Look for answers to BEE dilemma

Against the background of state capture and widespread looting countrywide by the politically well-connected, it seems a bit disingenuous for the commission looking after broad-based black economic empowerment (B-BBEE) to accuse white companies involved in “fronting” of sabotaging the economy.

The practice of “fronting” is, we agree, something which has, indeed, slowed down real economic empowerment of previously disadvantaged people and businesses, preventing them from playing what the commission calls a “meaningful” role in the economy.

It is also correct, as commission head Zodwa Ntuli observes, that company ownership patterns have not changed enough to reflect the political changes in society since 1994 – and that whites still play a proportionally skewed role in the business sector.

However, it is complex and requires more than a simplistic blaming of “evil” white capital for trying to undermine the government’s transformation agenda. First, it is natural, in a capitalist system, for a business to endeavour to make a profit and to grow – and impediments to that growth will be dealt with. B-BBEE, with its quota stipulations, is affirmative action in a command economy and, therefore, it is not unnatural for business to come up with ways around it.

In many cases, if businesses do not adapt, they die. Second, government, through its own tender system and affirmative action requirements, has encouraged “fronting” and, in the process, raised a whole class of get-rich-quick entrepreneurs who add little value other than to luxury car dealerships.

Little action has been taken against those sorts of people and, therefore the practice of “fronting” has flourished. The comments by Ntuli are an admission that the whole B-BBEE system has failed to transform the economy and grow a vibrant black business sector.

It’s time we looked again at the whole edifice of economic empowerment – for solutions, not accusations.

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