No country for hustlers: why unleashing the informal sector is South Africa's missing revolution
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Christo Van der Rheede hosted the FW De Klerk Foundation conference. Image: File A recent conference hosted by the FW de Klerk Foundation in collaboration with the Konrad-Adenauer-Stiftung brought together prominent South African intellectuals to discuss alternative ways to empower South Africans and stimulate economic growth. The Constitutional Rights conference, titled "Achieving an Inclusive Economy", featured panellists including Moeletsi Mbeki, Ashor Sarupen, Dr Celeste Campher, Ismail Joosub, and Professor William Gumede. One of the key topics discussed at the conference, hosted by its Executive Director Christo van der Rheede, was the need to rethink the current Broad-Based Black Economic Empowerment (BEE) policy. Mbeki, a prominent economist and businessman, argued that BEE has failed to achieve its intended goals and has instead created a culture of dependency among black professionals. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ "We have to repeal Black Economic Empowerment legislation," Mbeki said. "One of the most important consequences of the BEE combined with public sector salaries is that it disincentivises, especially young black professionals, to become entrepreneurs. It incentivises them to become public sector employees, and this is why South Africa is not building new companies." Gumede, a leading expert on economic development, proposed alternative empowerment strategies that focus on pragmatism and inclusivity. Gumede argued that the current BEE policy has benefited only a small elite group of black individuals, while leaving the majority of South Africans behind. "We need to shift to alternative optics of empowerment," he said. "The way empowerment is structured now is based on giving politically connected ANC leaders and trade union leaders benefits in existing companies. We need to bring small companies into supply chains and manufacturing so that the supply chains are in manufacturing. Secondly, we need to reward skills training and reward employment so that empowerment becomes that if you employ young people.' Gumede said pragmatism was a philosophy that must be implemented in South Africa. 'From South Africa's point of view, we need to focus all our state, economic, and nation-building initiatives on pragmatism… We need to look at what works and what is in the interest of everyone. We need to remove anti-growth policies,' he said. The conference also discussed the need to reduce the public sector wage bill, which is seen as unsustainable and detrimental to economic growth. Campher, an economist and policy analyst, argued that the government should prioritise infrastructure development and job creation over social interventions. "The current public sector wage bill must be reduced drastically to afford the building of public infrastructure," Campher said. "Our roads, harbours, and railway system are in a dilapidated state and must be fixed." Sarupen, a businessman and entrepreneur, proposed a Basic Employment Grant scheme that would provide individuals with a grant in exchange for rendering basic services at the municipal level. Sarupen argued that this approach would not only provide a safety net for the poor but also promote entrepreneurship and skills development. "A Basic Employment Grant should also be integrated with a skills and entrepreneurial development programme," Sarupen said. "Continuing to hand out grants for free perpetuates and has entrenched a dependency culture." One of the attendees of the conference, which was held in Boksburg, Ekurhuleni, said that it highlighted the need for alternative empowerment strategies that prioritise inclusivity, pragmatism, and entrepreneurship. "If we rethink the current BEE policy and promote small businesses and job creation, South Africa can stimulate economic growth and reduce poverty and inequality," he said.
