether they’re black or white, Afrikaans or Portuguese — we’ve got a lot of foreign-owned companies that we also rate — I always prefer to sit with my clients, talk to them, and understand their perspectives about BEE. One of the ways you can really do that is try to help people understand that the whole process is not just about ticking the boxes. The process is about saying “we want to do this.” The problem is that anything that is legislated is obligatory compliance.

What are your clients like now? How many can you serve?

We get over 1,000 clients per annum. We’re also now beginning to have ownership advisory clients. With the new BEE legislation that’s in effect now these elements have become compulsory. People are finding it a lot harder to do business if they cannot achieve a certain level, and they’re put in a position where they’re almost forced to have a black shareholder in the business.