political economy

State firms fail as training ground for black professionals

In the private sector, there are companies that are known as great training grounds for managerial and professional talent. Often, these places have rigorous recruitment processes and well thought-out development programmes, and embrace a culture of learning. McKinsey, SABMiller and, back in the day, Anglo American, have that reputation. In some Asian countries, such as Singapore and Japan, the public sector holds this reputation.

In SA, the apartheid state achieved some effectiveness in using state-owned institutions, especially those we now know as state-owned enterprises (SOEs), to nurture the aspirations of its constituency. Organisations such as Eskom and Transnet not only pursued that regime’s developmental goals, they provided an avenue for ordinary men and women, notably Afrikaners, to gain skills and build careers.

I am no fan of what I call neovolkskapitalisme, which manifests in “Broederbond envy” by certain sections of the black elite. As Sol Plaatje wrote about the passage of the Natives Land Act of 1913, “concession after concession was wrung from the government by fanatically Dutch postulants for office, for government doles and other favours, who, like the daughters of the horse-leech in the Proverbs of Solomon, continually cried: ‘Give, give’.”

This mobilisation of state resources culminated in a vicious, extractive, racially exclusive apartheid economy. Postapartheid SA, by definition, had to do better than this.

Still, it was expected that SOEs would act as transformative agents in the economy. These institutions would lead in restorative efforts to nurture the talents of the formerly excluded, be it through recruitment and professional development or preferential procurement. In fact, in the early years after 1994, this role for SOEs was recognised and advanced. They took the lead in opening the space for black executives and women to take up leadership positions. They deracialised the workplace and gave the formerly excluded opportunities that were not readily available in the private sector. You could say it is the legacy of a difficult past that this potentially transformative role soon morphed into crude racialism that is quite distinct from merit-based black economic empowerment. The SOEs did not become known as training grounds or vehicles of development.

The woeful state of most SOEs is well-documented. A presidential commission suggested some remedies to set these institutions back on the right path. There is little evidence that its recommendations have been engaged with. In the most recent medium-term budget policy statement, the financial health of SOEs is cited as one of the key risks to the fiscal outlook.

The public protector’s State of Capture report lays bare some of the machinations that see narrow interests prevail over the public good and genuine transformation. This has to be one of the most damning instances of how the governing party has (unwittingly, I assume) sabotaged black talent, possibly only exceeded by the blunders in the education system.

Too many well-meaning black executives and directors have been skewered by the toxic politics of patronage that have ensnared state institutions. Young, ambitious black South Africans have become alienated from them. The positive demonstration effect that could have flown from the parastatals has been overshadowed by the fulfillment of rather vile racist prophesies. For all that, the ANC must take responsibility.

Makhaya is CEO of Makhaya Advisory.

This piece was first published in Business Day (08 November 2016)

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