BUSINESS NEWS

BEE must be part of the racial debate: Solidarity

By Staff WriterJanuary 12, 2016

 

Trade union Solidarity says that the ANC must acknowledge its own contribution to the racial tension in South Africa.

“Only then can a meaningful debate take place in South Africa about race,” it said.

The trade union said that the ANC’s pursuit of a non-racial South Africa President Jacob Zuma recently referred to, can only be realised if the party does away with its obsession with race-based legislation.

According to Solidarity deputy head Johan Kruger, the ANC’s policies on black economic empowerment (BEE) and affirmative action must form part of the debate if the ANC is in any way serious about creating a non-racial South Africa.

These form part of hundreds of laws introduced by the ruling party in 1994, that cement racial classification and racial quotas in nearly every sector of society, Solidarity said.

“We believe that the way in which affirmative action has been applied in South Africa for a long time is not in line with its original purpose. We are convinced that if government is really committed to stamp out racism, it would not hesitate to do away with policies that are based on race. Moreover, we would like to discuss alternatives to affirmative action with the ANC as part of such a debate,” Kruger said.

Kruger added that the ANC’s policy of race quotas cannot be defined as affirmative action but rather as a form of neo-racism.“

Worldwide, affirmative action is subject to a sunset clause. By applying affirmative action in terms of the national race demography – which changes constantly – the ANC ensures that affirmative action would never come to an end in South Africa. This is in itself discriminatory and also forms part of the complaint we brought before the United Nations about the South African government’s implementation of affirmative action,” Kruger said.

Kruger said that the ANC maintains double standards by committing itself to the elimination of discrimination, yet at the same time it enforces race legislation.

“What the ANC declares in public about race and racism is not consistent with what it applies in practice. In reality, this contributes to the problem of racial division in South Africa,” Solidarity said.

BUSINESS NEWS

Absa revolt as staff threaten to join Malema protest: report

By Staff WriterDecember 6, 2015

 

The Sunday Times has reported that Absa CEO, Maria Ramos has met with leaders of the Economic Freedom Fighters (EFF), following threats by the political party to shut the bank down.

The EFF said last week that it has established a ‘special team’ that is working on the occupation of Absa branches across the country.

It said that Absa is specifically targeted because of its historical connection with the Broederbond.

“The occupation of Absa branches will begin in 2016 on a date not to be disclosed. The CIC (Commander in Chief) Julius Malema will personally be leading the occupation,” the EFF said in a statement.

Ramos met with EFF chairman Dali Mpofu, where “they begged him not to go ahead with the march,” The Sunday Times said, citing a senior Absa employee.

It was reported that Mpofu met with a small group of employees who are at the forefront of a revolt at the bank.

The paper, citing one of the leaders of the revolt, reported that more than 2,800 employees have signed a petition to join the march.

The EFF  said it is specifically targeting white monopoly capital institutions that have enjoyed protection of government. “When people are marching against white monopoly capital, government has always demonstrated its willingness to use violence to defend their interests,” it said.

“The EFF with the occupation of Absa branches is taking the fight to white capital. It is a struggle that is unstoppable. The EFF will not rest until the inequality gap is closed and wealth is shared among the people of this country.”

It said  that many other institutions will be identified for occupation following the the occupation of Absa.

The full article can be found in the December 6, 2015 edition of the Sunday Times.

BUSINESS NEWS

How many BEE millionaires are in South Africa

By Staff WriterMarch 12, 2015

 

A new report finds that there were 14,700 South African high-net-worth individuals (HNWIs) from previously disadvantaged groups at the end of 2014.

This equates to 31% of the country’s total HNWI population, according to the 3^rd annual wealth report on South Africa, entitled the “South Africa 2015 Wealth Report”, published by New World Wealth.

A HNWI is person with wealth of US$1 million or more, whilst a multi-millionaire is an individual with wealth of at least US$10 million.

“Wealth” is defined as the net value of assets, which includes financial holdings, business interests and tangible assets. The only item excluded from NWW’s valuation is primary residences.

Out of a total 46,800 HNWIs in SA in 2014, 32,100 are white, representing 69%, while 9,800, are either Indian, Asian or coloured representing 21%, and 4,900, or 10%, are African.

“This is a relatively low percentage considering that these groups make up 90% of the national population,” NWW said.

However, a previous New World Wealth report showed that SA had 7,800 millionaires from previously disadvantaged groups in 2013 – equating to only 16% of South Africa’s total millionaire population.

This means that the number of millionaires from previously disadvantaged groups has also doubled between 2013 – 2014.

HNWI changes 2013 – 2014

Group	2013	2014	Change
White	40 900	32 100	-21.5%
Previously disadvantaged	7 800	14 700	88.5%
Total	48 700	46 800	-3.9%

HNWI demographic changes 2007 – 2014

Group	2007	2014	Change
White	36 900	32 100	-13%
Asian/Indian/Coloured	3 600	9 800	172%
African	2 300	4 900	113%
Total	42 800	46 800	9%

Between 2007, and 2014, the Indian/Asian population segment has seen 172%  growth in high-net-worth individuals, from 3,600, while the African segment grew 113%, from 2,300 HNWIs in 2007.

Interestingly, the number of white high-net-worth individuals has declined by 13% over the past seven years, from 36,900 in 2007, to 32,100 in 2014.

Overall the country has added 4,000 HNWIs over that time period.

BEE, or Broad-based Black Economic Empowerment (B-BBEE) is an initiative launched by the South African Government under the BEE Act to address the restrictions that exist within the country for black individuals to participate fairly in the economy.

Earlier in March, research found that black South Africans hold at least 23% of the Top 100 companies listed on the Johannesburg Stock Exchange as at the end of 2013.

The shares held by black investors include 10% held directly (largely through BEE schemes) and 13% through mandated investment – mostly through individuals contributing to pension funds, unit trusts and life policies.

White South Africans hold approximately 22% of the Top 100 companies, while foreign investors hold about 39%, up from 34% in 2011.

BUSINESS NEWS

BEE deals drive over R319 billion in value

By RDM NewsJune 25, 2015

“Recent statements that BEE deals do not create substantial value are false.”

That’s the conclusion Intellidex chairman Stuart Theobald has drawn from research released on Thursday which‚ it is claimed‚ for the first time puts a number to the value of black economic empowerment transactions.

“Deals done by the JSE’s 100 largest companies have collectively generated R317-billion of value for beneficiaries‚” an Intellidex statement said.

“What was particularly interesting is to see the value that staff and communities have derived‚” said Theobald.

“The numbers indicate that many poor and working class black South Africans now have access to significant resources because of BEE deals.

“To get a sense of the scale of the value‚ consider that it is 1.8 times the total corporate income tax take in 2014 and is enough to purchase the entire stock of planted agricultural land and machinery in the country.”

The R317-billion claimed by Intellidex “represents the net asset value after all debt and other financial obligations are deducted”.

Just over a third of this – or R108-billion – has been generated by BEE deals “that have matured and are no longer encumbered by trading restrictions or financial obligations (meaning that beneficiaries are free to use the value as they see fit)”‚ while the remaining R209-billion comprises “schemes that are still ‘live’‚ but are expected to mature within the next few years”.

The research found that R52bn (16%) of the total is attributable to staff schemes‚ R196bn (62%) to strategic investment partners and R69bn (22%) to broad-based community schemes. Strategic partners are companies and prominent individuals‚ but often have broad bases of beneficiaries.

Intellidex said that 2014 was a boom year “for maturing deals with almost R60-billion accruing to beneficiaries”‚ driven largely by huge deals made by FirstRand‚ Sanlam and Standard Bank.

The study also highlighted live deals from Exxaro and Naspers that are expected to yield R17-billion and R14-billion respectively when they mature.

BUSINESS NEWS

How many black South Africans benefit from BEE

By Staff WriterJuly 28, 2015

The current system of Black Economic Empowerment (BEE) only benefits a small elite, and will leave the majority of black South Africans out in the cold if an alternative is not found.

This is according to Dr Anthea Jeffery, Head of Policy Research at the Institute of Race Relations (IRR), who has called for an end to the ‘extortion’ of the BEE system.

Last week (20 July), Western Cape Premier Helen Zille spoke out against new Draft Preferential Procurement Regulations, which would see government pay a large premium on all procurement less than R10 million, in favour of BEE companies.

In a column on Politcsweb, Jeffery said that BEE benefits approximately 15% of the black population, with “a small group of beneficiaries having their way at the cost of the many”.

“BEE is a key reason why economic growth in South Africa lags so far behind other emerging countries.”

The remaining 85% have very little prospect of ever gaining BEE ownership deals, management posts, preferential tenders, or new small businesses to run, she said.

“Worse still, BEE does not simply bypass the 85% majority. Instead, it actively harms that 85% by reducing investment, growth, and jobs and making it very much harder for the poor to climb the economic ladder to success.”

The black African population is in the majority (44.23 million) and constitutes approximately 80% of the total South African population, according to StatsSA.

According to Jeffery, the indirect expropriation of existing firms through the 51% BEE deals – which is now increasingly required under empowerment rules – will ultimately do nothing to help unemployment, if no alternative is found.

EED: a BEE alternative

Dr Anthea Jeffery has proposed an alternative to BEE called “Economic Empowerment for the Disadvantaged or “EED”.

This program would:

• Make rapid economic growth, rather than redistribution, the overriding policy priority.
• Re-orient labour laws to help the jobless gain access to employment.
• Increase community control over schools, and give parents state-funded education vouchers.
• Give school leavers state-funded vouchers for university or technical education at institutions of their choice.
• Sell off floundering state-owned enterprises to the private sector to help overcome the electricity crises.
• Promote entrepreneurship via a venture capital fund with monies from both the state and the private sector.

“The immediate consequence of indirect expropriation under the rubric of BEE will be to deter direct investment, reduce our already meagre growth rate, and make it harder still for some 8.7 million unemployed South Africans (up from 3.7 million in 1994) to find jobs.” Jeffery said.

“The more this indirect expropriation is sanctioned and applauded, the more state powers of this kind will expand.”

“The real challenge is to open up real opportunities for all disadvantaged black South Africans. This cannot be done while BEE puts ever heavier leg irons on the economy.”

BEE: is it working?

BEE was launched in 2003, to redress the inequalities of Apartheid by giving certain previously disadvantaged groups of South African citizens economic privileges previously not available to them.

In October 2014, ANC deputy president Cyril Ramaphosa said that BEE benefits everyone and is necessary to build a prosperous, sustainable and equitable society.

However, data from research groups has shown that, while there has been an increase in wealthy black Africans since 2007 (113% increase to 4,900 individuals with a net worth over $1 million) – the black African population has shown the smallest growth in wealth out of all previously disadvantaged groups.

In March 2015, research found that black South Africans hold at least 23% of the Top 100 companies listed on the Johannesburg Stock Exchange as at the end of 2013.

The shares held by black investors include 10% held directly (largely through BEE schemes) and 13% through mandated investment – mostly through individuals contributing to pension funds, unit trusts and life policies.

An Intellidex study has shown that empowerment deals and schemes done by the JSE’s 100 largest companies have collectively generated R317-billion of value for beneficiaries – R108-billion of which has been generated by BEE deals, alone.

BUSINESS NEWS

We will shut ‘racist’ Absa down: Malema

By Staff WriterNovember 8, 2015

EFF leader Julius Malema is reportedly aiming to shut down Absa banks across the country as part of a campaign to transform ownership.

According to the Sunday Times, the political figure is demanding that 51% of the bank be put into black hands, and follows a similar march to the JSE last month.

He said that Absa would not be able conduct business as a result of the campaign. “Fighters will walk into a branch and occupy it. No service, no nothing. We will close it down.

Malema, the Times said, wants 500,000 people to occupy the financial district of Sandton, although no time for the march has been allocated yet.

“I have got a strong proposal, which I have given to the EFF, that we should consider shutting down one of the banks. I’ve got Absa a priority because it’s…racist and one of the banks that incorporated with the Broederbond banks.”

Absa is now majority owned by UK-based Barclays. It serves approximately 10 million clients, and has more than 800 branches countrywide. It also employs more than 30,000 people.

“There is a huge debate going within the EFF about detailed practical programmes of attacks on white capital,” Malema reportdely said.

Absa told the paper that it had not received any communication from the EFF.

This article can be found in the 8 November, 2015. edition of the Sunday Times.

BUSINESS NEWS

ANC Youth League blames Absa for the rand crash

By Staff WriterJanuary 15, 2016

The ANC Youth League has laid the blame for South Africa’s weak currency at the feet of Absa and its parent company, Barclays Bank.

The rand recently hit a record low against the dollar, tanking to R17.99 against the greenback over the second weekend in January.

While economists have pointed the finger at government, and president Jacob Zuma in particular, along with other external factors for the rand weakness, the ANC Youth league said banks are to blame.

The political group said that Barclays has been “excessively and aggressively” selling the local currency for the past few months.

“This has created a panic in international commodity trading platforms like forex. The excessive selling by Barclays has in turn reduced the demand for the South African rand,” the ANCYL said.

“The plan is to sell so much of the rand currency in order to drive down its price and then to later re-purchase it, which will push up its value as demand for it increases.”

“This is how that they profiteer and play with our country, through their actions.”

The league pointed out that in May 2015, Barclays was hit with a $2.4 Billion fine for rigging the foreign exchange market, and has, over time, paid a total of $638 million for misconduct related to Foreign Exchange at the New York Department of Financial Services.

Golman Sachs is also to blame, the league said.

The youth league accused the finance houses of ditching South Africa in favour of boosting the economies of their home countries.

The group called on “patriotic” South Africans to pull their money out of the financial groups, including controlled entities such as Absa.

This is the second time Absa has been specifically targeted by political groups in the country.

The bank was recently the target of Julius Malema and EFF, which threatened to shut the bank down for being part of a racist system, boosting white capital.