SA's economic transformation slow

SA's economic transformation slow [Image:]

Government is unsatisfied with the rate of transformation in the business sector, saying it is still largely reflective of the country's apartheid past.

The un-transformed patterns of ownership are the cause of the very skewed distribution of income in the country, Minister in the Presidency, Jeff Radebe, said on Tuesday.

“The ownership of productive assets in the South African economy is shrouded in secrecy. The JSE puts the figure of black ownership of the top 100 companies at 23%, which include indirect ownership by pension funds and empowerment schemes.”

He was speaking at the annual general meeting of the Black Management Forum in Midrand. Transformation was also slow in the transfer of economic assets such as agricultural land and ownership of companies. In terms of land reform, the target was to transfer 30% of all agricultural land over a period of 15 years to black people.

“But by March 2014, only 4 345 602 hectares of land (which amounts less than 10%) had been distributed to previously disadvantaged people, and many of the redistributed farms are lying fallow,” said Minister Radebe.

He noted that the number of black middle class South Africans had grown which was good, but more still needed to be done.

Between 2000 and 2013, the proportion of black senior managers increased from 18.5% to 40.1% and the proportion black top managers from 12.7% to 33.3%.

The proportion of female senior managers grew from 21.0% to 29.9% and female top managers from 12.4% to 20.6% over the same period.

“While this is far from reflecting the demographics of the country, it is nonetheless impressive performance and has contributed to the massive growth of the black middle class.”

Economic transformation, he said, was key to addressing unemployment, poverty and inequality.

As such, a partnership between government and the private sector is vital to ensuring the success of black South African businesses in the country.

“The ownership and management profile of the economy must be transformed to reflect that of the broader South African population.

“For all of this to happen, the developmental state needs to build a partnership with business broadly, and black entrepreneurs and black business and professional formations need to play a leadership role in the process.”

Faced with a stagnating economy, Minister Radebe said it is imperative that the country finds effective and sustainable ways to accelerate the growth rate, in order to enhance the standard of living for all South Africans.

“We urgently need to dramatically increase employment creation. We need to develop the country’s industrial capabilities and reduce dependence on commodity exports.”

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