The struggle of black businesses in South Africa
- Refiloe Nt’sekhe
- 28 Sep 2017 12:27 (South Africa)
I was recently chatting to a female friend who is a partner in a black-owned quantity surveying company. She was telling me about the challenges her company faces. Having worked for corporates for many years and acquired the necessary skills to run on her own but in her own words “it is still very difficult”.
When looking at governments, tenders are won by those who are connected or can afford to pay a bribe – a scenario I would argue does not exist in DA-led administrations. Nonetheless, my friend was asked to put down a million rand and the tender was as good as hers. Obviously, she did not have this kind of money which meant that if she really was unethical and desperate, she would have to put pressure on her business and get a loan from the bank before even starting the job just to bribe her way into the system. This is very risky business, and not to mention an act of corruption.
On another tender, a person is asked to give 40% for ensuring that the tender goes towards his company. The person getting 40% only sways the tender her way but she takes all the risk. She has to do the actual work on the project including managing it from start to completion. The discussions have become so complicated that people are not just asking for a “thank you” but stipulate their share of money in the business. Being in the department issuing the said tender, they know exactly what the value of the tender is.
This is what getting a government tender in ANC-governed South Africa entails. The drama does not end there.
She has applied for big jobs (contracts) in the private sector. This is another very closely guarded area. It is a closed system where those inside only talk to each other and do not allow outsiders in.
One of her previous bosses asked her to attend a meeting on his behalf and tell "them” that she would handle the project. From the moment, she walked into their boardroom, they were cagey about the project at hand and didn't even talk about what the project entailed. On more than one occasion during the meeting, she was asked where her boss was and she explained that he had recommended her to take this project, the body language seemed to say that “they could not believe she was capable”.
This was a meeting where the project management of a big mall was going to be discussed but her presence ensured that the project was no longer discussed. Although they knew she was coming – they became cagey about the details. At the end of the meeting, all except her were invited to a rugby game where the discussion to take the project further take place.
Leaving this meeting, she phoned her boss back to thank her for the opportunity. He immediately said that he had been called and invited to join the rugby outing, he assumed she had also been given an invite.
He believed in her. She had worked for him and he knew her capabilities yet, his colleagues in industry didn't and chose to second guess his recommendation.
This is probably an example of one black firm trying to crack into the big players market and being rejected or requested to pay a bribe. It is also indicative of how much still needs to be done to build an inclusive economy in South Africa. It is also the sad reality of many black honest companies in South Africa: companies that just want an opportunity and not a handout instead wanting a hand up.
A capable black company left out in the cold, because it's too honest to pay a bribe and too black to fit into the private market of big players. No one giving this company a chance. This company is kept outside.
To survive, her company is instead forced to take any jobs that comes by: these are usually the scraps left by the big players in the market.
It made me realise and acknowledge of a few things about our beautiful country.
At what stage will companies get an opportunity to grow fairly – not because some are “inside” and others are deliberately left on the “outside”? Are these some of the bigger unseen and unspoken of barriers to entry for businesses?
Politicians are responsible for breaking down barriers in the public sector and for holding fellow politicians accountable. There are laws that hold the private sector accountable when they do wrong. But is exclusion such as described above considered breaking the law? And who ensures that barriers are broken in the private sector to ensure that the economy is inclusive? DM