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20 September 2017 22:01 (South Africa)
Opinionista Ivo Vegter

Why pick on Khanyi Dhlomo?

  • Ivo Vegter
    IvoVegterBW
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

The storm in a teacup over Khanyi Dhlomo’s deal to finance a luxury department store has a heady whiff of envy, malice, racism, and radicalism to it. It’s hard to untangle the various arguments, but one way or another, Dhlomo is getting tarred and feathered unjustly. And so are “pale males”.

All the elements of media hysteria were present. Money counted in millions. A government agency going broke. Expensive luxury goods sold to posh clientèle in upper-class shopping malls. Black economic empowerment. A businessperson whose conspicuous success belies that she is guilty of being young, black, attractive and female.

The story is probably well known by now, so I’ll recap only briefly, to establish the essential facts: Khanyi Dhlomo is a businesswoman with a string of successes on her CV, not least for being the first black newscaster on the SABC, and having launched the Destiny magazine venture in South Africa. She applied for and obtained a loan for her company, Ndalo Luxury Ventures, from the National Empowerment Fund. Amounting to R34.1 million, it funded Luminance, a Paris-style luxury department store, in Hyde Park Corner. The loan was granted on fairly onerous commercial terms, and was matched by R15 million in funding from Dhlomo and her partners. It included as pre-condition the dedication of a significant equity and procurement component to rural women who are set to produce luxury goods for the store’s house label.

Verashni Pillay, writing for the Mail & Guardian, compiled good backgrounders on who Dhlomo is, and how her store, Luminance, was founded and funded. The facts are important in this case, because hardly had the champagne gone flat after the store’s glitzy launch on 24 July when the outrage began.

Red Rob Davies, presumably mortified by the notion of the sort of trade and industry that involves expensive goods the proletarian masses cannot afford, called for an investigation into whether the NEF had overstepped its mandate, and if not, whether its mandate ought to be amended.

The NEF has defended its decision, and although it has also inconveniently run out of money after spending R3.6 billion on funding over four hundred other such deals since 2005, one can hardly blame the straw that broke the camel’s back.

One suspects Davies wants “black economic empowerment” to mean establishing peasant-farmers on subsistence lots rented from local municipal officials, but until he pronounces on the transaction, which he says he cannot do until a full investigation has been conducted, one can only speculate about his beef.

Motivated by the thinly-veiled and possibly defamatory insinuations in populist tabloids like the Sunday World, the DA parliamentarian Wilmot James promptly called for an even fuller investigation, not only into Dhlomo’s funding, but into the NEF’s entire investment history.

The Economic Freedom Fighters, Julius Malema’s new vanguard of radical socialism, instructed Dhlomo to “distance herself from possibly corrupt politicians” and return the loan.

Cue public outrage.

City Press ran an early, spirited, and prolonged defence of Dhlomo. They’ve been rather gushing for my taste, but they can be commended for knowing knee-jerk sensationalism when they read it, and for boldly challenging it.

Its editor, Ferial Haffajee, took to the opinion pages, however, to denounce the lynch mob in unsubtle terms: “From sites where pale males hold sway, the narrative is of her as a spoilt, state-fed leech, rather than as a young and dynamic woman who wants to give luxury-brands maven Johann Rupert a run for his money.”

This part puzzled me. You see, the Sunday World hit piece was penned by Babalwa Shota, who is neither pale nor male. Wilmot James is male, but not exactly pale, and Julius Malema is also notably swarthy of complexion. Not that there’s anything wrong with that.

Feeling the burden of being pale and male myself, I recollected my own initial reaction: “Seems a smart, hardworking and deserving woman. Not sure I see the ‘scandal’.”

I’ve long been on the record as being of the opinion that black empowerment is suffering a problem of diminishing returns, and should therefore be scrapped. I prefaced that view with the opinion that it was fully justified in the New South Africa, in redress of past discrimination. But while I am in principle opposed to the sort of directed government intervention in the economy that the NEF represents, that is a much broader and more complex question, which does not reflect on this particular deal, or on Khanyi Dhlomo herself.

I followed up my comment with the first defence of Dhlomo that City Press ran.

Another notoriously pale male, David Bullard, also flanked Haffajee in defence of Dhlomo, writing: “We need to celebrate people like Khanyi Dhlomo, not eviscerate them as our media seem so keen to do. As far as I am aware, there's not a hint of impropriety or scandal in anything she has done and, while I doubt if I can afford anything she stocks in Luminance, I wish her well and hope she puts South Africa on the global map. We need more Khanyi Dhlomos.”

Indeed. Helping to fund businesses like Dhlomo’s is entirely what one normally understands by black economic empowerment. It helps to establish her in a highly competitive market, where she can influence hiring and procurement, and make her contribution to correcting the artificial racial and gender imbalances with which Apartheid has cursed us.

The outrage against Dhlomo was whipped up by ill-informed presumptions about the mandate of the NEF, the structure of Dhlomo’s business, and insinuations of corruption. It was liberally seasoned with cynicism about the value of a luxury-goods sector to South Africa’s economy, and distaste for ostentatious wealth. Yet for all its emotive appeal, it appears to have been entirely baseless.

No doubt the usual flock of racists and communists joined the outrage simply because Dhlomo is well-to-do, well-connected and black, but Haffajee’s outraged response to the outrage was equally based on manufactured presumptions, this time about the racist motives of the outraged. Not having seen any actual examples of her claim, she’d have done us a favour if she named the purveyors of pale male opinion to which she alludes.

In any case, those offensive pale male opinions were well amplified by equally harsh opinion on the part of less pale and less male members of the public, as Haffajee in due course points out. If race cards are all you seek, you’ll find them. Her conclusion is that “South Africa is, across the board, uncomfortable with big black success.”

This gratuitous generalisation marred, in my reading, an otherwise sound defence of Dhlomo. I seem to recall a widespread sense of pride and national achievement when Patrice Motsepe made it first onto the Forbes Rich List, and then to the top of the pile in South Africa. Nobody launched an attack on Dhlomo when she herself was profiled as a “media mogul” and one of “Africa’s most successful women” in Forbes magazine two years ago.

Provided it is honestly earned, black success is rarely begrudged by pale people, in my experience, even in ungenerous company. When it is, it raises eyebrows. After all, most people recognise that economic progress is not a zero-sum game. The success of one may sometimes come at the expense of competitors, but not at a broader cost to society in general. Any economic activity produces a net economic gain, because both sides to a voluntary transaction perceive themselves to be better off afterwards.

No. My reading of the Dhlomo affair is that South Africans are uncomfortable with government subsidies or “soft loans”, are suspicious of cronyism when well-connected people succeed, and are instinctively distrustful of corporate power and the wealthy elite.

All of these are independent of race. Each of these is a perfectly worthy position. The first is justified in economic theory. The second is vindicated by the frequent corruption cases against our politicians and captains of industry. The latter is too often motivated by envy and a limited grasp of economics, but it is not always misguided either.

A more worthy conclusion would have been that none of these suspicions condemn Dhlomo in this case, given the evidence that has been reported to date. On the contrary. Her success is cause for celebration, pride and optimism. DM

  • Ivo Vegter
    IvoVegterBW
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

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