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Prospects for the Development of a Black Business Class in South Africa

Published online by Cambridge University Press:  11 November 2008


The growth of business classes in Africa has attracted much interest since the 1980s when, in the context of severe economic malaise, the impact of the state on development was subjected to critical reappraisal.1 Out of this emerged a consensus that the abysmal economic record of the 1960s and 1970s could, to a large degree, be ascribed to the debilitating effect of an overstretched and swollen state. Official development thinking took this argument the furthest: at the core of the problem, it was asserted, was the expansion of the state's rôle from the preferred minimalist function of providing the legal and macro-economic regulatory framework for capital accumulation, to a more profound intervention in the productive process. As a remedy, the state would have to be restrained from usurping the primary rôle which the market's invisible hand ought to be playing.2

Copyright © Cambridge University Press 1996

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1 See Lubeck, Paul M. (ed.), The African Bourgeoisie: capitalist development in Nigeria, Kenya, and the Ivory Coast (Boulder, CO, 1987);Google ScholarMacGaffey, Janet, Entrepreneurs and Parasites: the struggle for indigenous capitalism in Zaire (Cambridge, 1987);Google ScholarBiersteker, Thomas J., Multinationals, the State, and Control of the Nigerian Economy (Princeton, 1987);CrossRefGoogle ScholarKennedy, Paul, African Capitalism: the struggle for ascendency (Cambridge, 1988);Google ScholarBerman, Bruce and Leys, Colin (eds.), African Capitalists in African Development (Boulder and London, 1994);Google ScholarHimbara, David, Kenyan Capitalists, the State and Development (Boulder and London, 1994);Google Scholar and Forrest, Tom, The Advance of African Capital: the growth of Nigerian private enterprise (Edinburgh, 1994).Google Scholar

2 See World Bank, Sub-Saharan Africa. From Crisis to Sustainable Growth: a long-term perspective study (Washington, DC, 1989), pp. 910, where it is argued that ‘highly inefficient industrialization’ in Africa has been the result of earlier efforts ‘focused on state-led creation of capacity without adequate regard to cost or markets’, and what is therefore needed is the ‘fostering [of] African entrepreneurship’ because ‘The private sector holds the key to future industrial growth’.Google Scholar

3 Greenblo, Allan, ‘Expedient Structures: black investors achieve control with use of establishment funds’, in Finance Week (Johannesburg), 21–27 07 1994.Google Scholar

4 According to Mamela, Sandile, in The Sunday Independent (Johannesburg), 23 07 1995, p. 25, ‘The so-called new establishment of black entrepreneurs is just a tool of the old establishment and a danger to us all’.Google Scholar See also, ‘Black Business Empowerment a Sham’, in African Business (Johannesburg), 06 1995, p. 10,Google Scholar and ‘The Unbearable Brightness of Being Black’, in Die Suid Afrikaan (Cape Town), 53, 0506 1995, p. 20.Google Scholar

5 Shilowa, Sam, ‘Quotas are Not the Route to Black Empowerment’, in Business Day (Johannesburg), 25 03 1994,Google Scholar and ‘Black Economic Empowerment and the RDP’, in The Innes Labour Brief (Johannesburg), 5, 4, 1994, p. 7.Google Scholar

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7 Patel, Ebrahim, ‘Black Economic Empowerment: a trade union view’, in The Innes Labour Brief, 3, 1, 1991, p. 70.Google Scholar

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9 From a satirical piece by three consultants using the nom de plume John, Cecil, ‘How We Whites have had You for Suckers’, in Business Day, 26 July 1995.Google Scholar

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11 Biersteker, op. cit. pp. 115, 120, and 224.

12 Hoogvelt, Ankie, ‘Indigenisation and Foreign Capital: industrialisation in Nigeria’, in Review of African Political Economy, 14, 0104 1979, p. 62.Google Scholar

13 Republic of Kenya, Development Report, 1989–1993 (Nairobi, 1989),Google Scholar quoted in Himbara, David, ‘The Failed Africanization of Commerce and Industry in Kenya’, in World Development (Oxford), 22, 3, 1994, p. 478.Google Scholar

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18 Portfolio of Black Business (Johannesburg, 1993), p. 50.Google Scholar

19 Ibid. 1994, p. 243.

20 Ibid. 1995, p. 120.

21 ‘Fikile Bam: profile’, in Business Times (Johannesburg), 25 10 1994.Google Scholar

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26 The South African Directory of Black Managers, 1995, p. 30.Google Scholar

27 Drawn from profiles of the three most prominent black consultancies, Reuel Khoza's Co-ordinated Management Consulting, Eric Mafuna's Consumer Behaviour, and Don Mkhwanazi's TNS Management and Marketing Renaissance, in Enterprise 200: a survey of black business in South Africa (Johannesburg, 1994).Google Scholar

28 The South African Directory of Black Managers, 1994, p. 14, and 1995, p. 14.Google Scholar

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31 Interview with DrMabuza, Enos, Deputy Chairman of New Africa Investments Limited, Director of Metropolitan Life, South African Breweries, Anglovaal, Standard Bank Investment Corporation, and De Loitte and Touche, 13 December 1995.Google Scholar

32 Interview with Molobi, Eric, Executive Director of Kagiso Trust, Chairman of Kagiso Trust Investments, Kagiso Publishers, and Kagiso Khulani Supervision Services, and Director of First National Bank Holdings, Southern Life Association, and Telkom SA, 12 December 1995.Google Scholar

33 ‘Lot Ndlovu, Executive Director of the Nedcor Group’, in Enterprise, December 1994.

34 Interview with Magomola, Gaby, Deputy Chairman of Afrilink, 12 December 1995.Google Scholar

35 Interview with Erasmus, Jan, Founder and Executive Chairman of SegeAlliance, 30 November 1995, on his joint venture in XB Holdings with Moss Nxumalo.Google Scholar

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37 Haffajee, Ferial, ‘ANC Companies Run Into Cash Crisis’, in The Weekly Mail (Johannesburg), 9–15 07 1993.Google Scholar

38 Interview with Magliolo, Jacques, 11 July 1995.Google Scholar

39 Haffajee, Ferial, ‘Something Fishy about Thebe's Deal’, in The Weekly Mail, 11–17 June 1993.Google Scholar

40 Iden Wetherell, ‘The New Gatekeepers and their Golden Keys’, in ibid. 17–23 September 1993.

41 Interview with André du Chenne, Managing Director, Inland Region, Kagiso Khulani Supervision Food Services, 13 December 1995.

42 Interview with Njeke, Johnson, Managing Director of Kagiso Trust Investments, 11 December 1995.Google Scholar

43 Interview with Chenne, du, 13 December 1995.Google Scholar

44 Interview with Scholtz, Piet, Director of Kagiso Publishers, 19 December 1995.Google Scholar

45 Interview with Titi, Fani, Executive Director, Kagiso Trust Investments, 27 December 1995; also du Chenne, 13 December 1995, and Scholtz, 19 December 1995.Google Scholar

46 Interview with Egan, Mike, Managing Director of Stêr-Kinekor, 5 December 1995.Google Scholar

47 Interview with Chenne, du, 13 December 1995.Google Scholar

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49 African National Congress, The Reconstruction and Development Programme: a policy framework (Johannesburg, 1994), pp. 93 and 115.Google Scholar

50 A survey on affirmative action undertaken by FSA-Contact at the end of 1995 provides evidence of the seriousness with which capitalists are viewing the need to promote the advancement of blacks within their companies: the number in senior positions rose to 9·5 from 2·5 per cent in 1994 (with the proportion of whites falling from 95 to 87 per cent), while those in middle-management positions during the same period increased from 2·5 to 7 per cent. While blacks are proportionally still heavily under-represented, it is important to note that 90 per cent of the companies surveyed had implemented some form of affirmative action. Lunsche, Sven, ‘Fourford Rise in Top Black Managers’, in Business Times, 21 January 1996, p. 6.Google Scholar

51 Radebe, Tebello, ‘“Fine Balance” for Affirmative Action’, in The Weekly Mail and Guardian, (Johannesburg), 5 07–12 07 1996,Google Scholar and Innes, Duncan, ‘Government's Affirmative Action Green Paper is Fair, Flexible and Empowering’, in The Sunday Independent, 14 July 1996.Google Scholar

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54 Interview with Chenne, du, 13 December 1995.Google Scholar

55 Lodge, Tom, ‘South Africa: democracy and development in a post-apartheid South Africa’, unpublished paper, p. 8.Google Scholar

56 Interview with Chenne, du, 13 December 1995.Google Scholar

57 Interview with Moshopalo, 15 December 1995.

58 The Reconstruction and Development Programme, pp. 76 and 92.

59 Ramaphosa, Cyril of the ANC, quoted in Finanial Times (London), 28 07 1995.Google Scholar

60 See Matthews, Roger, ‘Business and Government Ready for Showdown’, in Business Day, 11 September 1995. A basic policy framework drawn up by the Department of Trade and Industry was submitted in September 1996 to the National Economic Development and Labour Council (Nedlac) for discussion.Google Scholar

61 Stewart, John, ‘Benign Discrimination: future competition policy will have to bend purist rules to allow companies previously restricted by race to catch up’, in Finance Week, 3–9 September 1994.Google Scholar

62 See ‘Appropriation Bill. Debate on Vote No. 24 – Trade and Industry, and Programme 2 of Vote No. 28 – Regional and Land Affairs’, in Hansard. Proceedings of the National Assembly (Pretoria), Tuesday, 23 08 1994.Google Scholar

63 Interview with Egan, 5 December 1995.

64 Portfolio of Black Business, 1993, sp. 129.Google Scholar

65 Interview with Egan, 5 December 1995.

66 Interview with Chenne, du, 13 December 1995.Google Scholar

67 Haffajee, ‘Something Fishy about Thebe's Deal’, p. 8, and interview with Magliolo, 11 July 1995.

68 Wetherell, Iden, ‘The ANC's Backing the Book Business’, in The Weekly Mail, 12–19 September 1993.Google Scholar

69 Interview with Nyhonhya, Litha, Joint Managing Director, Msele Corporate and Merchant Bank, subsidiary of Thebe Investments, 7 November 1995.Google Scholar

70 ‘Cellular Phone Industry: special report’, in The Financial Mail (Johannesburg), 8 10 1993;Google Scholar Maureen Sullivan, ‘Cellular Phones dividing the spoils’, in ibid. 29 October 1993; Maura Bidoll, ‘Cellular Telephones: free to shop around’, in ibid. 26 November 1993; Lisa Thornton, ‘Who'll Benefit from the Cellular Phone Fracas?’, in The Weekly Mail and Guardian, 8–14 October 1993; and Allan Greenbic, ‘Cellular Phones: a compromise for one is…’, in Finance Week, 26 October–3 November 1993.

71 Interview with Egan, 5 December 1995.

72 Davis, Gaye, ‘Politicians Opt to Police Themselves’, in The Weekly Mail and Guardian, 29 09–5 10 1995,Google Scholar and ‘How Good is Our Code of Conduct?’, in ibid. 31 May–6 June 1996.

73 Interview with Njeke, 11 December 1995.

74 Interview with du Chenne, 13 December 1995.

75 See MacGaffey, Jane, ‘How to Survive and Become Rich Amidst Devastation: the second economy in Zaire’, in African Affairs, 82, 328, 07 1983, pp. 351–66,CrossRefGoogle ScholarEntrepreneurs and Parasites: the struggle for indigenous capitalism in Zaire (Cambridge, 1987),Google Scholar and ‘State Deterioration and Capitalist Development: the case of Zaire’, in Berman, Bruce J. and Leys, Cohn (eds.), African Capitalists in African Development (Boulder and London, 1994), pp. 189204.Google Scholar

76 Hoogvelt, loc. cit. p. 57.

77 Himbara, Kenyan Capitalists, the State, and Development, p. 6.