By Andile Mngxitama
This is the text of the keynote address delivered by Andile Mngxitama on 08 March 2017 in Durban at the launch of the Black Business Campaign of the National Funeral Practitioners Association of South Africa.
We are black before we are business men and women. This means our first responsibility is towards race and then to business. Business schools teach that profit is everything in business. This is true only if you speak from a white perspective. The responsibility of an oppressed people is different from that of a liberated people.
If your premise is that black people are free, if you accept 1994 as the point of liberation, then of course you can attempt to free yourself from the burden of race, the burden of blackness. From this perspective, you can link up with white business and mess up black people – under the fiction of competition or meritocracy – because you are color blind and move from the premise that we are all equal and that the historical accounts have been settled.
Many black people who have tried to delink themselves from the race question by virtue of imagined or real individual brilliance etc, are confronted sooner or later with the reality of whiteness which rudely reminds them of the fact of their blackness. There are too many examples throughout history of this phenomenon. We must not be too harsh on our brothers and sisters who believe they have made it in life by abandoning their blackness. Its hard being black! When they are disappointed by whiteness, we must welcome them back home with open arms. There must be no permanent grudges amongst blacks.
People like sister Lindiwe Mazibuko, are our people. The good brothers and sisters who will soon be following her, are our siblings. Those brothers and sisters who think its strategic to give political power to whites in their fight against other blacks, they too, when the time comes, let’s open our arms and welcome them back home into the black block.
My main message tonight is that there can be no sustainable black business in the condition of oppression. As long as black people are oppressed, it’s impossible for black business to thrive. An oppressed people is in no position to do business. Business is essentially about equals entering into exchange governed by shared rules. When the unequal do business it must correctly be called robbery. I will return to this question in a moment.
Saying that “an oppressed people is in no position to do business”, does not mean that there can be no pockets of success. Often these pockets of success are permitted by white business. They let you thrive up to a certain point so long as you don’t threaten them economically or symbolically. If they feel threatened in anyway, they then cut you down.
Let me tell you the story of my father to drive this point home. My father was a successful breeder of pedigree white pigs. He was a farm worker under apartheid. His animals were better than that of most white piggery farmers. Whites used to come to our home to buy young male pigs. But my father was an oppressed person. He had no land or rights. The number of pigs he could keep was determined by what the white farmer, for whom he worked, permitted.
My father could not present his animals at the monthly auction in town. He had to be represented by a white farmer who pretended that the animals were his. Often they would collude – yes, collude is the right word – to rob my father through crooked bidding. A proud black man, my father would refuse to accept the prices and tell his proxy not to sell. His pigs would come back home. Yet we needed the money. The point I’m making is that an oppressed person is already constrained from trading freely.
I’m sure many of you can already relate this to your own business environment and either confirm or refute my thesis and empirical evidence. You are not trading in pre-1994. This is a central question. You shouldn’t be having the same business experiences as my father who did business under apartheid.
This then presents the question – did 1994 bring liberation? If it didn’t, what then did it bring? How do we characterize the post-1994 moment? What are the opportunities and constraints presented by the post-1994 moment?
The underlying proposition of my argument is that 1994 didn’t signify liberation. What it did do at best, was to create new conditions to escalate the battle. The “sellout” vs “revolutionary change” options are too simplistic. We can say that 1994 was a tactical retreat. It was about regroupment, not about the arrival. There was a stalemate, we couldn’t march to Pretoria carrying the AK47. The regime of PW Botha up to that of FW de Klerk couldn’t rule freely. Blacks were in the same position as the Afrikaner in 1994. The calculation of the ruling class was to give us an empty shell – political power without power – that’s why they even changed the political system of South Africa (SA) from a “parliamentary sovereignty” to a “constitutional supremacy”. This means that your majority means nothing if it doesn’t conform to the dictates of the constitution which in turn ensures white privileges.
This proposition “1994 changed fokol” is borne out by facts. Twenty three years after democracy, lets take a sample:
1. 35 000 white families own 80% of the land. It will take us 100 years to redistribute only about 30% of the land through the current policies.
2. Only about 8% of the land has been bought since 1994. We spent more than R50 billion buying stolen land!
3. Blacks own only about 3% of the Johannesburg Stock Exchange (JSE).
4. A study released two days ago showed that blacks control only 5% of the Asset Management Industry. I will return to this for illustration.
5. Of the top 50 mining companies, only 4% is black owned.
The tragedy is that there are some within the ruling party who have turned the tactical retreat of 1994 into a strategic vision – the arrival. These are the people who never tire to tell us about what the constitution says: the people who are protectors of the constitution and the so-called corruption busters. Let us for a moment suspend the fact that these are the defenders of real corruption in SA, who are only now beginning to understand how white monopoly capital has not stopped looting.
People like Jackson Mthembu and Derek Hanekom have serious amnesia about the fact that in SA there is no bigger sin than land theft that black people have suffered! So the 1994 historic compromise was not the arrival but a tactical retreat for regroupment. Today, the army is black, the police service is black, the secret service is black. This is a real achievement but we still do not have real power. The ruling class is still in power and in control of the state. The ruling class is not a politician. Such a suggestion amounts to bad social theory. The ruling class constitutes those who own the means of production and consequently controls the superstructure (politics, culture, media, knowledge production, law). The state was captured in 1652 and this capture was entrenched in 1948! 1994 didn’t mean the end of the hold of the ruling class on the state.
What is the state? The Marxist view of the state that it “is the executive committee for the managing of the common affairs of the bourgeoisie”, is the most accurate. Who is the bourgeoisie/ruling class in SA? It remains the same – it is white settler monopoly capital which controls society. Let’s be specific, white monopoly capital (WMC) is white people!
It’s not an abstract system. It’s real people and families – people like Johann Rupert, Nicky Oppenheimer, Christo Wiese and their trusts. This is the ruling class. They decide if you can have a bank account or not, if you are going to jail or not? They even decide who must be Minister of Finance. They are the ruling class, not the politicians.
Karl Marx somewhere makes an important point that is worth repeating. He said that
“[t]he dominant ideas in any society are the ideas of the ruling class”. Who is corrupt? What is corruption? State capture? These are the discourses generated by the ruling class so as to entrench itself and to remove the focus on its looting. Black First Land First’s (BLF) focus is on white capital so as to expose its real nature. The campaign of “ABSA must pay back the money” is an example of BLF’s focus on white capitalist corruption.
Twenty three year later and the 1994 deal can no longer stick. The black majority wants real change. The ruling class wants another detour. They have tested the system. The political arrangement of Johannesburg, Tshwane and Nelson Mandela Bay metropolitan municipalities is the political future of the nation. There is a push back by white capital through its agents outside and inside the ruling party. The figure of President Jacob Zuma is seen as problematic. They want a more pliant replacement and they want it now – just like in Brazil.
Let’s reiterate. Whites own South Africa and the state. This essentially means that they own the economy.
Let’s go to President Zuma’s State of the Nation Address (SONA) to show who actually benefits from the state. President Zuma revealed a commitment by government to use a combination of instruments so as to contribute to economic liberation. In particular, the president pointed out that the government would “utilise to the maximum, the strategic levers that are available to the state”. To this end, the president named amongst others, the utilization of “legislation, regulations, licencing, budget and procurement as well as Broad Based Economic Empowerment charters.” These instruments aim to “influence” the conduct of “the private sector and drive transformation”.
The most important details revealed by the SONA, which the media downplayed completely in the quest to divert attention away from the political direction given by President Zuma, is the fact that the South African government spends a whopping R500 billion a year on procurement of services. Check that again – R500 billion! This figure excludes the R900 billion spent on infrastructure.
All this money is spent on white companies! Take the South African Airways (SAA) – it spends R24 billion annually on procurement, 98% of which goes to white business! Black owned companies only get 2% of the procurement budget spent! This is reflective of the true pattern across all State Owned Entities (SOEs). Similarly, Eskom is fighting to bring in black business into the supply of coal but this has been resisted by white monopoly capital which has the support of the Minister of Finance, Pravin Gordhan and the former Public Protector Thuli Madonsela.
The big stick in the hands of the state within current constitutional means, is to use its own buying power to drive economic transformation. The regulations which were gazetted on 20 January 2017 “making it compulsory for big contractors to subcontract 30 percent of business to black owned enterprises” is too timid, too little, too late! Why is the state not making the direct black stake in all big contracts to be 50% Broad-Based Economic Empowerment (BBEE)? Why are blacks put in a position of subcontracting from white monopoly capital? What about a target regarding direct procurement by black owned entities?
Let us take the situation of Asset Management as a further point of departure. I prepared slides from the recent Black Economic Empowerment (BEE) Economics Survey for 2016.
Download the slides here: the black asset management industry-2
Here are the highlights of the 2016 survey (as at 30 June 2016) on the black asset management (AM) industry:
1. Black asset management universe is made up of 41 black AMs
2. The 41 AMs have a collective AUM (asset under management) of R400 billion out of an industry asset base of R8.9 trillion, which means all 41 black AMs collectively manage 4.6% while the other 95.4% is managed by white AMs.
Note: most of these black AMs are not wholly black-owned, black ownership is 50% in most cases, so there’s double dipping from whites.
3. There’s more of a growing concentration of black AMs in Gauteng than in Cape Town, but Cape Town has a higher AUM base than Gauteng. Asset management is split between these 2 cities: JHB and CPT
4. Of the 41 Black AMs, 21 are said to be profitable under the period of review.
5. There are 68 black portfolio managers with more than 5 years experience. Portfolio Mangers are people who actually manage the money and decide which financial instruments to buy.
6. The top 5 black AMs (by AUM) are: Taquanta, Aluwani Capital (a very new entrant), Kagiso, Mazi Capital, and Argon. These 5 black AMs manage 70% of that 5% slice.
7. The overall size of the savings and investment industry is R8.9 trillion, apportioned as follows:
– 2.6T on Long Term Insurance
– 4.4T on Retirement Funds
– 1.9T on Collective Investment Schemes
So this means that most money is tied up in Retirement funds. And take note that PIC (public investment corporation) manages 40% of that 4.4T through the GEPF (government employee pension fund).
GEPF is the largest fund in SA with an asset base of 1.8T, and is managed by PIC which is run by Daniel Matjila and chaired by the Deputy Finance Minister. Interestingly, the PIC gives a lot of its mandates to the very white AMs. So they have less confidence in black AMs. A report on the actual numbers would be interesting.
8. The black AM industry gets 80% of its AUM from institutional investors (retirement or pension funds mostly). The retail sector is still highly dominated by white firms.
9. Coronation (a white AM) manages R600 billion alone (which is more than what black AMs manage collectively) – we have not factored other big players like: Investec, Old Mutual, Sanlam, Prudential, Momentum, Stanlib, ABSA, Nedgroup, RMB’s Ashburton, Foord. Collectively, the white AMs manage a whooping R8.5 trillion, that’s 95% of total industry size.
The question is how do we correct this grotesque image.
How do we turn this around? First thing is to remember that we cannot do business whilst in bondage. This means that a black business person is a revolutionary first!
You have to seek systematic change in the broader political and economic system in order to be sustainable. All efforts must be directed towards this outcome. Your business ethos must be black first and revolutionary. Every transaction must be guided by the principle of whether this decision contributes to the liberation of black people or not – does it empower black people or not?
In this quest for business excellence, we have to have our prioritise right. Buying black within an economy which is white owned, makes us mere salesmen and women of white owned goods. There was recently a good initiative by blacks in the book publishing industry. They set up a real big Book Fair in Soweto. The originators of the event wanted to “decolonize” literature. The authors invited were all black, but their books were published by white companies. And so we end up fronting for white business because we are not free.
The story of Onginga Odinga, as told in his memoirs “NOT YET UHURU”, is instructive. Odinga was a teacher in colonial Kenya who thought he could bring dignity and a sense of pride to his people through growing their own businesses. He started from scratch – getting people involved in building warehouses and in other such amazing business ventures. The peasants saved money to invest in these business ventures. The colonialist didn’t like this. They simply destroyed these businesses and buildings built from sweat and blood. Odinga had to take the AK47 and join the Mau Mau rebels.
Another story I really think we need to repeat is that of the “Black Wall Street”. Blacks had built themselves the most affluent community which was self-sufficient in Oklahoma, USA. Schools, hospitals, golf courses were built. Then in June 1921 whites erased this grand achievement with bombs and fire. They erased the “Black Wall Street” and murdered over 300 black people! If you are not free, your economic success can lead to your murder!
This realization makes the black business person necessarily a revolutionary who wants total change, not just for themselves but for the entire black population. That is why we need to understand the full on attack on patriotic black managers like Hlaudi Motsoeneng, Brian Molefe and Dudu Myeni. Whites want them silenced! They want them punished as an example to all of us, as to what will happen to any black person who speaks up. They will erase your reputation, use their media and render you corrupt and captured. This is terrorism to silence us. But if we understand that this is war – its us against them – then we shall understand the need for “peace amongst blacks”. We must unite completely like a people in war do. Our collective survival depends on it!
The battle that shall end all our suffering is the land battle.There is nothing as fundamental as the return of the land. To defeat the ruling class which controls our lives, we have to return the land. President Zuma has given a clear direction on the land question. His call of land expropriation without compensation must be made a reality. It is the most important calltoday for all of us. The President has done something even more important than anything done by the any other President since 1994. Presisent Zuma has called on all black political parties to suspend their differences and unite to return the land. This call must be given the fullest support we can afford. We must not allow this call to fizzle out. We must take it everywhere and push for it, highlight it!
Black First Land First (BLF) is in support of the call made by the KZN ANC Chairperson, SihleZikalala, for a Referendum to return land without paying for it. BLF is also calling for a multi-party National Land Imbizo in May this year. This is in support of the return of the land as pronounced by the President. We call on all to support this call and to isolate the reactionaries, such as Derek Hanekom, who are telling us to buy back our land. The land belongs to us. The National Land Imbizo must send a clear message to the ANC policy conference that its land or nothing!
A black business must operate like a liberated territory in the middle of an armed struggle. Black business must give oxygen and sanctuary to the revolutionary process. It must foster black unity. Black business must be brave. It must be aggressive. It must not be afraid. It must sacrifice. But most importantly, black business must love black people.
This is not charity. Our collective survival depends on it! The Afrikaner did it for their people. Within 40 years they exterminated poverty in the white community. Furthermore, they built Afrikaner businesses and cultural empires! We are half way through the 40 years mark and we haven’t started because we have no BLACK AGENDA!
I hope your new campaign can be the start of building a real Black Agenda. We have to be unapologetically black. You have to be clear and calm. Ask your brothers and sisters of “Indian” descent, are they with us or are they with the whites? Are they with us or are their souls in India? If they are not with us, then we shall have nothing to do with them. But if they are with us – if they remember our collective oppression and exclusion – then they would show it by deed, and we can together march to a new dispensation where freedom shall be real!
We wish you all the luck in your endeavours to build a solid black business community which shall put black liberation before profits!
I thank you!
Andile Mngxitama is the National Convener of Black First Land First