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Interview

Kganki Matabane – CEO, Black Business Council (BBC), South Africa

06.04.2018 / Energyboardroom

Kganki Matabane, CEO of Black Business Council (BBC), the representative voice of black business in South Africa, shares his first impressions of the association, the central role BBC plays within the South African landscape, the key challenges facing the socioeconomic drive of transformation, and his personal motivation to make a difference to the lives of South Africans.

Kganki, you were appointed CEO of Black Business Council (BBC) in December 2017. What are your first impressions of the role you have undertaken?

“If the demographics of the country are not reflected in the management, ownership and control of the economy, it creates an unsustainable situation where the majority of citizens feel excluded from the country’s development”

Firstly, the Black Business Council (BBC) is a critical organization, not only in South Africa but also on the continent and globally (by playing a role within the BRICS Business Council), chiefly because of the country’s history and current socioeconomic conditions. Fundamentally, the country needs to progress to a situation where there is equality of all races and groups. The main focus we need to have as a country now is to ensure equitable participation in the economy from an ownership, management and control perspective. The situation right now is that economic activity is concentrated in the hands of a few, which is not ideal. If the demographics of the country are not reflected in the management, ownership and control of the economy, it creates an unsustainable situation where the majority of citizens feel excluded from the country’s development.

As an indication, South Africa is the only country I am aware of with an association of unemployed graduates – graduates with various qualifications, even in technical fields like science and accounting, that cannot find jobs. That association has over 400,000 members! Underlying structural problems are the major cause behind this.

Very bluntly put, people with nothing to lose will take any opportunity to disrupt the country. But once people feel a sense of ownership in the country and its development, even if it is something as simple as owning their own two-bedroom house or a good job, they will feel like they have something to lose and they will feel attached to the country’s growth. This creates stability.

BBC’s responsibility is to change this situation. Our dream is to have a transformed, inclusive economy that is reflective of the demographics of the country. There is a strong recognition within the country that BBC is the voice of black business, as reflected in our participation at not only national conferences and events but also our work with international structures. For instance, we are represented on the National Economic Development and Labor Council (NEDLAC), which is South Africa’s apex social dialogue structure ensuring effective public participation in legislative and policy making. We also playing a leading role within the BRICS Business Council in South Africa. On the continent, we have signed Memoranda of Understanding (MoUs) with our counterparts across countries like Zimbabwe and Mozambique.

To achieve this, what are the strategic priorities BBC need to implement?

For us to get there, firstly, we need to lobby government to change their policies. Furthermore, we also need to lobby the government and the private sector to then implement these policies in order to see economic transformation take place in the country.

Another core piece of our engagement is focused on research, which is needed to generate the data and information required to devise better policies.

Another priority is to unite black business in South Africa into a stronger voice. There is strength and influence in unity. While there is unity currently, we would like to strengthen it further. Coordination is another element we want to develop, in order to ensure that black business becomes a force to reckon with in the country. Coordination and unity are required to drive effective and impactful action. For instance, with the recent furor surrounding a racist marketing ad campaign from an international clothing retailer in South Africa, instead of South Africans rioting and looting, a far more effective way to send a strong message against the campaign would have been if the black community – after all, the majority of the population and the majority of consumers – would have chosen to boycott that clothing chain.

We need to have unity of purpose. If we are not happy with the status quo, we need to speak as one voice to raise our grievances.

How do you see the relationship between this socio-economic need to transform South Africa into a more inclusive country and the need for job creation and economic growth?

Under our previous president, President Thabo Mbeki’s time, the country experienced growth of three to four percent for an extended period, yet that economic growth did not result in job creation or transformation. 24 years into independence and democracy, people are understandably becoming impatient. Imagine if you are someone that has waited for over two decades for a job! Some people will have reached retirement age without ever having been employed.

We have heard the ‘growth first’ story before. But the fact remains that economic growth did not bring job creation or transformation for South Africa. This is why people are now talking about inclusive growth. Growth and transformation need to happen simultaneously. For instance, some of our network providers were established after democracy in 1994 and yet these organizations are not owned by black people. Someone somewhere somehow missed many opportunities in 1994 to establish new companies that are more reflective of our country’s demographics in order to bring everyone on board the national development path.

How much progress has been made on this front over the past few years?

There has been some improvement but unfortunately, it is negligible. We have yet to see serious change.

As I alluded to, job creation is the top issue for the country. Unemployment – and especially youth unemployment – is too high at the moment, which is unsustainable and counterproductive to peace and stability. Take the Sandton business district in Johannesburg here, for instance. It is one of the most developed neighborhoods in South Africa and the continent. But just next to it is the township of Alexandra, which has not seen the development and prosperity of Sandton. It is not enough to just improve neighborhoods like Sandton, we need to also lift the surrounding areas.

Another impediment to black economic transformation is access to finance. For many black people, even if someone offers them the opportunity to acquire part of their company or win a business contract, they lack the financial capacity to do so. Lack of access to financing relegates black businesses to simply acting as middlemen to pass on business to established companies.

There are development finance institutions such as the National Empowerment Fund, but here the challenge is that these funds are not well-capitalized and therefore are unable to fund new projects. We have raised the issue of recapitalizing these institutions with the government and are awaiting their action.

For various industries, Sector Charters have been implemented but there are unintended consequences, chief among which is what I call box ticking. Many people in South Africa have not embraced the spirit of these charters but rather, relegate it to a compliance exercise. They care more about the technicalities of ticking the right boxes rather than genuine transformation. For instance, they may appoint a black woman to a ceremonial position without offering them real responsibilities or positions involving company operations. Fronting, when businesses place a token black person in charge and registers them as a business owner, without genuine participation or consent or knowledge,

Until this box-ticking mentality ends and industries and businesses begin to embrace the true spirit of transformation, we are not going to real change.

Fronting is also an issue, where someone takes a black acquaintance and registers them as a business owner without their consent or knowledge or genuine participation. The benefits of the company do not accrue to them. That is another thing we have been fighting for as well.

24 years after democracy, we should be seeing much more improvement. I do appreciate the work that has been done, for instance, in sectors like the liquid fuels sector, which was the first to adopt a transformation charter. However, transformation is not just about the CEOs and executive committees of leading companies but all about their suppliers, extending through their entire value chain.

Do you have a final message for our international investors?

South Africa is truly open for business and is a great place to work. But international investors must understand that as a country, we are still trying to deal with the legacy of apartheid and our own socio-economic issues. When investors work here, they must comply with our rules and norms. We want to see international investors come and grow the economy together with South African companies and South Africans.

On a more personal note, having worked across a number of sectors, what motivates you in your current position?

The diversity of my experiences have come in very useful in my current role. I have worked with different characters across many industries. I seem to have a God-given talent of being able to remain calm in diverse situations. This helps me analyze people’s characters and allows me to treat them accordingly. My work with Sentech, the signal distributor for the South African broadcasting sector, has been very helpful in acquainting me with highly compliance-based environments, because government institutions in South Africa focus a lot on compliance. This will help me as I try to professionalize BBC as an association.

Throughout my career, I have also worked extensively on the continent so I understand the dynamics of the region. Particularly through my previous role with Business Unity South Africa, where I used to assist with Heads of State visits, I have interacted with a number of international organizations as well as travelled to different countries. That experience will help with my role here because we are dealing with national, continental and international stakeholders. It will not be easy but I am committed to making a difference to my country.

My fundamental motivation is to make a change and a real difference in the South African landscape. I am always driven to make a difference in people’s lives. I see my role as CEO of BBC as a huge opportunity to improve the lives of South Africans and I am here to contribute what I can.

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