The impact of these colonial policies left a devastating mark on the development of African people and their participation in the mainstream economy. Photo: Oupa Mokoena/African News Agency (ANA)
The impact of these colonial policies left a devastating mark on the development of African people and their participation in the mainstream economy. Photo: Oupa Mokoena/African News Agency (ANA)

We need to de-colonise state-owned institutions, BBBEE just isn't enough

By Phapano Phasha Time of article published Jun 26, 2020

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JOHANNESBURG – When the Republic of South Africa was formed in 1910 as a piecemeal agreement between Afrikaners and the British, more than 1 000 oppressive and repressive laws and by-laws were legislated by both the British and Nationalist government which ensured the deliberate exclusion of the Africa majority in the mainstream economy.

The impact of these colonial and Apartheid policies left a devastating mark on the development of African people and their participation in the mainstream economy.

Such laws included ‘The Native Land Act of 1913’ which legalised the dispossession of African land to White people. The Industrial Conciliation Act of 1924 which excluded Africans from entering into apprenticeships. The Job Reservation Act and the Mines and Work Act of 1926 made certain categories of work for Whites only.

The Native Administration Act of 1927 which allowed the Governor-General of South Africa to banish individuals or a group of Black people from any land whenever it was deemed expedient or in the public interest. The Native Service Contract Act of 1932  which made it a criminal offence for Africans to leave the mines or farms without their employers' consent (Horrell 1977; Robertson 1986 and Williams 1989). This laws also included “more than 80 Acts of Parliament aimed at assisting the white commercial farming so that they would never face any competition from the African farmers”.

To give life to these laws, White power created what Tim Cross described as the “Afrikaner nationalists colonized state institutions” such as The Industrial Development Corporation which became captured and colonised institution whose mandate was to control the South African economy and advance White business interest. In his seminal paper titled ‘The Afrikaner takeover: Nationalists Politics and the colonisation of South Africa Parastatals, Tim Cross elucidates that “The IDC was clearly the ideal institution for the National Party to capture, concerned as it was to increase Afrikaner control of the economy and advance the interests of Afrikaner businessmen. These helped to create the circumstances in which full Afrikanerization of the institution took place”.

Post 1994, the question that all well-meaning and progressive South African’s should ask is if whether state-owned parastatals and financial institutions like the IDC which were formed by the Broederbond to consolidate the participation of Whites in the mainstream economy and to capture the entire economy has transformed. 

The questions on cultural change or lack thereof at institutions like the IDC will help us explore why the IDC can spend “R42 billion out of R72 billion of funding over the last five years towards black-empowered and black owned companies” whilst structural and socioeconomic inequalities continue to escalate and African poverty and unemployment continues to rise. It will help us to unpack this “blackness”, since black also includes Indians, South African Chinese and B-BBEE fronters.  

Whom are disbursements from the IDC and other state-owned financial institutions really benefiting when data on economic beneficiation is on the contrary  and when reports such as the 2015 New World Wealth report confronts the uncomfortable reality that whilst BEE and Affirmative Action policies were working to change historical imbalances, black Africans were not the ones mostly benefitting but the Indian race?

The report states “while BEE and AA policies are working, they are abnormally benefiting the Indian community. When one considers the Indian community now makes up 14 percent of local South African millionaires, but only 3 percent of the national population.

According to Pravesh Naidoo who is an independent Market observer ,“The Afrikaner has tried on more than one occasion to get rid of the Indian Nation in South Africa but found them to be largely  manageable and docile: but more importantly useful against the local African population  as a buffer  nation between Whites  and the African population. Mr Pravesh goes further to assert that this relationship must be understood beyond economic exchange between the two nations but shared genetic history which dates back to 1679 when Simon Van Der Stel whose mother was an Indian woman and whom Stellenbosch is named after became the First Governor of the infamous town.

The late ANC stalwart and world renowned economist Vella Pillay was not also not shy to admit in his interview with Padriag O Malley in 2002 that Indians even during apartheid “were driving towards acquiring the rights to become very rich capitalists, because they came from a  class of businessmen and the South  African government in those days began to impose restrictions on the right to own land, the right to own certain industries and therefore became  highly political in fighting for those things because they had  support  from the Indian government.

What is evident is that the economic transition of South Africa since the advent of colonialism and apartheid has  been contextualised around  State and institutional Capture by the minority which the African National Congress has failed to break or reform.

The history of this institutions makes it convenient to comprehend what the chief executive of the dti, Tshokolo Nchoncho, meant when he said the dti does “not hold a steadfast belief that they should choose those that they support on the basis of black and white”, even though South Africa is still  “country of two economies”.

A 2019 report titled ‘Overcoming Poverty and inequality  in South Africa” by the World Bank led by Victor Sulla, a senior economist at the World Bank Southern Africa, states that, “The country was very unequal in 1994 and now 25 years later South Africa is the most unequal country in the world”.  Such reports from the World Bank, local and global institution on wealth distribution and income inequalities proves that the is something functionally wrong with our intervention measures and instruments such as the DTI, which seems to be linked with the pervasive historical White culture that is not interested in transformation. 

It therefore  begs the question if deployees in the ANC led government, such as Tshokolo Nchoncho internalise reports by such institutions, local and global institution on economic inequalities, which continue to paint a very disturbing picture about lack of transformation in the country and the  deliberate marginalisation and exclusion of the African majority in the ownership of the mainstream economy.

South Africa thus suffers from monumental racial economic inequalities that have created a pool of wealth amongst a minority whilst committing a majority to a cycle of poverty. In the absence of legislation and policies to repel draconian apartheid laws and economic reparations to address centuries of social and economic injustices meted out against the African majority, what is left is for the people to become their own economic liberators. 

Therefore, broad based economic initiatives in this country whose ideas were primarily sponsored by the Brenthurst Foundation were set for failure from the onset and to perpetuate economic State Capture by the White minority using Indians and the new African petty bourgeoisie as a buffer.


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