BEE high fliers’ wings must be clipped

THE Government has been called upon to put in place strict monitoring mechanisms of black economic empowerment (BEE) deals in a bid to stamp out corruption that observers say is threatening the success of the process.

In separate interviews with The Namibian, economists, members of civil society and key stakeholders alike said it was critical that Government get into the driving seat and devise control strategies to ensure checks and balances were adhered to in the broader context of BEE. The calls came against a backdrop of rising concerns among the public that a few fat cats had emerged in post-Independence Namibia under the guise of empowerment while the majority continued to wallow in poverty.Tarah Shaanika, chief executive officer of the Namibia Chamber of Commerce and Industry (NCCI), said there was need to investigate and bring to book individuals and institutions that abused BEE-related monies.Shaanika said it was very unfortunate that black businesses’ names were being tarnished because of the conduct and behaviour of a few misguided elements.The NCCI chief spoke passionately, urging Government to crack the whip and restore sanity.He said: “It is sad that the image of black businesses continues to be brought into disrepute as a result of a few individuals.Certainly there is need to undertake thorough investigations into the conduct of some of the persons involved.”Shaanika said BEE projects were failing because of various reasons, but chief among them was a lack of proper management, resulting in total collapse.Poor management has seen millions of dollars, especially from State coffers, being lost.Examples of these are the failed Nandos BEE deal that saw the franchise going under with millions of dollars from the Government Institutions Pension Fund (GIPF) down the drain.The Social Security Commission (SSC) is struggling to recover N$30 million invested in a BEE asset management company, Avid Investments.The liquidation of the !Uri! Khubis Abattoir is another case in point, where a lack of visionary business leadership and sound management contributed to huge losses.Shaanika said in some cases the failure of the projects was caused by sheer negligence.In many cases, he said, the people involved were just after quick money and not long-term business.”Most of these people are not concerned about doing business but just making money as fast as possible.As a result, they rush to buy personal assets such as big houses and luxurious, expensive cars at the expense of their businesses,” said Shaanika.He said there was a strong feeling that there had been illegal activities in some of the cases, which should be thoroughly investigated.Martin Mwinga, an economist and BEE proponent, said Government intentions to fund BEE projects through arms such as the GIPF were noble but the money sometimes landed in the wrong hands.Mwinga said since the private sector was not funding such projects, Government had no choice but to chip in.The First National Bank (FNB) investment banker said Government had learnt its lessons, hence the best way forward was to monitor the projects effectively.”There is a need for strong monitoring of the BEE projects.What we have seen in the past showed that the approach was wrong.”Mwinga said it was essential for Government and its related arms to take up some management equity in the deals to ensure that money was used properly.Venture capital, added the economist, was a noble idea since it gave financiers the opportunity to manage the entities until the projects became self-financing.In other cases, Government was urged not to dish out money to people but instead pay suppliers and essential services to prop up the business.The consensus is that Government and the private sector need to join hands and come up with a proper legal framework to guide BEE.A Joint Consultative Council (JCC) official said without a national framework the process would lack coherence and each sector would shoot in its own direction.The JCC said the most effective tool to empower the majority of people was the promotion of small to medium-sized enterprises (SMEs).Government is calling for sectoral charters to guide BEE, but Shaanika concurred with the JCC that sectoral charters without a national framework were not good enough.caption Tarah Shaanika Martin MwingaThe calls came against a backdrop of rising concerns among the public that a few fat cats had emerged in post-Independence Namibia under the guise of empowerment while the majority continued to wallow in poverty.Tarah Shaanika, chief executive officer of the Namibia Chamber of Commerce and Industry (NCCI), said there was need to investigate and bring to book individuals and institutions that abused BEE-related monies.Shaanika said it was very unfortunate that black businesses’ names were being tarnished because of the conduct and behaviour of a few misguided elements.The NCCI chief spoke passionately, urging Government to crack the whip and restore sanity.He said: “It is sad that the image of black businesses continues to be brought into disrepute as a result of a few individuals.Certainly there is need to undertake thorough investigations into the conduct of some of the persons involved.”Shaanika said BEE projects were failing because of various reasons, but chief among them was a lack of proper management, resulting in total collapse.Poor management has seen millions of dollars, especially from State coffers, being lost.Examples of these are the failed Nandos BEE deal that saw the franchise going under with millions of dollars from the Government Institutions Pension Fund (GIPF) down the drain.The Social Security Commission (SSC) is struggling to recover N$30 million invested in a BEE asset management company, Avid Investments.The liquidation of the !Uri! Khubis Abattoir is another case in point, where a lack of visionary business leadership and sound management contributed to huge losses.Shaanika said in some cases the failure of the projects was caused by sheer negligence.In many cases, he said, the people involved were just after quick money and not long-term business.”Most of these people are not concerned about doing business but just making money as fast as possible.As a result, they rush to buy personal assets such as big houses and luxurious, expensive cars at the expense of their businesses,” said Shaanika.He said there was a strong feeling that there had been illegal activities in some of the cases, which should be thoroughly investigated.Martin Mwinga, an economist and BEE proponent, said Government intentions to fund BEE projects through arms such as the GIPF were noble but the money sometimes landed in the wrong hands.Mwinga said since the private sector was not funding such projects, Government had no choice but to chip in.The First National Bank (FNB) investment banker said Government had learnt its lessons, hence the best way forward was to monitor the projects effectively.”There is a need for strong monitoring of the BEE projects.What we have seen in the past showed that the approach was wrong.”Mwinga said it was essential for Government and its related arms to take up some management equity in the deals to ensure that money was used properly.Venture capital, added the economist, was a noble idea since it gave financiers the opportunity to manage the entities until the projects became self-financing.In other cases, Government was urged not to dish out money to people but instead pay suppliers and essential services to prop up the business.The consensus is that Government and the private sector need to join hands and come up with a proper legal framework to guide BEE.A Joint Consultative Council (JCC) official said without a national framework the process would lack coherence and each sector would shoot in its own direction.The JCC said the most effective tool to empower the majority of people was the promotion of small to medium-sized enterprises (SMEs).Government is calling for sectoral charters to guide BEE, but Shaanika concurred with the JCC that sectoral charters without a national framework were not good enough. cap
tion Tarah Shaanika Martin Mwinga