South Africa

2021 LOCAL ELECTIONS: STATE OF OUR CITIES

eThekwini metro (Part Two): ‘mafioso’ business forums rebrand and rake in government contracts

eThekwini’s new and improved Black Business Federation has attracted economic development and tourism, says its president Malusi Zondi. (Photo: Flickr / Flowcomm)

eThekwini’s once destructive Radical Economic Transformation-centred business forums — previously described as criminals, thugs and thieves by President Cyril Ramaphosa and KZN Premier Sihle Zikalala — have consolidated, rebranded (again) and embarked on a ‘professionalisation’ drive to gain access to lucrative public-sector contracts without scaring investors.

So effective has the allegedly newly overturned leaf of two amalgamated and rebranded business forums in particular become, that the new federation they formed has been “instrumental” in assisting KZN’s department of economic development to defuse “tensions involving other business [forums] and unorganised business”. 

“We decided to rebrand because we were moving away from thuggerism [sic] and a way of doing things in a manner that would eliminate investor confidence. We wanted to attract more professionals and business people,” Malusi Zondi, the president of the now Black Business Federation (BBF), told Daily Maverick this week. 

“We were called mafia, we didn’t want to be associated with that any more. We also started being seen as being political, but we are not that, we are a lobby group for better opportunities and monitoring of policies that are in place, but which need to be implemented and are not,” Zondi said. 

In the past, the most prominent business forum in the city was the notorious Amadelangokubona, once in competition with Zondi’s Federation for Radical Economic Transformation (FFRET). FFRET has since rebranded as BBF, taken Amadelangokubona into its structures, and in December held an upmarket launch at the Durban International Convention Centre. Amadelangokubona’s then leader, Robert Ndlela, is now the secretary-general of the BBF. 

The new and improved BBF had “attracted economic development and tourism”, Zondi told Daily Maverick

eThekwini Municipality has, since the days of now criminally charged former mayor Zandile Gumede, had an RET Framework policy in place which is — although unpalatable to some because of the images it conjures of former president Jacob Zuma and his ilk — punted as a legitimate means of ensuring sustained black involvement in the economy. 

In the unlikely event that an opposition party or coalition takes control of the metro following the local government election, business forums will almost certainly not be placated, as the ANC-run eThekwini is doing. 

On 13 October, the city proudly launched an SMME Helpdesk in the bustling public transport hub of Warwick Junction to help facilitate payments to service providers within 10 days of invoicing.

In a statement released thereafter, the city said the facility would help prevent “angry service providers from storming Municipal offices”, would provide a space for business forums to host meetings, and would “promote implementation of Radical Economic Transformation by ensuring that a minimum of 30 percent of the City’s procurement spend is allocated to enterprises owned by women, youth, people with disabilities, and military veterans”. 

Speaking about the SMME Helpdesk at the launch, eThekwini speaker Weziwe Thusi said the city “wants to work with the business forums that are here who always complain that they don’t get work from the municipality, they must come and get assistance from this beautiful centre”. 

Daily Maverick has learnt, however, that city officials have to hide potential new projects until they are ready for public release, as it is feared some of these same forums will invade the projects. It was for this reason that Daily Maverick was denied a list of derelict buildings in the city set for revamping or destruction. 

Zondi casually admitted that there were still “thuggish” business forums on the loose that “invaded places” because they had not yet come to the same realisation that BBF had. He said he could guarantee that BBF and its associations were not involved in any such activities.

Asked if he had been approached by Zikalala to stop the strong-arm tactics and often blatantly criminal activities associated with the business forums, Zondi replied: “Obviously”.

Before their rebranding, FFRET and Amadelangokubona made headlines for holding government officials “hostage”, invading the city’s executive council meeting sittings, blocking city employees from entering their offices over contract and payment disputes and “invading” countless multimillion-rand construction sites and South African National Roads Agency (Sanral) projects, while demanding a 30% cut of the value of projects, as specified in eThekwini’s RET Framework.  

In 2018, then KZN Treasury MEC Belinda Scott was granted an urgent temporary interdict against FFRET and Zondi after they “stormed the reception area” of the Natalia Building office in Pietermaritzburg.

Zondi and the FFRET members were looking for KZN’s then acting head of health Dr Musa Gumede, who was in a meeting with the treasury’s intervention team on the 11th floor.  The FFRET members eventually found him, held him “hostage”, called two people in the meeting with him “Indian dogs” and forced him to reinstate someone in supply chain management.

Zondi admitted to Daily Maverick that he led the charge against Scott. “That battle was between me and Belinda Scott,” he said. 

Just months before the dramatic hostage incident, the city paid R1-million for the organisation to host a conference that declared that “Guptas” (Indians) were ruining the RET roll-out in eThekwini.

That attitude toward Indians has now allegedly changed. “We don’t want RET to be seen as if it is for black Africans only, but also wanted to attract Indians, coloureds etc,” Zondi told Daily Maverick

Present at BBF’s launch in December was economic development MEC Ravi Pillay, who delivered a message of support from the podium. 

“The premier couldn’t attend so he deployed Ravi, it was the premier’s mandate,” Zondi told Daily Maverick

According to Pillay’s spokesperson, Bheki Mbanjwa, the MEC did not have a prepared speech for the event, but spoke on various topics, including the effect of Covid-19 on the economy and how the provincial government was firmly in support of “genuine economic transformation efforts”, but had stressed that these could not be at the expense of economic growth.

“The MEC warned about any activity, including criminal activity by business fora, that could undermine investor confidence and thus stifle economic growth. MEC Pillay did not mince his words, saying that those who engage in criminal activity will be dealt with by law enforcement agencies,” Mbanjwa told Daily Maverick

He said Pillay had also outlined government programmes aimed at advancing economic transformation. “These include the Operation Vula Fund, an instrument through which government [procures] business instruments worth a combined R300-million for the benefit of over 1,000 SMMEs.”

Mbanjwa said that when FFRET rebranded, “it did so with the promise that it wanted to be a proper business federation that is not associated with any activity that may be considered criminal, and we took it in good faith that this was a genuine effort from the organisation to become a formal business structure that engages with all stakeholders. It was for these reasons that the MEC saw it fit to honour the invitation [to BBF’s launch]”.

He said the department was watching the conduct of BBF “closely” and if there was evidence that it was involved in criminal activity, this would have to be dealt with by law enforcement. 

The department had never given the organisation any sponsorship, donation, branding or infrastructure support, said Mbanjwa, and while Pillay had met with BBF leaders twice since assuming his role in November last year, he had also engaged with other chambers of business. 

“The department’s officials continue to engage with BBF as and when required and it must be pointed out that BBF has been instrumental in assisting the department to [defuse] tensions involving other business fora and unorganised business.”

In the indictment against former mayor Gumede — now a sitting member of the KZN legislature — and her co-accused in the R320-million Durban Solid Waste tender case, the state details how Gumede and one of the clutch of accused, former councillor Mondli Mthembu, instructed councillors between September and December 2017 to find between “four and five” community-based contractors (CBC) and that of these, one each was to be “used as a vehicle through which the respective ward councillors could benefit from the payments that would accrue from the main contractors [in the DSW contract].”

The indictment further says: “Gumede and Mthembu instructed that the remaining CBCs should be appointed for the benefit of the other structures of the ANC and business forums like Amadelangokubona Business Forum and the MKMVA.” 

It was allegedly stipulated by the duo that only CBCs that had ANC members as directors or members should be used, and that they had to be aligned to “a certain faction of the ANC”, presumably that of Gumede and by extension, former president Zuma.  

eThekwini Metro, which has for more than a decade been viewed as a playground for ANC cadres, led from the front with the implementation of the RET policy. In February 2017, shortly after taking office, Gumede unveiled the Radical Economic Transformation Framework. In her foreword, she said that 22 years into democracy “the majority of black people are still economically disempowered”. 

Gumede said she would dedicate her term of office to “radical economic transformation” because “President Jacob Zuma has called on all of us… to start with practical programmes”.

Her foreword was supported by Mthembu, who was then the chairperson of the city’s powerful human settlements and infrastructure committee. Mthembu said in his message at the time that the “groundbreaking radical economic transformation plan… would require every capital project above R30-million [to have at least] 30 percent of the total budget benefiting the local community”. 

He said the framework was expected to dispel the perception that only a few or the “well-connected” benefited from the municipality, and that the city’s supply chain management unit would drive this new fairness. 

The city of eThekwini did not respond to questions sent by Daily Maverick about its relationship with business forums, including BBF. 

But Zondi said the relationship was “perfect”. “We get to speak with the city manager, the mayor. They support us fully, fully, fully”. 

The RET Framework the then FFRET had pushed for had helped business forums to align, he said. Small black-owned businesses in eThekwini were now “definitely” getting the 30% that FFRET and other forums had “lobbied for”.

He stressed that BBF had “done lots of workshops and awareness campaigns” to ensure the thuggery had ended and forums under its wing were skilled and educated. “Most of the people who are within our streams are now councillors,” he said. 

As for past behaviour, Zondi said FFRET and its affiliates had been “forced” to shut down sites because they were not given the business cut they were entitled to. 

“It was never our intention in the beginning to do those things, but it ended up looking like we were wrong because we never followed due process of going to court to take out interdicts or consulting with their leaders. We chose to shut down sites. 

“We believed in what we were doing, so we aren’t apologetic on that. But now we need to be more professional in terms of business. So the BBF is about professionalism, people participating in the mainstream economy, about people knowing about the content about business, about being more educated.” 

The new professional BBF had been lauded, he said, and had as a consequence attracted business for its structures. In 2018, Zondi told Moneyweb that FFRET members “collectively earn revenue of about R50-million a month from the project participation that it has secured”. 

Asked by Daily Maverick if this amount still stood within the new and improved BBF, Zondi laughed heartily. “No, no, no. Just think about Umgeni [Water]. It administers more than R40-billion of projects. When you go to Dube Trade Port, which falls under economic development, we have MOU’s with Dube Trade Port, with Richards Bay Industrial Development Zone, Sanral — look at the construction on the N3 — 30% of R4.5-billion. There is a lot of good work that we are doing. So lots of projects are coming to us.” 

A former SANDF member and metro officer, Zondi is pragmatic about the ANC, in whose activities he was raised, and some of its structures, such as the MKMVA. ANC military veterans fought among themselves and wouldn’t make ideal affiliates for BBF, he said. “You can’t take a political structure and give it a business.” 

“Even when we try to train them, they challenge us. We have chosen to leave MK aside, but we will help those who are autonomous from the structure.”

The BBF is apolitical, he stressed. 

 “Let me be honest. We respect the ANC and we appreciate the ANC, but there are policies that the ANC are approving which we don’t subscribe to, like cadre deployment. To us, it is questionable because the people the ANC deploys, they don’t check their qualities, they don’t check their capabilities. They just deploy them, and they occupy strategic positions [but can’t do service delivery]. When we engage with those officials who don’t know their story, we end up schooling them.”

BBF is not warm to the idea of BEE either, says Zondi, “Because it doesn’t benefit us”. “Most of those who have benefited from it have closed doors for other people. What we are doing is a form of BEE.” 

As for Ramaphosa in the past saying that business forums were engaging in radical economic thievery, Zondi says:

“At that stage Ramaphosa wanted to be president, and before that he was saying ‘Radical Economic Transformation will be implemented whether they like it or not’. So he is playing political games, they are contradicting themselves. They have a resolution that was taken at Nasrec to implement Radical Economic Transformation, but politicians change all the time. One minute something is green, the next time it is red. Ramaphosa is part of the RET collective, but it is the media that wants to segregate him, why?” DM

See Part One here, and Part Three to come. 

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All Comments 7

  • It’s not about what you know, it’s about who you know.

    No tax will be paid on the proceeds. Future investment will go to other parts of the country.
    Unconnected persons will be robbed of their futures.

  • ‘Business Forums’ have become the preferred means through which to channel tenders, by hook or by crook, to aggressive elites in primarily black urban areas.

  • Just as an aside – I can not understand that Elias was kicked from the anc for not ‘taking a walk’, but Gumede has been ‘elevated’ to provincial level?? When will she be kicked?

  • Well well well ! Leave it to the readers to decide their response! Certainly seems that KwaZulu Natal is a hive of activity- these “business Forums” are the new must haves for the politically connected elite! But how much of this is benefitting the country at large , or as always, just a small group of people?

  • …and any mention of the skills and capabilities to competently complete the projects. Living in the city, this is clearly not the case.

  • …and any mention of the skills and capabilities to competently complete the projects. Living in the city, this is clearly not the case. We have an awesome Durban Go bus service that cost billions and is yet to go live despite being complete because the metro can’t stand up to these forums / taxi operators. Held to ransom by thugs !!!