Ramaphosa: South Africa's rebuilt economy must be better and blacker

• President Cyril Ramaphosa told the Black Management Forum that South Africa had to rebuild an economy that had black business at its centre.
• Ramaphosa said South Africa must emerge from the pandemic with an economy that creates more jobs and provides more opportunities to new entrants.
• He said funding institutions must be bold in their support for black businesses at this time.

President Cyril Ramaphosa said on Friday evening that government and other supporters of economic transformation were in the throes of a "battle" against enemies of progress and that those who opposed this transformation had to be "defeated".

Ramaphosa was speaking at a gala dinner in Johannesburg. The dinner was organised by the Black Management Forum in celebration of the organisation's forty-fifth year in existence.

The event comes as government has had to defend its Covid-19 Tourism Equity Fund, which is aimed at assisting black-owned tourism businesses to access financing to promote transformation in the industry. Solidarity and AfriForum challenged the fund's rollout at the North Gauteng High Court in Pretoria, saying it is discriminatory on the basis of race.

• READ | Judgment reserved in court challenge of govt's tourism equity fund criteria

Referencing the case, Ramaphosa said it's a clear example of a sector where resistance was found and "everything must be done to defeat such attacks on the transformation agenda".

"We will need to review our BBBEE strategy as well as the act to develop a new strategy, because we cannot continue to live in a country where black people do not own the levers of control of the economy. This needs to change," said Ramaphosa.

Earlier this week, Statistics South Africa announced that unemployment grew to a record high of 32.6% in the first quarter of 2021, with unemployment among black Africans much higher than in other groups.

During his keynote address, Ramaphosa hailed the BMF as the "true architects" of the Broad-Based Black Economic Empowerment Act and said the group was at the forefront of the transformation agenda in the South African economy. He said black business had to be central to South Africa's economic recovery.

"The economic contraction we are experiencing has hit many emerging businesses far harder than established businesses that are better resourced and have reserves. The recovery of our economy needs to be transformative. It needs to be more inclusive and more transformed than before," said Ramaphosa.

He added that government cannot allow the transformation agenda to be compromised by corruption.

Government is facing a storm of corruption in the procurement of personal protective equipment (PPE) in response to the Covid-19 pandemic. Minister of Health Zweli Mkhize is feeling the pressure to resign after reports that there was a conflict of interest in the awarding of a R150 million contract to Digital Vibes, as the company contracted two of Mkhize's associates.

Ramaphosa said the PPE scandal was a shock, but that he found comfort in learning that the formal and recognised black business formations were not involved in this corruption.

"We will work to ensure that those involved in corruption are arrested and that the monies that were stolen are brought back to the state -including the large companies," he said.

Funding

Ramaphosa said South Africa must emerge from the pandemic with a fundamentally different economy that creates more jobs and provides more opportunities to new entrants. He said funding institutions must be bold in their support for black businesses at this time.

"Funding is a major challenge, but we need to be creative and innovative. We must come up with funding options and proposals. This is where black business should not be afraid or hold back - even if we have to kiss as many frogs as we can - until we find our princes and princesses as we look to build and grow black businesses," Ramaphosa said.

Ramaphosa said the manufacture of vaccines must be led by black people as government had already given R18 billion to black industrialists in the past year.  

He said black businesses should not shy away from looking for opportunities on the continent, as the African Union launched the African medical supplies platform. Local businesses can place their products on the platform for purchase, with R2 billion worth of trade up for grabs, benefitting new companies.

"In the economy we have seen new emergent businesses in FinTech. The African Free Trade Agreement also creates opportunities for black business in South Africa with a market of 1.3 billion African people from nations with a combined GDP of $4 trillion," he said.

Ramaphosa also took the opportunity to ask BMF members to reconsider their position of refusing to apply for positions at state-owned entities as directors, saying that South Africa needed the skills of black professionals. Last year, the BMF issued a statement calling black professionals to hold back their resumes from state-owned entities amid concerns that black professionals at parastatals were under siege.

Before Ramaphosa's address, BMF president Andile Nomlala took the stage to decry reports of corruption, adding that the BMF and other black business formations rejected and condemned corruption in state PPE procurement.

"If you steal, we cannot call you black. There are no black thieves. We have started to be conscious about who are the people being arrested. It will never matter. When you steal, pillage or dilapidate our economy, you must be arrested, first or last.

"Because corruption has become a bigger pandemic than Covid-19, there are people who steal from our people and flaunt their spoils on social media. I can tell you, Mr President, from that point, as black professionals in our country, we are tired," said Nomlala.

Nomlala said South Africa can only thrive economically if it has a plethora of black entrepreneurs and industrialists and, pursuant to that, financial institutions need to align themselves to the goal of helping establish and support black businesses of all sizes and industries.

"We want equity funded by the PIC [Public Investment Corporation] in the state-owned enterprises as black people. We no longer trust that government can optimally run these entities. Therefore, the model that was applied to Telkom must be applied to others. We do not want diluted equity. We want proper equity directed to black business," Nomlala said.