Transformation: time for the stick?

The debate on the slow pace of transformation of the South African economy very often, and quite conveniently, has been led by black people expressing their dissatisfaction with resistant, so-called white business.

Have we, black people, ever paused to consider our role in this problem?

This week, parliament's standing committee on finance received additional submissions on the debate about slow transformation of the financial sector, this time from government bodies and black business organisations.

The Department of Trade and Industry's BBBEE Commission said the Financial Sector Code sought to fragment empowerment instead of "having a coherent approach" to it, and the code in its current form did not advance radical economic transformation.

The Black Management Forum questioned the rationale for the very existence of sector codes in general and the Financial Sector Code in particular. They argue that the code has to either be amended to meet or exceed the minimum requirements set by the B-BBEE generic codes, or it should be canned and everyone should get measured using the generic codes.

So it seems that government and black business do not want the Financial Sector Code anymore.

The awkward problem with that, however, is that the government and black business were very instrumental in its initial drafting about 13 years ago.

When I put this question of black business needing to also take responsibility for having negotiated the sector code and not simply to call for its scrapping, the BMF's Langalethu Manqele said: "We have the benefit of hindsight of knowing what has worked and what hasn't worked, and it would therefore be foolhardy of us not to call for the abolishment of the sector codes.

"The BMF has, since inception, been against the financial sector codes. In 2013, when the Department of Trade and Industry promulgated the generic codes, they gave all sectors time to align. The financial sector has not aligned to date."

So who's fault is it, then? Do we blame the Association for Black Securities and Investment Professionals and the government for having negotiated a bad outcome for black business?

"It wouldn't be fair to blame ABSIP. The discussions and the negotiations at the time pitted the powerful against the powerless. They pitted employers versus employees," said Manqele.

"If you were a Kennedy Bungane [then president of ABSIP and executive at Standard Bank] back then sitting across Jacko Maree [then CEO of Standard Bank], you clearly had less power. So the premise was weak from day one."

It is an undisputed fact that when ABSIP led the negotiations with the big banks, insurance companies and asset managers, it did so as a representative of all black business and black professionals.

Negotiations clearly ensued and a settlement was reached by the parties, culminating in the charter that eventually led to the sector code. So why are black business and government now unhappy with the outcome?

For the same reason that many black South Africans are now unhappy with the outcomes of the Codesa political settlement.

The inherent risk of any negotiated settlement is the manifestation of the concessions you make in the negotiations.

If you look closely at what our country is going through, you will see the sporadic incidents that remind us that, because of the settlement of the early 1990s, some things were never dealt with.

Whether it's the superiority complex of the idiot at Spur, or Helen Zille growing up with piped water all her life, the products of the concessions made in any negotiated settlement have a way of rearing their ugly heads.

It seems black business, "with the benefit of hindsight", is seeing the repercussions of its negotiated charters, as the politicians can clearly see the downside of the deal they cut more than 23 years ago.

Can you blame them? I don't think so. The other reality about negotiations is that one's position is often driven by the leverage one has or does not have at the time the negotiation takes place.

When the country was on fire, and the dawn of democracy was on the horizon after decades of oppression, I am not sure how many of us would've been unhappy with the outcome of 1994.

The real question now is, knowing what we know, what do we do?

Knowing that the charters, codes and most BBBEE initiatives haven't yielded the results we wanted, what do we do?

The carrot didn't work. Time for the stick, perhaps?

Khumalo is chief investment officer of MSG Afrika and presents "Power Business" on Power 98.7 at 5pm, Monday to Thursday