State accused of ignoring black investment professionals, specifically when delegation was sent to convince ratings agencies SA was sound
Deputy President Cyril Ramaphosa was criticised this week by black investment professionals, who accused government of neglecting them.
Fatima Vawda, the managing director of 27four Investment Managers, asked Ramaphosa why, when it came to putting together the delegation led by Finance Minister Pravin Gordhan earlier this year to travel overseas and convince investors that South Africa should keep its investment grade rating, the Association of Black Securities and Investment Professionals (Absip) had been left out.
Instead, white businessmen, including Investec Asset Management CEO Hendrik du Toit and Shoprite chair Christo Wiese, were included, Vawda said at an Absip transformation summit.
“We are kind of frustrated that when those big things are happening, the Hendrik du Toits and Christo Wieses are called upon,” Vawda said.
Mohale Ralebitso, the CEO of the Black Business Council, said that he supported Vawda’s sentiments: “The lament voiced by Fatima is very real.”
Ramaphosa said he was sorry to hear about Vawda’s complaint.
“Yes, you are right. When the delegation was put together, there wasn’t a trade union representative,”
At his behest, trade union delegates were included in the delegation, Ramaphosa said. Next time such a delegation was put together, Absip would be included, and he would relay the message to Gordhan.
Ralebitso said there were companies that had superior means to access the state, while at the same time these companies had been “anti-transformation”.
“They say no and they have the support of the state,” he added.
Ramaphosa said he disagreed with Ralebitso that certain companies had greater access.
“Black business in this country has greater access to government than existing business. You need to capitalise,” he said.
“The issue of black industrialists and small business was raised by black business,” Ramaphosa added.
A key focus at the Absip summit was on transformation and the fact that it was taking long to happen in the broad investment and financial services sector, which is estimated to have a value of R9 trillion.
Vawda’s 27four Investment company found in a survey that 4.4% of the assets in the sector were managed by black-owned investment firms.
The report also found that black stockbrokers received less than 1.4% of the commissions paid in the industry.
During his speech, Ramaphosa appealed to Absip’s members to come forward with ideas to get the economy going and to deal with economic issues such as unemployment, especially youth unemployment, poverty and inequality.
“Our country faces enormous challenges. Problems that require us to find a way [to solve them],” he said.
When the ANC took power, Ramaphosa said it might have allowed itself to be assimilated and took on too much of the old.
“We patched ourselves in,” he said.
“When the ratings agencies [look at us] again in December, we will expect that all of us will work together. By that time, we hope to have moved the needle on a number of issues,” he said.
The ratings agencies wanted to see key areas of growth, Ramaphosa said.
“A third of South Africans are completely locked out of the economy of their country. We need ideas ... Black professionals need to be on hand to help this country move forward,” he said.
At the summit, there were a lot of calls for government intervention and the implementation of policy to speed up transformation in the investment sector.
Delphine Govender, the deputy president of Absip, said that the “transformation agenda has been unclear across the value chain”.
Transformation should not just be a scorecard, empowerment or political issue, she said.
Ramaphosa said that there was a need for people to live by former US president John F Kennedy’s motto of “ask not what your country can do for you, ask what you can do for your country”.
“Be the change you want to see,” he stressed.
He also urged the delegates at the conference to “think outside the box” as there was a need for creativity and innovation.
Tryphosa Ramano, the president of Absip, said that business was “economic warfare” and that she understood Ramaphosa’s point about the need for innovation.
Meanwhile, Absip is lobbying for the establishment of a fund of as much as R100 billion to support black entrepreneurs, especially in the financial services sector.
Asief Mohamed, who represents Absip on the Financial Sector Charter council, said that some of the financial services firms had not met the requirement for 25% BEE ownership, as required by the charter.
Contributing to the proposed fund could be used to make up for the shortfall in empowerment ownership,
Discussions regarding such a fund were continuing with the Banking Association SA and the Association for Savings & Investment SA, he added.