Busa: Its time for us to lead on black economic transformation

Business Unity South Africa unveiled its own ideas on how to accelerate black economic transformation in the country at a time when the ruling party’s stance is becoming ever more populist as it confronts growing frustration by the poor and marginalised.

Busa says economic transformation is now the highest priority for its members and wants to lead the process as it engages with the likes of government and labour.

But this needs to start with its own members. “What’s new is that this document is as much about business talking to itself as it is to anyone else,” says Busa president, Jabu Mabuza. For too long [business] has been sitting on the sidelines finding fault. We have been far too reactive, and have taken the view that it was cheaper to pay the penalty of non-compliance rather than transform. So the time has come to look at our own house – what are we doing to transform this economy? We recognise that we need growth to transform, and we also recognise that when we were growing the economy ten years ago we did not transform. Time is not on our side. We will not be given another 23 years to make these mistakes again.”

Busa CEO Tanya Cohen stated categorically in the briefing that this was not business’ answer to the ruling party’s new radical economic transformation slogan, or the recent cabinet reshuffle. “The board discussed the issue in 2016, and we established a transformation think tank in February. The document presented to you today was endorsed by the board.”

Busa began with the end-state in mind. “Black economic transformation is a deracialised economy that seeks to broaden and deepen economic benefit and participation,” according to the document. Unlike much of the past and current prescriptions by government where the emphasis lay on minority ownership stakes in large, listed companies, business’ response includes the following:

1. Enabling a transformation culture in business. “We have been recalcitrant and reactive, and adversarial rather than engaging. We believe the current paradigm has supported a compliance-based mindset rather than embracing the broader aims of transformation,” says Busa vice president, Martin Kingston. So the process needs to start with business itself.
2. Enterprise development that expands opportunities and removes regulatory and other exclusionary practices for emerging black enterprises. Busa believes that the main driver for employment in an economy is small- and medium-sized businesses, which in other countries accounts for 95% of employment. In South Africa, smaller businesses only account for 65% of employment. Unlocking supply chains to government and the private sector via procurement opportunities is an excellent way to stimulate small enterprise and business development. But it must not be abused.
3. Education and skills development that requires enhanced support to basic education and skills development that is demand led by current and future business needs.
4. Blockages to employment need to be cleared, with systemic interventions promoting sustainable youth employment being scaled and supported.

Part of the problem when undertaking this initiative is that Busa discovered the measurement of how transformation is being achieved was problematic. “There is an absence on the true state of transformation so part of our process is figuring out how we measure this properly,” says Kingston.

The document is deliberately short on detail, because the organisation wants to build a high level of consensus with its partners. “Historically, the approach and design in charters has been unilateral rather than bilateral and multilateral. We need to have a common view as to what needs to be achieved, and we need a practical way of getting there and we must be all aligned,” says Kingston.

The biggest partner of course, is government. Organised business still feels spurned following the dismissal of Pravin Gordhan. But Mabuza puts on a brave face. “We went all over the world to reassure the ratings agencies that we would grow the economy and generate the taxes government needs to service its debt. We have to come back and engage with them again. They need to rebuild the trust they have destroyed. We are willing desirers to come back and work on a solution.”

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