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Fresh impetus
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Larry Claasen
Financial Mail
Friday, February 19, 2010
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"It's a very positive budget," BEE Institute CEO Leila Moonda.
It embraces transformation and also focuses on fostering economic growth, she adds.
Some areas - such as the development of small businesses and the lack of incentives to buy local products - were neglected, but overall Moonda says she is happy with the direction of the speech.
Finance minister Pravin Gordhan concentrated on often forgotten aspects of empowerment, such as enterprise development and skills transfer, she says. These not only eliminate inequality in society, they also build the country's economic base by increasing the number of economically active people, she says.
Moonda also supports Gordhan's effort to tackle the worrying issue of unemployment among a growing number of young people. Government plans to introduce a programme which will reimburse companies for the cost of employing first-time job seekers for two years. "Our preliminary estimate is that about 800 000 people will qualify. The aim is to raise employment of young school-leavers by a further 500 000 by 2013," said Gordhan.
Moonda says that by looking at areas such as enterprise and skills development, rather than just concentrating on ownership of businesses, government is showing it wants empowerment to become more broad-based.
The tendency to look only at who owns the business has given rise to "tenderpreneurs" - business people who make money by winning state tenders and are unable to compete in the private sector.
The change in focus is not a total surprise. Government has acknowledged that it was falling short when it came to black economic empowerment. Deputy president Kgalema Motlanthe admitted as much at the launch of the Broad-Based Black Economic Empowerment Council earlier this month.
Government's changing mood on ownership is reflected in the fact that is is ending its funding of the National Empowerment Fund.
Moonda says the move to stop funding was always on the cards but the pressure brought by recession made it inevitable. The fund will be winding down in the next few years but black economic empowerment may move into another phase.
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