You are here:   Dispatches > Cyril Ramaphosa's poisoned chalice

Where are they now? Ajay and Atul Gupta in 2011 with Duduzane (son of Jacob) Zuma, then director of one of their companies  (©Gallo Images/City Press/Muntu Vilakazi)

Black empowerment is not just about schemes to help black businessmen and black farmers. Most of all, it is about rules requiring all businesses to have at least 25 per cent black ownership (preferably 51 per cent ) and as many black directors, managers and suppliers as possible. Inevitably, this means businesses having to hand over large chunks of their equity for low prices. But the policy also requires a careful counting of every category by race — yet racial classification is supposed to have been abolished. Moreover, many black shareholders, having received their shares at sub-par prices, quickly cash them in for a quick profit. This leads to government demands that the companies now “empower” another set of black shareholders to bring them back up to the 25 per cent level, while the companies indignantly reply that they cannot keep giving away their equity.

Black empowerment is so politically correct that few want to stick their heads above the parapet. Yet business universally sees black empowerment as a tax on investment and it is a powerful disincentive for foreign investors. Additionally, of course, most of the black empowerment bonanza has gone to a few politically well-connected members of the elite, the most successful of them all being Cyril Ramaphosa who has amassed a fortune of $425 million from a standing start 20 years ago. Yet no new product or services or even any particular company is associated with him, and nor does he possess any special entrepreneurial skills. Instead, he has had multiple directorships and has benefited from many favourable share deals in other people’s companies.

The post-apartheid dispensation works well for the new black elite but offers no advantages to most blacks and is directly harmful to South African society as a whole. What it means is that South Africa, like most other African countries, is really run for the benefit of the small black bourgeoisie — perhaps a quarter of a million people in a population of 57 million. This perspective informs almost everything about the country. For example, South Africa gains high marks from UN agencies for equality of women because it has many women MPs (mainly just voting fodder on the ANC list), yet this tiny elite is absurdly unrepresentative. South Africa has one of the world’s highest rates of rape and violence against women, three-quarters of black families are headed by a single woman and they seldom receive any support from their ex-husbands. In real terms the plight of black women is abysmal. They are the true heroines of modern South Africa, holding together whatever is left of the black family.

For the whites South Africa remains a beautiful, sunny and exciting country in which to live — and the country still depends heavily upon them. Their numbers may be down by 20 per cent in the last 20 years but they still pay an overwhelming share of taxes, grow virtually all the food, manage almost all the big companies and run the country’s top schools and universities. They are, in African terms, South Africa’s great competitive advantage — yet they are also reviled, endlessly reminded of their past sins and have learnt to keep their heads down. Instead of confronting their accusers most of them busy themselves with private life, making money, sport, philanthropy and, often, a passionate concern with the country’s environment and threatened wildlife.
View Full Article
July 27th, 2018
8:07 PM
I regret things are worse than RWJ reports. The corruption and sheer incompetence at every level, has even led the majority of municipalities to be totally dysfunctional and bankrupt. Those residents up-to-date with their rates and taxes and utility bills often find the water or electricity cut off to the entire community because their local council hasn't paid for the electricity or water to the bulk supplier - but they collected the money from the residents which they have stolen or misappropriated. The money set aside for maintenance of infrastructure such as sewage works etc has 'vanished' and they then allow raw sewage to flow into the rivers causing major pollution, the fish and birds die and even the trees along the banks die (eg. Vaal river) Everybody suffers, Black, White, rich and poor. Cry the beloved country.

July 1st, 2018
12:07 PM
The SACP must be over the moon. Heroic effort brings great reward. Tough on the ordinary folk. 'Twas ever thus.

May 3rd, 2018
7:05 AM
I have never read a more accurate analysis of South Africa, and indeed, Africa as a whole. If a South African leader who can implement the structural changes required is not elected within the next five years, SA will be doomed to the same future as most other African countries, especially Zimbabwe. What a pity this will be.

Michael Coulter
April 19th, 2018
9:04 PM
Most insightful. Thanks for writing this.

April 19th, 2018
8:04 AM
In response to "Anonymous" 16 April 9.04 "Apartheid regime caused a much greater genocide. Its rule resulted in millions of black South Africans, mainly infants and children, dying of starvation because they were deprived of food" I would dearly like to know where and when these death occurred

Keith Phillips
April 19th, 2018
3:04 AM
I sadden at this having experienced the Zimbabwean collapse. I fear that the starvation that is coming to SA will eclipse anything that has happened in the past as the outflow of capital and capability in the sector collapses food production. Forget the past. Rescue the future.

Rob Bass
April 18th, 2018
5:04 AM
RW Johnson has summarised the South African situation perfectly. It's impossible for me to challenge any one of his statements. Life for all SA inhabitants, except the black elite, will become more difficult in future. Dependent upon one's age & energy level, it is either a country with unbounded opportunity or one from which those capable should emigrate sooner rather than later.

April 17th, 2018
4:04 PM
Very balanced but not touching on Malena and his extremists. On land expropriation : This will certainly lead to famine as it has done in the rest of Africa. When you combine that with the well meaning Australians that want to speed up visas for white South African farmers, it certainly will happen. HOWEVER, the well meaning Australians( I love them) should keep in mind that this will just antagonize the SA Government and they now “have to be right” and stick to their policies just as the Apartheid regime did when sanctions were imposed. Angry people do not make sane decisions. Angry people break and destroy without pain initially to themselves. Have you ever hurt yourself in a moment of anger?....Did you feel it? Afterwards, possibly when you saw the blood! What we need is diplomacy and communication, showing respect and gradually educating so that we can arrive at a common, sane, reality. Don’t vent your anger and antagonize. It serves no purpose. And. Also, don’t antagonize inderctly by offering help via the media. Wage a private war in private and keep the sensationalist media out of it, please! P.B.

April 16th, 2018
9:04 PM
While Thabo Mbeki deprived black South Africans of retroviral drugs the Apartheid regime caused a much greater genocide. Its rule resulted in millions of black South Africans, mainly infants and children, dying of starvation because they were deprived of food.

April 13th, 2018
3:04 PM
There is much truth in this piece but it gives white South Africans a free pass.They have white Messiah Syndrome deeply embedded—most senior positions in companies are held by whites not because they are more competent but because most whites have refused to change and embrace meritocracy. The decisions are made in secret white laager committees—so nothing has changed from Johan Anthoniszoon "Jan" van Riebeeck’s days.

Post your comment

This question is for testing whether you are a human visitor and to prevent automated spam submissions.
More Dispatches
Popular Standpoint topics