Apartheid, meaning "separateness" in Afrikaans, had its beginnings in the mid-1600s, when white Europeans settled in the region. Yet, formal apartheid laws were not enacted until 1948, establishing racial, social, and economic discrimination against Bantus (black Africans) and other colored (non-white) people.
After violent conflicts during the early 1990s, the "Jim Crow"-like apartheid legal code was abolished, the first free elections were held, and South Africa's African National Congress assumed power.
To address South Africa's inequalities, South Africa's Black Economic Empowerment (BEE) program was created, which has been instrumental in redressing economic injustices created by apartheid. The Broad-Based BEE Bill of 2003 and the Broad-Based BEE Act were drafted, providing a legislative framework for Codes of Good Practice, enabling those implementing the policies to establish the BEE Advisory Council.
Earlier this month, South Africa's Department of Trade and Industry released the final Codes of Good Practice on Black Economic Empowerment, as required under the BEE Act.
The Codes set a ten-year moratorium on empowerment arrangements, with a 25.1 percent minimum target for black equity ownership and 40 percent target for black managers.
"The Codes clearly identify the government's BEE policy. It is not about ownership, but about improving black people's access to the economy, encouraging more black management, promoting employment equity, and nurturing black entrepreneurship," wrote Itumeleng Mahabane, a reporter of South Africa's Financial Mail.
Charters for a number of key sectors—including mining, petroleum and liquid fuels, maritime, transport, tourism, and finance—were launched. The charters provide a blueprint and timetable under BEE, guide the respective industries toward greater black business ownership, and eliminate slave-like conditions for employees in those industries.
President Thabo Mbeki's government refers to the present as a "two economies in one country" system. There is small elite of entrepreneurs and more skilled labor is becoming available, but the vast majority of the workforce is still unskilled and unemployable in today's modern economy.
Ruslyn Mining and Plant Hire (Pty) Ltd., a South African mining company, has fully embraced and benefited from the BEE program. This company is now majority owned by people of black African decent. Mr. Nikanyiso Buthelezi, a non-executive director and shareholder of Ruslyn Mining, responded to questions about how company benefits from the BEE program. Buthelezi, 36, had lived under apartheid and experienced the violence that eventually brought about its end.
Regarding the business environment under the BEE, Buthelezi said that many previously disadvantaged individuals buy into or join an existing business instead of establishing a new enterprise. "One gains valuable experience toward establishing a business in the future," Buthelezi said.
Buthelezi and a black consortium, of which he is part, have now acquired 50 percent ownership of a mining business with a white family. Ruslyn is now considered black-owned, allowing the company to take advantage of South Africa's BEE mining charter, which grants preferential treatment towards receiving mining licenses. For such benefits to bear fruit, he must be actively involved in management, and in turn improve his business and decision-making skills.
"If companies comply with that then it is easier for them to avail themselves of the benefits under the BEE program," said Buthelezi. "Alas, many family-owned businesses found themselves all of a sudden with black Africans owning a majority of the business, which they were not quite ready for. One has to develop a thick skin to overcome the barriers."
South Africa's universities have grown more able to prepare today's youth for business endeavors. Also, the government provides training programs and funds to get them started. Buthelezi believes that these young people should pursue entrepreneurship rather than working at a company for a prolonged period of time.
"Working in an established company forces one more often than not to think within the box. It stymies the creative juices of the young mind. For our country to produce the likes of Bill Gates, we have to encourage entrepreneurship and independent thinking. Yes, it is more secure to work for an established business, but our country is no longer for security, but opportunities," Buthelezi said.
Despite many empowerment programs, recent research results by the Cape Town Business School revealed that only 4 percent of the Johannesburg Stock Exchange Value is in the hands of black South Africans.
"That is not close [to] what we hoped for," said Buthelezi. "But, our country is going through an exciting period. There are many challenges, but once one jumps the hurdles, the rewards make it all worthwhile. I would not want to miss all these opportunities."
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