Blacks need to own more businesses

JOHANNESBURG – South Africa urged business yesterday to spread the gains of economic growth by accelerating deals handing ownership and management roles in companies to blacks under a government-backed programme.

“Those saying that empowerment can only be done when the cake expands are being fallacious,” the National Treasury Director General Lesetja Kganyago told the lobby Association of Black Securities and Investment Professionals (ABSIP). “For as long as the wealth is not being shared, empowerment will falter.Unless ownership broadens, the credibility and integrity of the process will be at stake,” he told the group’s forum in Johannesburg.Kganyago was backed by Brian Molefe, chief executive of the Public Investment Commissioners (PIC) that administers South African government employees pension fund, who said the group would use its immense muscle to deepen black empowerment.”When you look at the percentages of black ownership on the stock exchange for instance, it’s very small but there is willingness (to improve things),” Molefe told the forum.He said the PIC – which had 461 billion rand in assets under management in 2004/05 – was satisfied with the government’s codes of good practice on black empowerment issued early this week.The codes, which seek to get a standard measurement of empowerment for all sectors, set out black ownership, management and procurement targets among other things.”These should be seen as minimums.We at the the PIC are very happy with those that exceed and very unhappy with those who just do what is required,” he said.”Those companies we’re invested in, we’ll hold them to higher standards, the 25 per cent black ownership in the codes is the minimum we expect,” he said.The PIC is an influential player in empowerment stakes.The National Treasury’s Kganyago also urged banks to listen more to pleas from small companies looking to set up, but which often lacked credit.”Those little businesses you cut out, don’t forget what one day they might turn out to be,” he said.Small enterprises often complain that they are unable to secure credit from banks because they lack collateral or have no history of entrepreneurship.Kganyango also urged South African companies doing business on the rest of the continent to export good practices, corporate governance and sound management.-Nampa-Reuters”For as long as the wealth is not being shared, empowerment will falter.Unless ownership broadens, the credibility and integrity of the process will be at stake,” he told the group’s forum in Johannesburg.Kganyago was backed by Brian Molefe, chief executive of the Public Investment Commissioners (PIC) that administers South African government employees pension fund, who said the group would use its immense muscle to deepen black empowerment.”When you look at the percentages of black ownership on the stock exchange for instance, it’s very small but there is willingness (to improve things),” Molefe told the forum.He said the PIC – which had 461 billion rand in assets under management in 2004/05 – was satisfied with the government’s codes of good practice on black empowerment issued early this week.The codes, which seek to get a standard measurement of empowerment for all sectors, set out black ownership, management and procurement targets among other things.”These should be seen as minimums.We at the the PIC are very happy with those that exceed and very unhappy with those who just do what is required,” he said.”Those companies we’re invested in, we’ll hold them to higher standards, the 25 per cent black ownership in the codes is the minimum we expect,” he said.The PIC is an influential player in empowerment stakes.The National Treasury’s Kganyago also urged banks to listen more to pleas from small companies looking to set up, but which often lacked credit.”Those little businesses you cut out, don’t forget what one day they might turn out to be,” he said.Small enterprises often complain that they are unable to secure credit from banks because they lack collateral or have no history of entrepreneurship.Kganyango also urged South African companies doing business on the rest of the continent to export good practices, corporate governance and sound management.-Nampa-Reuters