An investigation of black economic empowerment and its impact on development in Namibia

Ganaseb, Ferdinand (2008-12)

Thesis (MBA (Business Management))--Stellenbosch University, 2008.


ENGLISH ABSTRACT: This study’s objective was to investigate what black economic empowerment (BEE) means to Namibians and what impact it has had on development in Namibia. The study also did research in South Africa for the purpose of benchmarking. Namibians in general understand and embrace BEE, but it is clear from the study that Namibians are highly skeptical about its impact in terms of empowering those who were previously disadvantaged. The purpose of BEE is to empower black people. The challenge, however, is that seventeen years after independence there is no policy yet on BEE in Namibia. Critics of affirmative action argue that it is not worthwhile empowering only certain groups of people and excluding the able-bodied, white male Namibians while the country has adopted the policy of national reconciliation, irrespective of what happened in the past. They argue that it would be fair to select people based on class, rather than race, gender or ethnicity. It is true that the picture painted so far on empowerment is skewed, but it is important to note that BEE is not about empowering the black elite or the middle class at the expense of those who really need to be economically empowered; it is about allowing every citizen of the country to participate fully in the economic development of his/her country. The research was conducted in Namibia and also partly in South Africa, as it used progress on BEE in South Africa as a yardstick. In Namibia, statements made by leaders in different sectors were studied and analysed, since there is no written policy on BEE. The study conducted surveys on businesses, including companies that have benefited from BEE, state owned enterprises, government institutions and small and medium enterprises. Individuals were also selected across the broad spectrum, of whom some were interviewed face-to-face and others through questionnaires. The study repeated the same process in South Africa, the only difference being that in South Africa it included study and analysis of policy documents. The aim of the study was to find out how far Namibia has gone in empowering its people and how this compares to neighbouring South Africa. The analysis was done in the following way: data from different sectors were compared and also assessed against targets set by different sectors or industries in their sectoral charters. Data from different industries in Namibia were also compared to similar industries in South Africa. In order to determine whether there has been any progress in terms of BEE since Namibia’s independence eighteen years ago, the results obtained during this study were compared to the figures that were available at the time of independence. The study has established that, although the Namibian government had set up a committee headed by the Office of the Prime Minister to come up with a legislative framework for the drafting and implementing of BEE policy in 2000, no such policy exists to date. All the companies included in this study indicated that they have submitted their affirmative action (AA) reports to the office of the Employment Equity Commissioner and that they adhere to this policy; yet the study has established that most of the companies do not adhere to the AA policy. There is a high degree of income disparity in Namibia, where the richest 10% of the population receives 65% of the total income. The study also found that Namibia does not have any shares in companies that were established after independence, especially in the mining industry, whereas mining is the backbone of Namibia’s economy. According to the findings of this study, with regard to the BEE agreements announced and signed so far, only those who already have wealth or are well-connected benefit from these deals. There is no controlling mechanism in place for BEE agreements and, as a result, companies choose who they want to do business with. In South Africa, the study has established, the majority of the companies have their own broad based black economic empowerment (BBBEE) policies and all the industries have either implemented or drafted their industry BBBEE charters. Although the government has laid down a good foundation for the rest of the institutions to build on, South Africa still has a long way to go, because the majority of its people are still living in abject poverty. The study established that people sitting on the committee to draft the BEE policy are permanently employed in other positions within the Government and when it comes to prioritizing jobs, BEE is not regarded as one of the most important topics. It recommends that the government appoint people on the committee either permanently or on a fixed-term contract basis, so that these people can concentrate only on drafting and implementing the BEE policy. In line with the annual AA reports submitted, businesses should submit annual BEE reports to the government. This would ensure that some efforts are made to address BEE and, as is the case with AA, most of the companies, if not all, should be required to appoint BEE coordinators in their structures to drive the process. It is also recommended that there must be a graduating system whereby companies and individuals who have attained a certain level with regard to BEE should graduate out of the system in order to give others a chance to benefit. Businesses that have never benefited before should get preference when awarding tenders and quotas. Lastly, the study recommends that the Namibian government create a fund to which all registered companies would be required to contribute a certain percentage of their profits. These funds would be used for skills development, since skills development and transfer are the most important components of economic empowerment. The study has found that many firms have good governance, they practice diversity, they are doing very well financially and their company policies also state that they reward their employees in an unbiased way; but that can, nevertheless, not be taken as a guarantee to success in BEE. There is a fast-growing middle class of black people in Namibia, but the most important thing for Namibia, however, is to determine how this middle class can contribute to the creation of wealth for the majority of Namibians. Although there are clear indications in South Africa that there is a strong presence of BEE, at least for middle class black people, much remains to be done to address the issue of poverty. Finally, there are government policies and legislations that were created to advance black people, but the success of these policies and regulations depends on the management strategies that can create a conducive environment for black people. The corporate culture in private and public institutions needs to change so as to accept and accommodate black people in order for them to make a significant contribution to the economic development of Namibia.

AFRIKAANSE OPSOMMING: Die doel van hierdie studie was om vas te stel wat swart ekonomiese bemagtiging (SEB) vir Namibiërs beteken en watter invloed dit op ontwikkeling in Namibië gehad het. Om ‘n maatstaf te stel het die studie ook navorsing in Suid-Afrika gedoen. Hoewel Namibiërs in die algemeen SEB verstaan en aanvaar, is dit uit die studie duidelik dat hulle hoogs skepties is oor die impak wat dit gehad het in die bemagtiging van voorheen benadeeldes. Die doel van SEB is om swartmense, vrouens en mense met gestremdhede te bemagtig. Die uitdaging is egter dat daar in Namibië sewentien jaar na onafhanklikheid steeds geen beleid ten opsigte van SEB is nie. Kritici van regstellende aksie redeneer dat dit nie verdienstelik is om sekere groepe te bevoordeel terwyl bekwame blanke Namibiese mans uitgesluit word nie.; dit terwyl die land ’n beleid van nasionale rekonsiliasie aanvaar het, in weerwil van gebeure in die verlede. Hulle reken dat dit regverdig sou wees om mense eerder op grond van klas as ras, geslag of etnisiteit te selekteer. Toegegee dat ’n skewe beeld van bemagtiging sover voorgehou is; tog is dit belangrik om te besef dat die doel van SEB is om elke burger van die land die geleentheid te gee om ten volle in ekonomiese ontwikkeling te deel en nie om die swart elite of middelklas te bevoordeel ten koste van dié wat werklik behoefte aan bemagtiging het nie. Navorsing is in Namibië gedoen en ook gedeeltelik in Suid-Afrika om vordering ten opsigte van SEB in dié land as maatstaf aan te wend. Die navorsing bestudeer en analiseer uitlatings deur leiers in verskillende sektore in Namibië, aangesien daar geen geskrewe SEB beleid is nie. Opnames is gedoen van besighede, insluitend maatskappye wat bevoordeel is uit SEB, ondernemings in staatsbesit, regeringsinstellings en klein en medium ondernemings. Daar is ook insette verkry van ’n breë spektrum van individue – deur persoonlike onderhoude of deur middel van vraelyste. Hierdie proses is in Suid-Afrika herhaal, waar ’n studie en analise van beleidsdokumente ingesluit is. Die doelwit met hierdie studie was om vas te stel hoe ver Namibië gevorder het in die bemagtiging van sy mense en hoe dit met die situasie in Suid-Afrika vergelyk. Die analise is soos volg gedoen: data van verskillende sektore is vergelyk en ook evalueer teen doelwitte wat in die handves van verskillende sektore of industrieë uiteengesit is. Data van industrieë in Namibië is ook vergelyk met soortgelyke industrieë in Suid-Afrika. Om vas te stel of enige vordering ten opsigte van SEB gemaak is sedert Namibië se onafhanklikheid agtien jaar gelede, is die navorsingsresultate van hierdie studie vergelyk met syfers wat op daardie tydstip beskikbaar was. Die studie het vasgestel dat die Namibiese regering in 2000 ’n komitee onder leiding van die Kantoor van die Eerste Minister aangestel het om ’n wetgewende raamwerk vir die opstel en implementering van ’n SEB beleid daar te stel. Tot op hede is daar egter nog nie so ’n beleid geformuleer nie. Al die maatskappye wat ingesluit is in hierdie studie het aangedui dat hulle regstellende aksie (RA) verslae aan die kantoor van die Diensbillikheid Kommissaris lewer en dat hulle hierdie beleid volg. Nogtans het die studie vasgestel dat die meeste van die maatskappye nie die RA voorskrifte nakom nie. Daar bestaan groot ongelykheid ten opsigte van inkomste in Namibië, waar die rykste 10% van die bevolking 65% van die inkomste verdien. Die studie het ook gevind dat Namibië geen aandele besit in maatskappye wat na onafhanklikheid tot stand gekom het nie, veral in mynbou, wat eintlik die ruggraat van die ekonomie vorm. Volgens die bevindinge van hierdie studie bevoordeel SEB ooreenkomste slegs diegene wat reeds rykdom besit of die regte verbintenisse het. Daar is geen beheermaatreëls in plek vir SEB ooreenkomste nie en gevolglik kies maatskappye met wie hulle besigheid wil doen. Tydens die studie is vasgestel dat die meerderheid maatskappye in Suid-Afrika hulle eie beleid het met betrekking tot breë-basis swart ekonomiese bemagtiging (BBSEB) en dat die industrieë hulle BBSEB industrie handves implementeer of opstel. Hoewel die regering ’n goeie grondslag gelê het vir ander instansies om op voort te bou, het Suid-Afrika nog ’n lang pad om te gaan, aangesien die meerderheid van die land se mense nog in groot armoede leef. Die studie het gevind dat die lede van die komitee wat die SEB beleid moet ontwerp voltydse posisies binne die regering beklee en dat SEB nie as ’n prioriteit gesien word nie. Daar word dus aanbeveel dat die regering mense permanent of op ‘n vaste termyn kontrak basis op die komitee aanstel, sodat hierdie persone op die opstel en implementering van die SEB beleid kan konsentreer. Indien vereis sou word dat besighede jaarliks RA verslae aan die regering inhandig, in lyn met die jaarlikse SEB verslae, sou dit verseker dat ’n poging aangewend word om SEB aan te spreek. Soos die geval is met RA, behoort van die meeste maatskappye, indien nie almal nie, verwag te word dat hulle SEB koördineerders in hulle strukture aanstel om die proses te dryf. Daar word ook aanbeveel dat ’n graduering sisteem ingestel word deur middel waarvan maatskappye en individue wat ’n sekere prestasievlak ten opsigte van SEB bereik het uit die sisteem gradueer om ander ’n kans te gee om voordeel te geniet. Besighede wat nog geen voordeel getrek het nie sou dan voorkeur geniet tydens die toeken van tenders en kwotas. Laastens beveel die studie aan dat die Namibiese regering ’n fonds skep waartoe alle geregistreerde maatskappye ’n seker persentasie van hulle wins moet bydra. Hierdie fonds sou aangewend word vir die ontwikkeling van vaardighede, aangesien die ontwikkeling en oordrag van vaardighede die belangrikste komponent van ekonomiese bemagtiging is. Hoewel die studie gevind het dat baie firmas goeie bestuur toepas, diversiteit beoefen, finasieel goed vaar en hulle beleid voorskryf dat werknemers sonder vooroordeel beloon word, verseker dit nie suksesvolle SEB nie. Daar is ’n vinnig-groeiende swart middelklas in Namibië en dit is belangrik om vas te stel hoe hierdie middelklas kan bydra om welstand te skep vir die meerderheid Namibiërs. Ten spyte van duidelike bewyse dat SEB in Suid-Afrika toegepas word, kan baie meer nog gedoen word om die probleem van armoede aan te spreek. Die sukses van die beleid en wetgewing wat deur die regering ingestel is om swart vooruitgang te ondersteun hang uiteindelik daarvan af dat ‘n omgewing geskep word wat bevorderlik is vir die benutting van geleenthede. Die korporatiewe kultuur in beide private en openbare instellings moet sodanig verander dat swartmense aanvaar en tegemoet gekom word, sodat hulle betekenisvol tot die ekonomiese ontwikkeling van Namibië kan bydra.

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