South Africa

South Africa

Forthcoming attraction: A Ministry of Small Business

Forthcoming attraction: A Ministry of Small Business

On Tuesday ANC Secretary General Gwede Mantashe announced that the party was very likely to create a Ministry of Small Business in Cabinet after the elections. While it's been a long time coming, there are going to be endless questions about who is really in charge of economic policy, what the ANC's economic policy is anyway, and how it will all play out. If it's played right, however, it could be a massive vote grabber for the ANC. By STEPHEN GROOTES.

Gwede Mantashe is one of the few senior leaders in the ANC who is happy to talk economics. He is well versed on the subject, well read, and usually well briefed. But what always gets him through these discussions is his political power. He is the one person who is almost always able to predict what the ANC will do, because his finger is on the pulse of the party’s policy debates. If he says it will happen and it’s within his power, it will happen. If it’s not within his power, he doesn’t say it will happen.

So this, then, marks a victory for those who have been campaigning for a ministry to push for the cause of small business. More than just about anyone else, it’s a victory for the Black Business Council, which has campaigned, pushed and lobbied hard. This is one of those cases where the identity of the people doing the pushing mattered. In the past, Business Unity South Africa has been the main business body. But it has been hamstrung by internal policy differences, and issues brought to the fore by the Black Managers Forum. At the time it was led by one Jimmy Manyi, who clearly decided there was an over-concentration of the BMF within BUSA, and took them out of the organisation.

This split ultimately led to the BBC’s formation, which led to much lamentation that we had separate racial business organisations. But the BBC showed it was clearly the more equal of the two. Because it and its leaders could not be written off as ‘White Apartheid Monopoly Capital’, it had to be taken seriously. It also represents the interests of the black middle class more than BUSA appeared to do. And of course, some of its leaders had what we could call prior relationships with some of the people in government. As a result, its voice was louder than it might have been if BUSA had not split.

The victory for this lobby may be more important for other reasons. It may be proof that for the first time, there is now an organised lobby within the ANC and the Alliance that fights for business. Considering that very few people within the party have any experience in business, this is an important development. It shows that the arguments around the economy may now be far more prominent than they have been up until now. At the very least, business may now have a voice in these debates. Considering that the Left, Cosatu and the SACP have essentially been neutralised on a policy level, the ANC could be on the road to becoming less hostile to business in a major way.

However, the real test of how much power this ministry has could be in who would be appointed the first Minister of Small Business, and what power it will actually have.

As the Constitution spells out, this will be entirely at the President’s pleasure. Thus Number One will decide who the person is, and how much power they have. Up until now, it’s appeared that President Jacob Zuma has used the economic cluster of ministries to balance out constituencies, rather than to give any faction particular power. His close ally, Pravin Gordhan, ruled the roost at the Treasury, Cosatu got Ebrahim Patel and Economic Development, and the SACP won Rob Davies at the DTI. Now he will have to balance things out in a different way.

For many business organisations, the one key criterion for this post is whether the person has run a business themselves. To look through the ANC’s electoral list, it would seem unlikely they would find a suitable candidate. There are very few people on that list who have experience in running a small business, and are high enough on those lists to get a ministerial post. It is of course possible that Zuma could appoint someone outside those lists, but he has a limited number of options there and it seems unlikely.

However, once that person is appointed, what would they really do? To a point it may depend on who else gets appointed to the other economic posts. If Davies is back at the DTI, for example, it would seem that the future Minister would have his/her hands full just opposing Davies’ love for red tape. In fact, it would seem likely that one of the main jobs of this person would be to simply try to stop the mushrooming regulation that threatens to periodically strangle small businesses. Their role, then, would be to simply be a voice against making life harder for business.

If Zuma keeps most of his Cabinet as it is (and Zuma usually only acts when he has to, so it it’s a possibility), then that person will have to fight both Davies and Patel. Unless they get strong support from whoever takes over from Pravin Gordhan at Finance, it seems unlikely that they will win.

However, the small business class, if we can call it that, is likely to become more important for the ANC. These enterprises will be owned and run by people who are natural ANC voters. As a result, the party does have an interest in making their lives easier, in having something to point to as evidence that the owners of these firms should vote for them.

But it goes deeper than that. There is actually quite a strong case to suggest that Zuma and the ANC should make this ministry a priority over the next five years. It’s fairly obvious that if small businesses take off, if life is easier for them, and they can hire and fire at will, for example, then more people will be employed. And as the ANC’s overall goal is supposed to be jobs at the moment, then it would be a rational choice to do everything it can to make this happen. The fact that Cosatu is so weak at the moment could allow this minister to campaign for, say, a complete exemption to labour laws for companies up to a hundred employees. If this were to happen (and to be perfectly realistic, it probably won’t), then the end result could be a lot more people in employment.

And that would lead to more votes for the ANC in the longer run.

But for the moment, we are going to have to play a waiting game. These questions will only be answered once Zuma appoints his post-election Cabinet. DM

Photo: A picture dated 13 February 2008 shows South African pedestrians walking past M.J Unisex Hair Salon in Masiphumelele township in Cape Town, South Africa. EPA/NIC BOTHMA


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