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In this weeks Black Business Executive Circles BEE Conference there was a review of

transformation in South Africa over the last ten years of democracy. I would like to

reflect on the two key observations made in the presentations in the conference.

Firstly looking at the ownership levels, one of the most glaring variances between what

gets reported and the actual reality is a cause for concern. Is this variance due tocompanies misrepresenting their information? Not really, companies report the legal

ownership as it appears on the share certificates or STRATE which does not apply the

flow through principle as it is not yet required by law. The flow through principle tracksthe true benefits that accrue to natural persons and thus determine the true ownership by

black people in an entity. The average ownership by black people in the JSE is estimated

to be approximately 4.7% and this represents legal shareholding. When the flow through

principle is used this estimated 4.7% will decrease but if the question of encumbrance isintroduced then this figure become very insignificant. These differences show the severe

lack of real capital in the hands of black people. They have to borrow money to be able to

build their capital and there are inherent uncertainties of how long this direct

unencumbered capital of at least 25% of the aggregate capital in South Africa can be builtover time. Therefore a high growth rate will help accelerate the acquisition of real and

sustainable capital by black people.

The other observation made in the conference is the both the progress and lack thereof

made from employment equity initiatives. It was noted that employment equity has notreversed white male preference and dominance. The statistics show that at the highest

occupational category of legislators and senior management white males account 43.3%.

Significant disparities on employment equity progress were also identified between the

three groups contained in the definition of black people. Black people in terms of theEmployment Equity Act are defined as Africans, Indians and Coloureds. The concluding

observation made in the conference when looking at the disparities between the differentgroups was, The best beneficiaries so far are the highly skilled groups who also happento be black (i.e. Indians); those who are skilled but are not black (whites) continue to

dominate and those who are black, but not skilled (Africans) are left out, its tougher if

you are neither black nor white (Coloured) without high level skills. Furthermore if youare black, female and not skilled you are still left out and if you are person with a

disability you do not appear on the screen

It is necessary to unpack the facts that shed some light to this conclusion. When oneevaluates the income levels that are contained in the Income and Expenditure of

Households Statistical Release from Statistics South Africa (Release number P0111) for

1995 and 2000 the differences become apparent. All population groups have moved morehouseholds into the highest expenditure group that spends over R52 800 per annum, but

the white and Indian households increased the most. Approximately 84% (62% in 1995)

of white households spend more than R52 8000 per annum and 66% (46% in 1995) of theIndian households are in highest expenditure groups. Even after the movement from

lower expenditure groups, the Coloured population group still has 70% of its households

spending less than R52 800 per annum, with 87% of the African households below this

level.

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The evaluation of the HSRC Human Resources Review of 2003 echo the similar

differences in higher education. Firstly they look at the distribution of graduates byqualification levels where African graduates are clustered at the lower qualification

levels, comprising only 19 percent of university doctorates and 26 percent masters

degrees but 87 percent of undergraduate diplomas and certificates. Secondly theyevaluate the overall success rate of the different population groups, and conclude that

white students succeeded far better overall in universities (83 percent) than Indians (75

percent), Coloured (72 percent) and African (68 percent), especially in contact mode.The results are far worse for African distance education students. This shows that the

majority of Africans acquire lower level qualifications which may not equip them to

function at the higher occupational categories in companies. There are also glaring

inequalities in the representation of black women and people with disabilities that needsto be proactively dealt with.

Therefore what needs to be done is to ensure that more focus is put in leveling the

playing fields for the different population groups especially the Africans and Colouredswho are lagging behind in most lifestyle indicators. There are clearly a lot of emotions

that these statistics may arouse however a pragmatic and mature approach has to be takento ensure that progress is made in an equitable manner. A shot-gun approach of breaking

down targets according to the different population groups for every indicator of the seven

pillars of Broad-based BEE would be cumbersome and complex. However a laisse faireattitude to the issues raised by the status quo is also dangerous because it builds an

uncomfortable time bomb that could explode at any time to the detriment of South

Africa.