Sunday 25th Jun 2017

Lameez Omarjee, Fin24 -
 
Johannesburg – White businesses must champion economic transformation, said Finance Minister Malusi Gigaba.

Gigaba was speaking on radical economic transformation at an engagement hosted by the Black Business Council (BBC).

“The economy of today still reflects our colonial and apartheid past,” said Gigaba. “We need white businesses to champion transformation and view it within the commercial interest of business,” he explained.

This should be in the form of collaborations to support black-, women-, and youth-owned business.

“The most difficult challenge of our time is to transform the South African economy and to grow it inclusively,” said Gigaba. He highlighted that the economy was highly unequal and monopolised, with low competition and high barriers to entry. He said that there are high concentrations of wealth, exclusive on the basis of race, gender and class.

The inability to transform the economy leaves the poor vulnerable to its shocks. “It is only because black dispossession is normalised in society, that some are offended and shocked by the call for radical economic transformation,” said Gigaba.

He said that if the realities of living in townships and rural areas was understood, then there would be no shock at the call for transformation.

Gigaba reiterated the importance of changing the economy fundamentally and not just superficially. He pointed out that policies and programmes that respond to economic needs are necessary.

Part of the solution lies in beneficiation of raw materials, he explained. Further, South Africa should be integrated globally as an exporter of “high value added goods”. The country should take lessons from emerging markets like China and South Korea with thriving manufacturing industries.

In South Africa the manufacturing sector only accounts for 12% of GDP, this is low compared to China (32%) and South Korea (31%). Policy intervention is needed to support industrialisation, said Gigaba.

The minister also mentioned the importance of revising state procurement to help develop black business. Transformation extends beyond share ownership and should make provision for support for black entrepreneurs to thrive. “Growing black business is good for South Africa.”

Gigaba also pointed out that the creation of decent work would help deal with the challenge of poverty and inequality. “Stable and secure employment and fair labour practice will help uplift people from poverty.”