Black Economic Empowerment – A Perspective

SINCE Independence, the Government of the Republic of Namibia has committed itself to certain fundamental principles: democracy, justice, fairness, and upliftment of the socio-economic conditions of all Namibians.

These principles have a particular resonance for Namibia given the history, diversity, and quality of life and economic relations inherited from the past. A part of that legacy is the glaring fact that five per cent of the population owns, controls and disproportionately benefits from the nation’s economic resources, generating from this position of privilege a very high standard of living.This flows as well into the quality and type of education, health, leisure and accommodation they enjoy.On the other hand, some 95 per cent of the population, who happen to be black, have been fated to live lives that lie at the opposite end of the spectrum from those of their white compatriots.It almost goes without saying, then, that no democratically elected leader could at this point in the history of our country accept the perpetuation of such a state of affairs.Why? Because not only would this run counter to the principles and philosophy of economic democracy, fairness, and the creation of a cohesive and stable society; it would, also, be detached from the harsh reality under which the majority of citizens live.Nor can any defender of laissez faire, of the status quo, deny that there exist no examples of free markets prospering for long in democracies where a distinct and identifiable majority have no tangible stake in those markets.Having said this, the process of living up to the rightful standards of an independent and free Namibia, the process of reversing past inequities so as to enhance the standard of living of the majority and thus safeguard the peace and prosperity of the minority, is complex and difficult – there is no single answer.BEE is not the only means to empower previously disadvantaged people.It is one amongst many variables in a very large social and economic equation encompassing such basics as democracy itself, and beyond this, the provision of quality education, water, electricity, healthcare and other resources to those long denied them, as part of a drive to redress the imbalances we have inherited.There have bee some discussions on the term BEE itself with as many views as discussants.What is striking is that there are those who would conveniently like to hide behind semantics as an excuse to flow away the substance.BEE will depend on where one wants to put the emphasis – whether on the word “black”, the word “economic”, the word “empowerment”, or all three words.To me each one of these has relevance and meaning in contemporary Namibia.To me, BEE simply means that avenues must be found for previously disadvantaged black Namibians to participate meaningfully in the management, planning, ownership and benefits of the Namibian economy.For it to be acceptable and sustainable, the BEE effort must not fall foul of our other founding principles – for example, it must not disempower white Namibians.Moreover, it must be implemented in a transparent and predictable manner so as to avoid nepotism and cronyism and thereby avoid that it becomes a special realm of privilege for those who are close to the centre of power and information.It follows that it would best be done within a legislated framework, as legislation and the administration of laws once legislated are among the most transparent and accountable tools at the disposal of each citizen.Moreover, it should be broad-based, to ensure public mobilisation and support.However, in pursuing broad-based empowerment, we must avoid arranged marriages, fronting, tokenism and similar schemes, as well as the illusion that all citizens are equally prepared or inclined to fulfil the responsibilities that are inherent in ownership or stewardship of a business or of being an entrepreneur.In order to ensure that none of the vital portions of our economy are omitted or subject to “one size fits all” thinking, there should be sector-specific targets developed and agreed by all stakeholders that define empowerment in that sector, including, critically, targets for ownership and timing.Through the process of BEE, we would also want to create entrepreneurs.Because entrepreneurship in its best sense entails trying to create wealth, making a living, improving the quality of life through hard work, careful planning, risk taking and innovation.Those who are to be empowered must also bring – and be seen to be bringing – value to the enterprise.In this connection, firms in the process of empowering must be allowed to choose their would-be partners through a defined process.Those partners should participate not just in ownership, but also in management and decision-making.Knowledge and skills transfer should form part of important component in BEE relationships.Efforts should also be made to eliminate or reduce barriers to entry into empowerment, among which we typically find restricted access to capital, excessive acquisition costs, and overleveraged, overextended time periods before the tangible benefits of empowerment and ownership – free cash flow, mainly – trickle down to the ostensible beneficiaries.I am confident that given the opportunity, there will be Namibian entrepreneurs from all backgrounds and heritages who will distinguish themselves and rise to the occasion; and when they do, Namibia as a whole will benefit because the wealth they have created will to a very large extent be distributed, invested and spent in Namibia.Furthermore, it is my hope that introducing a national BEE agenda will lead to the formation of a strong and broad indigenous middle-class – a layer which in any society forms an indispensable centre of gravity and cohesion and, typically, patriotism as well; a layer that is simply too thin in Namibia at present.In part because of this reality, the responsibility for developing a comprehensive national policy and legislative framework and ensuring its implementation will, necessarily, lie primarily with Government.After 17 years of independence, Government’s record on this matter has, somewhat regrettably, been uneven and too often beset by inconsistency and indecisiveness.Here as in other matters of national importance, we should seek from Government clarity, consistency, focus and committed leadership.In any event, while it is true that many Namibians would have wanted a BEE policy framework to have been in place yesterday, the opportunity is not yet lost; or, as the saying goes, better late than never … BEE is not an end in itself; nor is it the only solution to all our economic and social ills; nor does it replace the responsibility of the State, of civil society, and indeed of all of us to pursue means through which the gap between the haves and have-nots is narrowed.These means should ensure that economic benefits and opportunities are properly distributed to all regions as well as to all sectors of society, including the youth, the aged and the disabled.We need a comprehensive socio-economic national agenda which has at its core a broad and qualitative education system, an affordable and quality basic health system, the development and extension of ICT, the availability of electricity and water infrastructure to the majority of the people particularly those in rural communities, and, yes, black economic empowerment also.Above all, we need a framework of good governance and of competent and visionary leadership at all levels of society that will take the nation to new heights.This is not just a matter of justice, of living up to our proud heritage of struggle.It is a matter of survival and self-interest.A stakeholder society is a powerful society and in all probability a peaceful one too.Our nation is too small, our collective challenges too large, to afford the to lock-out the majority from participating and benefiting from the economy or to squander the talents of a majority or expend scarce resources on building protective walls around a minority.So to those previously advantaged Namibians and companies that have taken the bull by the horns by proactively implementing BEE in our country, I salute you for your confidence in our collective future and your willingness to act on it as we embark on the necessary process of socio-economic transformation.And to those of us who come from the majority, I say, roll up our sleeves – there is much serious work to be done.* Dr Leake S. Hangala is formally with Cell One as Director: Corporate Strategy and Business Development, but he has written this article in his personal capacity.A part of that legacy is the glaring fact that five per cent of the population owns, controls and disproportionately benefits from the nation’s economic resources, generating from this position of privilege a very high standard of living.This flows as well into the quality and type of education, health, leisure and accommodation they enjoy.On the other hand, some 95 per cent of the population, who happen to be black, have been fated to live lives that lie at the opposite end of the spectrum from those of their white compatriots.It almost goes without saying, then, that no democratically elected leader could at this point in the history of our country accept the perpetuation of such a state of affairs.Why? Because not only would this run counter to the principles and philosophy of economic democracy, fairness, and the creation of a cohesive and stable society; it would, also, be detached from the harsh reality under which the majority of citizens live.Nor can any defender of laissez faire, of the status quo, deny that there exist no examples of free markets prospering for long in democracies where a distinct and identifiable majority have no tangible stake in those markets.Having said this, the process of living up to the rightful standards of an independent and free Namibia, the process of reversing past inequities so as to enhance the standard of living of the majority and thus safeguard the peace and prosperity of the minority, is complex and difficult – there is no single answer.BEE is not the only means to empower previously disadvantaged people.It is one amongst many variables in a very large social and economic equation encompassing such basics as democracy itself, and beyond this, the provision of quality education, water, electricity, healthcare and other resources to those long denied them, as part of a drive to redress the imbalances we have inherited.There have bee some discussions on the term BEE itself with as many views as discussants.What is striking is that there are those who would conveniently like to hide behind semantics as an excuse to flow away the substance.BEE will depend on where one wants to put the emphasis – whether on the word “black”, the word “economic”, the word “empowerment”, or all three words.To me each one of these has relevance and meaning in contemporary Namibia. To me, BEE simply means that avenues must be found for previously disadvantaged black Namibians to participate meaningfully in the management, planning, ownership and benefits of the Namibian economy.For it to be acceptable and sustainable, the BEE effort must not fall foul of our other founding principles – for example, it must not disempower white Namibians.Moreover, it must be implemented in a transparent and predictable manner so as to avoid nepotism and cronyism and thereby avoid that it becomes a special realm of privilege for those who are close to the centre of power and information.It follows that it would best be done within a legislated framework, as legislation and the administration of laws once legislated are among the most transparent and accountable tools at the disposal of each citizen.Moreover, it should be broad-based, to ensure public mobilisation and support.However, in pursuing broad-based empowerment, we must avoid arranged marriages, fronting, tokenism and similar schemes, as well as the illusion that all citizens are equally prepared or inclined to fulfil the responsibilities that are inherent in ownership or stewardship of a business or of being an entrepreneur.In order to ensure that none of the vital portions of our economy are omitted or subject to “one size fits all” thinking, there should be sector-specific targets developed and agreed by all stakeholders that define empowerment in that sector, including, critically, targets for ownership and timing.Through the process of BEE, we would also want to create entrepreneurs.Because entrepreneurship in its best sense entails trying to create wealth, making a living, improving the quality of life through hard work, careful planning, risk taking and innovation.Those who are to be empowered must also bring – and be seen to be bringing – value to the enterprise.In this connection, firms in the process of empowering must be allowed to choose their would-be partners through a defined process.Those partners should participate not just in ownership, but also in management and decision-making.Knowledge and skills transfer should form part of important component in BEE relationships.Efforts should also be made to eliminate or reduce barriers to entry into empowerment, among which we typically find restricted access to capital, excessive acquisition costs, and overleveraged, overextended time periods before the tangible benefits of empowerment and ownership – free cash flow, mainly – trickle down to the ostensible beneficiaries.I am confident that given the opportunity, there will be Namibian entrepreneurs from all backgrounds and heritages who will distinguish themselves and rise to the occasion; and when they do, Namibia as a whole will benefit because the wealth they have created will to a very large extent be distributed, invested and spent in Namibia.Furthermore, it is my hope that introducing a national BEE agenda will lead to the formation of a strong and broad indigenous middle-class – a layer which in any society forms an indispensable centre of gravity and cohesion and, typically, patriotism as well; a layer that is simply too thin in Namibia at present.In part because of this reality, the responsibility for developing a comprehensive national policy and legislative framework and ensuring its implementation will, necessarily, lie primarily with Government.After 17 years of independence, Government’s record on this matter has, somewhat regrettably, been uneven and too often beset by inconsistency and indecisiveness.Here as in other matters of national importance, we should seek from Government clarity, consistency, focus and committed leadership.In any event, while it is true that many Namibians would have wanted a BEE policy framework to have been in place yesterday, the opportunity is not yet lost; or, as the saying goes, better late than never … BEE is not an end in itself; nor is it the only solution to all our economic and social ills; nor does it replace the responsibility of the State, of civil society, and indeed of all of us to pursue means through which the gap between the haves and have-nots is narrowed.These means should ensure that economic benefits and opportunities are properly distributed to all regions as well as to all sectors of society, including the youth, the aged and the disabled.We need a comprehensive socio-economic national agenda which has at its core a broad and qualitative education system, an affordable and quality basic health system, the development and extension of ICT, the availability of electricity and water infrastructure to the majority of the people particularly those in rural communities, and, yes, black economic empowerment also.Above all, we need a framework of good governance and of competent and visionary leadership at all levels of society that will take the nation to new heights.This is not just a matter of justice, of living up to our proud heritage of struggle.It is a matter of survival and self-interest.A stakeholder society is a powerful society and in all probability a peaceful one too.Our nation is too small, our collective challenges too large, to afford the to lock-out the majority from participating and benefiting from the economy or to squander the talents of a majority or expend scarce resources on building protective walls around a minority. So to those previously advantaged Namibians and companies that have taken the bull by the horns by proactively implementing BEE in our country, I salute you for your confidence in our collective future and your willingness to act on it as we embark on the necessary process of socio-economic transformation.And to those of us who come from the majority, I say, roll up our sleeves – there is much serious work to be done.* Dr Leake S. Hangala is formally with Cell One as Director: Corporate Strategy and Business Development, but he has written this article in his personal capacity.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.

The Namibian uses AI tools to assist with improved quality, accuracy and efficiency, while maintaining editorial oversight and journalistic integrity.