JOHANNESBURG – It has been a quarter-century since apartheid ended, and 23 since the African National Congress took power in South Africa. But, as President Jacob Zuma reported in his recent State of the Nation Address, the country’s whites remain in control.
“White households earn at least five times more than black households,” said Zuma, and “only 10% of the top 100 companies on the Johannesburg Stock Exchange are owned by black South Africans.” Whites still represent 72% of top management. The Gini coefficient, a widely-used measure of inequality, shows no sign of falling and remains one of the highest in the world.
These outcomes come after 14 years of a strong affirmative action program known as Black Economic Empowerment (BEE), which created all sorts of incentives and constraints to foster black participation in ownership, management, control, skills development, procurement and entrepreneurship. White equity owners were required to sell shares to blacks in equity deals that were often highly leveraged and publicly financed.
But, Zuma argues, the outcomes fall short of the goal set in 1981 by the ANC’s then-president, Oliver Tambo, who sought to achieve economic emancipation, through “a return [sic] of the wealth of the country to the people as a whole.” This goal should be achieved by “radical economic transformation,” which means, according to Zuma, “fundamental change in the structure, systems, institutions, and patterns of ownership, management, and control of the economy in favor of all South Africans, especially the poor, the majority of whom are African and female.” The country needs to confront what he and others have called “white monopoly capital.”