Our laws are not racist… they are empowerment laws meant to redress the imbalances of the past.” Cyril Ramaphosa
There is a war of words taking place on Social media between Elon Musk and Cyril Ramaphosa over Starlink not being able to launch in SA due to BEE laws. Handing over 30% ownership in order to launch Starlink in SA when it is needed makes no sense when it will help provide employment in a country that has upwards of 60% unemployment.
The BEE or Black Empowerment Laws in South Africa were designed to benefit those that had previously been disadvantaged, but like anything that has money involved manipulation and corruption will be at the head of the list.
One of the companies I was involved with had a BEE director and he was removed after around 18 months as the benefits were not forthcoming and was a drain on the companies finances. BEE is meant to add value through opening up government contracts and again only a few will benefit and is never a level playing field.
Whilst the masses have not benefitted from BEE policies there are an elite few who most definitely have. Many have benefited from receiving jobs due to race laws but this cannot be confused with BEE which is more about ownership and where the real wealth lies.
Cyril Ramaphosa who is the President of South Africa and has been one of the top few along with his family members to truly benefit. Right place right time and also the person who was in charge being the Chairman of the BEE Commission in 1998 and the one who helped shape the various policies now in place. Cyril being in such an influential position gave him the head start over everyone else allowing him to cherry pick the deals first.
There is talk of the top 100 elite black families in South Africa who benefitted the most and have "stolen" the BEE deals so the share or reform that was meant to address the past imbalance did not take place.
A recent report highlighted that 46/47 families took the lions share of the mining deals making them billionaires or multi multi millionaires. these would not have been the workers on the mines, but families who were connected within the political system and would be supportive of the ANC party.
If we take a look at the top individuals it is easy to see how they received their wealth.
Cyril Ramaphosa sits at the top of the list having set up an investment fund in 2002 named the Shanduka Group that plundered it's way through business ownership. Cyril had the McDonalds franchises in SA having all 145 outlets under his ownership for a 20 year deal. This was sold off to a Dubai based company so as not to attract attention due to his political interests. Cyril also owns 1.2% of Standard Bank reportedly worth R6 billion which was all down to BEE deals.
PATRICE MOTSEPE is the number 2 on the BEE list and not a shocker as he is the brother in law of Cyril. Patrice is reportedly worth $1.8 billion and is involved with WEF. His biggest money spinner that set him on his way was a deal with Sanlam (Insurance and Investments). His R200 million investment in the BEE deal generated R8 billion so a 40 x return.
BRIDGET RADEBE sister of Patrice and married to the Minister of Energy has been involved in many mining deals. First black female mining entrepreneur is her fame and "entrepreneur" should be loosely labelled as would she have been able to get these deals done if she was not so well connected?
The list goes on and on and what is a common theme of this family list is that all were members of the ANC party and were politically connected. Most had trade union backgrounds and were in positions of power holding ministerial position in the ANC. Family members benefitted from the positions of their relatives with a recurring theme is that the same individuals are involved in multiple deals with many deals having limited investment or no investment required so the deal was a gift.
BEE could have helped transform the SA economy if it had been implemented correctly and failed due to the same individuals being recycled through the majority of the deals. The R1 trillion figure used benefitted fewer than 100 families which is a crime in itself and why the same individuals keep on pushing for BEE to remain relevant as they are the ones who have the finances today to invest and earn even more.