AN INVESTIGATION OF
BLACK ECONOMIC EMPOWERMENT (BEE)
AND ITS IMPACT ON DEVELOPMENT IN NAMIBIA
Ferdinand Ganaseb
Research report presented in partial fulfilment
of the requirements for the degree of
Masters of Business Administration
at the University of Stellenbosch
SUPERVISOR: DR. BABITA MATHUR-HELM
Degree of confidentiality:
December 2008
ii
DECLARATION
Hereby I, Ferdinand Ganaseb, declare that the content of this research report is my own and
original work and that all sources have been accurately reported and acknowledged, and that
this document has not previously been submitted in its entirety or in part at any educational
establishment to obtain an academic qualification.
7 November 2008
SIGNATURE
DATE
Copyright © University of Stellenbosch
All rights reserved
iii
ACKNOWLEDGEMENTS
The research on this topic has been both inspiring and challenging. My gratitude goes first to
all the businesses, institutions and the public, both in Namibia and South Africa, who assisted
me in answering my questions. It was a challenge to get responses, due to very busy schedules
of those who were involved with the surveys which I conducted, but the most important thing
is that we made it.
My thanks also go to Dr. Babita Mathur-Helm, my research supervisor at the University of
Stellenbosch Business School. I realize that she has a very busy schedule, but she made time
to assist me. Without her guidance and encouragement it would not have been possible to
complete the research in time.
I also want to thank my wife, Siglinde, and my children, Ferdinand junior, Abigail and
Glensia, for their unfailing support, encouragement, understanding, sacrifices and love during
the course of my studies in general and during my research in particular. They were the source
of my strength and without their support all this would not have been possible.
I also want to thank the Almighty God, who has given me the physical and spiritual strength
during the two years of my MBA studies. I realize that it was not by my own strength, but by
the grace of God that I was able to go through it.
iv
ABSTRACT
This study’s objective was to investigate what black economic empowerment (BEE) means to
Namibians and what impact it has had on development in Namibia. The study also did
research in South Africa for the purpose of benchmarking. Namibians in general understand
and embrace BEE, but it is clear from the study that Namibians are highly skeptical about its
impact in terms of empowering those who were previously disadvantaged.
The purpose of BEE is to empower black people. The challenge, however, is that seventeen
years after independence there is no policy yet on BEE in Namibia. Critics of affirmative
action argue that it is not worthwhile empowering only certain groups of people and
excluding the able-bodied, white male Namibians while the country has adopted the policy of
national reconciliation, irrespective of what happened in the past. They argue that it would be
fair to select people based on class, rather than race, gender or ethnicity.
It is true that the picture painted so far on empowerment is skewed, but it is important to note
that BEE is not about empowering the black elite or the middle class at the expense of those
who really need to be economically empowered; it is about allowing every citizen of the
country to participate fully in the economic development of his/her country.
The research was conducted in Namibia and also partly in South Africa, as it used progress on
BEE in South Africa as a yardstick. In Namibia, statements made by leaders in different
sectors were studied and analysed, since there is no written policy on BEE. The study
conducted surveys on businesses, including companies that have benefited from BEE, state
owned enterprises, government institutions and small and medium enterprises. Individuals
were also selected across the broad spectrum, of whom some were interviewed face-to-face
and others through questionnaires. The study repeated the same process in South Africa, the
only difference being that in South Africa it included study and analysis of policy documents.
The aim of the study was to find out how far Namibia has gone in empowering its people and
how this compares to neighbouring South Africa.
The analysis was done in the following way: data from different sectors were compared and
also assessed against targets set by different sectors or industries in their sectoral charters.
Data from different industries in Namibia were also compared to similar industries in South
Africa. In order to determine whether there has been any progress in terms of BEE since
v
Namibia’s independence eighteen years ago, the results obtained during this study were
compared to the figures that were available at the time of independence.
The study has established that, although the Namibian government had set up a committee
headed by the Office of the Prime Minister to come up with a legislative framework for the
drafting and implementing of BEE policy in 2000, no such policy exists to date. All the
companies included in this study indicated that they have submitted their affirmative action
(AA) reports to the office of the Employment Equity Commissioner and that they adhere to
this policy; yet the study has established that most of the companies do not adhere to the AA
policy.
There is a high degree of income disparity in Namibia, where the richest 10% of the
population receives 65% of the total income. The study also found that Namibia does not have
any shares in companies that were established after independence, especially in the mining
industry, whereas mining is the backbone of Namibia’s economy.
According to the findings of this study, with regard to the BEE agreements announced and
signed so far, only those who already have wealth or are well-connected benefit from these
deals. There is no controlling mechanism in place for BEE agreements and, as a result,
companies choose who they want to do business with.
In South Africa, the study has established, the majority of the companies have their own
broad based black economic empowerment (BBBEE) policies and all the industries have
either implemented or drafted their industry BBBEE charters. Although the government has
laid down a good foundation for the rest of the institutions to build on, South Africa still has a
long way to go, because the majority of its people are still living in abject poverty.
The study established that people sitting on the committee to draft the BEE policy are
permanently employed in other positions within the Government and when it comes to
prioritizing jobs, BEE is not regarded as one of the most important topics. It recommends that
the government appoint people on the committee either permanently or on a fixed-term
contract basis, so that these people can concentrate only on drafting and implementing the
BEE policy.
In line with the annual AA reports submitted, businesses should submit annual BEE reports to
the government. This would ensure that some efforts are made to address BEE and, as is the
case with AA, most of the companies, if not all, should be required to appoint BEE
vi
coordinators in their structures to drive the process. It is also recommended that there must be
a graduating system whereby companies and individuals who have attained a certain level
with regard to BEE should graduate out of the system in order to give others a chance to
benefit. Businesses that have never benefited before should get preference when awarding
tenders and quotas.
Lastly, the study recommends that the Namibian government create a fund to which all
registered companies would be required to contribute a certain percentage of their profits.
These funds would be used for skills development, since skills development and transfer are
the most important components of economic empowerment.
The study has found that many firms have good governance, they practice diversity, they are
doing very well financially and their company policies also state that they reward their
employees in an unbiased way; but that can, nevertheless, not be taken as a guarantee to
success in BEE.
There is a fast-growing middle class of black people in Namibia, but the most important thing
for Namibia, however, is to determine how this middle class can contribute to the creation of
wealth for the majority of Namibians.
Although there are clear indications in South Africa that there is a strong presence of BEE, at
least for middle class black people, much remains to be done to address the issue of poverty.
Finally, there are government policies and legislations that were created to advance black
people, but the success of these policies and regulations depends on the management
strategies that can create a conducive environment for black people. The corporate culture in
private and public institutions needs to change so as to accept and accommodate black people
in order for them to make a significant contribution to the economic development of Namibia.
vii
OPSOMMING
Die doel van hierdie studie was om vas te stel wat swart ekonomiese bemagtiging (SEB) vir
Namibiërs beteken en watter invloed dit op ontwikkeling in Namibië gehad het. Om ‘n
maatstaf te stel het die studie ook navorsing in Suid-Afrika gedoen. Hoewel Namibiërs in die
algemeen SEB verstaan en aanvaar, is dit uit die studie duidelik dat hulle hoogs skepties is
oor die impak wat dit gehad het in die bemagtiging van voorheen benadeeldes.
Die doel van SEB is om swartmense, vrouens en mense met gestremdhede te bemagtig. Die
uitdaging is egter dat daar in Namibië sewentien jaar na onafhanklikheid steeds geen beleid
ten opsigte van SEB is nie. Kritici van regstellende aksie redeneer dat dit nie verdienstelik is
om sekere groepe te bevoordeel terwyl bekwame blanke Namibiese mans uitgesluit word nie.;
dit terwyl die land ’n beleid van nasionale rekonsiliasie aanvaar het, in weerwil van gebeure
in die verlede. Hulle reken dat dit regverdig sou wees om mense eerder op grond van klas as
ras, geslag of etnisiteit te selekteer.
Toegegee dat ’n skewe beeld van bemagtiging sover voorgehou is; tog is dit belangrik om te
besef dat die doel van SEB is om elke burger van die land die geleentheid te gee om ten volle
in ekonomiese ontwikkeling te deel en nie om die swart elite of middelklas te bevoordeel ten
koste van dié wat werklik behoefte aan bemagtiging het nie.
Navorsing is in Namibië gedoen en ook gedeeltelik in Suid-Afrika om vordering ten opsigte
van SEB in dié land as maatstaf aan te wend. Die navorsing bestudeer en analiseer uitlatings
deur leiers in verskillende sektore in Namibië, aangesien daar geen geskrewe SEB beleid is
nie. Opnames is gedoen van besighede, insluitend maatskappye wat bevoordeel is uit SEB,
ondernemings in staats besit, regeringsinstellings en klein en medium ondernemings.Daar is
ook insette verkry van ’n breë spektrum van individue – deur persoonlik onderhoude of deur
middel van vraelyste. Hierdie proses is in Suid-Afrika herhaal, waar ’n studie en analise van
beleidsdokumente ingesluit is.
Die doelwit met hierdie studie was om vas te stel hoe ver Namibië gevorder het in die
bemagtiging van sy mense en hoe dit met die situasie in Suid-Afrika vergelyk.
Die analise is soos volg gedoen: data van verskillende sektore is vergelyk en ook evalueer
teen doelwitte wat in die handves van verskillende sektore of industrieë uiteengesit is. Data
van industrieë in Namibië is ook vergelyk met soortgelyke industrieë in Suid-Afrika. Om vas
te stel of enige vordering ten opsigte van SEB gemaak is sedert Namibië se onafhanklikheid
viii
agtien jaar gelede, is die navorsingsresultate van hierdie studie vergelyk met syfers wat op
daardie tydstip beskikbaar was.
Die studie het vasgestel dat die Namibiese regering in 2000 ’n komitee onder leiding van die
Kantoor van die Eerste Minister aangestel het om ’n wetgewende raamwerk vir die opstel en
implementering van ’n SEB beleid daar te stel. Tot op hede is daar egter nog nie so ’n beleid
geformuleer nie. Al die maatskappye wat ingesluit is in hierdie studie het aangedui dat hulle
regstellende aksie (RA) verslae aan die kantoor van die Diensbillikheid Kommissaris lewer en
dat hulle hierdie beleid volg. Nogtans het die studie vasgestel dat die meeste van die
maatskappye nie die RA voorskrifte nakom nie.
Daar bestaan groot ongelykheid ten opsigte van inkomste in Namibië, waar die rykste 10%
van die bevolking 65% van die inkomste verdien. Die studie het ook gevind dat Namibië geen
aandele besit in maatskappye wat na onafhanklikheid tot stand gekom het nie, veral in
mynbou, wat eintlik die ruggraat van die ekonomie vorm.
Volgens die bevindinge van hierdie studie bevoordeel SEB ooreenkomste slegs diegene wat
reeds rykdom besit of die regte verbintenisse het. Daar is geen beheermaatreëls in plek vir
SEB ooreenkomste nie en gevolglik kies maatskappye met wie hulle besigheid wil doen.
Tydens die studie is vasgestel dat die meerderheid maatskappye in Suid-Afrika hulle eie
beleid het met betrekking tot breë-basis swart ekonomiese bemagtiging (BBSEB) en dat die
industrieë hulle BBSEB industrie handves implementeer of opstel. Hoewel die regering ’n
goeie grondslag gelê het vir ander instansies om op voort te bou, het Suid-Afrika nog ’n lang
pad om te gaan, aangesien die meerderheid van die land se mense nog in groot armoede leef.
Die studie het gevind dat die lede van die komitee wat die SEB beleid moet ontwerp voltydse
posisies binne die regering beklee en dat SEB nie as ’n prioriteit gesien word nie. Daar word
dus aanbeveel dat die regering mense permanent of op ‘n vaste termyn kontrak basis op die
komitee aanstel, sodat hierdie persone op die opstel en implementering van die SEB beleid
kan konsentreer.
Indien vereis sou word dat besighede jaarliks RA verslae aan die regering inhandig, in lyn met
die jaarlikse SEB verslae, sou dit verseker dat ’n poging aangewend word om SEB aan te
spreek. Soos die geval is met RA, behoort van die meeste maatskappye, indien nie almal nie,
verwag te word dat hulle SEB koördineerders in hulle strukture aanstel om die proses te dryf.
Daar word ook aanbeveel dat ’n graduering sisteem ingestel word deur middel waarvan
ix
maatskappye en individue wat ’n sekere prestasie vlak ten opsigte van SEB bereik het uit die
sisteem gradueer om ander ’n kans te gee om voordeel te geniet. Besighede wat nog geen
voordeel getrek het nie sou dan voorkeur geniet tydens die toeken van tenders en kwotas.
Laastens beveel die studie aan dat die Namibiese regering ’n fonds skep waartoe alle
geregistreerde maatskappye ’n seker persentasie van hulle wins moet bydra. Hierdie fonds sou
aangewend word vir die ontwikkeling van vaardighede, aangesien die ontwikkeling en
oordrag van vaardighede die belangrikste komponent van ekonomiese bemagtiging is.
Hoewel die studie gevind het dat baie firmas goeie bestuur toepas, diversiteit beoefen,
finasieel goed vaar en hulle beleid voorskryf dat werknemers sonder vooroordeel beloon
word, verseker dit nie suksesvolle SEB nie.
Daar is ’n vinnig-groeiende swart middelklas in Namibië en dit is belangrik om vas te stel hoe
hierdie middelklas kan bydra om welstand te skep vir die meerderheid Namibiërs.
Ten spyte van duidelike bewyse dat SEB in Suid-Afrika toegepas word, kan baie meer nog
gedoen word om die probleem van armoede aan te spreek.
Die sukses van die beleid en wetgewing wat deur die regering ingestel is om swart
vooruitgang te ondersteun hang uiteindelik daarvan af dat ‘n omgewing geskep word wat
bevorderlik is vir die benutting van geleenthede. Die korporatiewe kultuur in beide private en
openbare instellings moet sodanig verander dat swartmense aanvaar en tegemoet gekom
word, sodat hulle betekenisvol tot die ekonomiese ontwikkeling van Namibië kan bydra.
x
TABLE OF CONTENTS
Declaration
ii
Acknowledgements
iii
Abstract
iv
Opsomming
vii
List of tables
xiv
CHAPTER 1 INTRODUCTION AND BACKGROUND
1
1.1
INTRODUCTION
1
1.2
AN OVERVIEW OF BLACK ECONOMIC EMPOWERMENT TRENDS IN
NAMIBIA
1.3
4
BROAD-BASED BLACK ECONOMIC EMPOWERMENT TRENDS IN SOUTH
AFRICA
7
1.4
COMPARING THE NAMIBIAN AND SOUTH AFRICAN SITUATIONS
9
1.5
OBJECTIVES OF THE STUDY
9
1.6
DEFINITION OF THE RESEARCH PROBLEM
10
1.6.1
Problem statement
10
1.6.2
Hypothesis
11
1.6.3
Research methodology
11
1.6.4
Delimitation
12
1.7
DEFINITION OF CONCEPTS
13
1.7.1
Black Economic Empowerment
13
1.7.2
Broad-Based Black Economic Empowerment
13
1.7.3
Middle Class
14
1.7.4
Economic Wealth
14
1.7.5
Black people
14
1.7.6
Previously Disadvantaged Namibians
14
1.7.7
Transnational Corporations
15
1.7.8
State-Owned Enterprises
15
1.7.9
Small and Medium Enterprises
16
1.7.10
Affirmative Action
16
1.7.11
Employment Equity
17
xi
CHAPTER 2 LITERATURE REVIEW
19
2.1
INTRODUCTION
19
2.2
NATIONAL DEVELOPMENT PLAN
21
2.3
VISION 2030
21
2.4
NAMIBIAN
GOVERNMENT’S
SUPPORT
TO
BLACK
ECONOMIC
EMPOWERMENT
22
2.5
FOREIGN INVESTMENT AND BLACK ECONOMIC EMPOWERMENT
23
2.6
PRIVATE SECTOR AND BLACK ECONOMIC EMPOWERMENT
24
2.6.1
Mining industry
25
2.6.2
Financial industry
27
2.6.3
BEE within the Fishing industry
28
2.6.4
Agricultural sector
30
2.6.5
Small and Medium Enterprises
32
2.7
PUBLIC SECTOR AND STATE-OWNED ENTERPRISES AND BLACK
ECONOMIC EMPOWERMENT
33
2.8
SKILLS DEVELOPMENT
34
2.9
BLACK ECONOMIC EMPOWERMENT DEALS AND AGREEMENTS
35
2.9.1
Old Mutual Namibia
35
2.9.2
Ongopolo Mining and Processing
35
2.9.3
First National Bank of Namibia
36
2.9.4
Alexander Forbes Namibia
37
2.9.5
Allan Gray Namibia
37
2.9.6
Olthaver and List Group of Companies
37
2.10
BLACK ECONOMIC EMPOWERMENT CHARTERS
38
2.11
PREFERENTIAL PROCUREMENT
38
2.12
CRITICISM OF BLACK ECONOMIC EMPOWERMENT IN NAMIBIA
40
2.13
BROAD-BASED BLACK ECONOMIC EMPOWERMENT IN SOUTH AFRICA41
2.14
SOME OF THE BROAD-BASED BLACK ECONOMIC EMPOWERMENT
DEALS AND AGREEMENTS SIGNED IN SOUTH AFRICA
44
CHAPTER 3 RESEARCH METHODOLOGY
47
3.1
INTRODUCTION
47
3.2
DATA COLLECTION METHOD
47
3.3
SAMPLE
47
xii
3.4
DATA COLLECTION
48
3.4.1
State-Owned Enterprises
48
3.4.2
Mining Industry
49
3.4.3
Financial Institutions (excluding banks)
49
3.4.4
Banks
49
3.4.5
Municipalities
49
3.4.6
Government Institutions
50
3.4.7
Fishing Industry
50
3.4.8
Small and Medium Enterprises
50
3.4.9
Academic Institutions
50
3.4.10
Public Interviewed
51
3.4.11
South Africa
51
CHAPTER 4 RESULTS AND ANALYSIS
52
4.1
METHOD OF ANALYSIS
52
4.2
STATE-OWNED ENTERPRISES
52
4.3
MINING INDUSTRY
53
4.4
FINANCIAL INSTITUTIONS (EXCLUDING BANKS)
54
4.5
MUNICIPALITIES
55
4.6
BANKS
56
4.7
OFFICE OF THE EMPLOYMENT EQUITY COMMISSIONER
57
4.8
FISHING INDUSTRY
58
4.9
SMALL AND MEDIUM ENTERPRISES
60
4.10
ACADEMIC INSTITUTIONS
61
4.11
RESULTS FROM THE INTERVIEWS
62
4.11.1
Namibia
62
4.11.2
South Africa
63
4.12
SOUTH AFRICAN COMPANIES
65
4.13
COMBINED AVERAGE IN NAMIBIA
66
CHAPTER 5 CONCLUSION
68
5.1
NAMIBIA
68
5.2
SOUTH AFRICA
71
5.3
LESSONS LEARNED
72
xiii
CHAPTER 6 RECOMMENDATIONS
73
LIST OF SOURCES
75
Appendix A
80
Appendix B
82
Appendix C
83
Appendix D
86
Appendix E
88
Appendix F
90
Appendix G
93
xiv
LIST OF TABLES
Table 4.1: State-owned enterprises
52
Table 4.2: Mining companies
53
Table 4.3: Financial institutions
54
Table 4.4: Municipalities
55
Table 4.5: Banks
56
Table 4.6: Fishing industry
58
Table 4.7: Small and medium enterprises
60
Table 4.8: Academic institutions
61
Table 4.9: Interview results from Namibia
62
Table 4.10: Interview results from South Africa
63
Table 4.11: South African companies
65
Table 4.12: Combined average in Namibia
66
1
CHAPTER 1
INTRODUCTION AND BACKGROUND
1.1
INTRODUCTION
Black employment equity (BEE) is a much talked about topic in the southern region of Africa,
particularly in Namibia and South Africa. Namibia was colonized and occupied by the then
German colonialists, as well as the former apartheid regime of South Africa, for more than
seventy five (75) years. As a result, the economic wealth of the country was (and still is) in
the hands of minority, previously advantaged groups in Namibia (Gaomab, 2004: 8). These
previously advantaged groups of people are classified as white Namibians, who are mostly of
South African “Afrikaner” decent, followed by those of German origin. White people of
German origin were the previous colonizers in Namibia, before the South Africans, led by the
former apartheid government, took over.
Despite the absence of an official policy on BEE in Namibia, the fundamental rights and
liberties of the Namibian people were laid out in the Constitution of the Republic of Namibia
(Article 23 (2), 1991) under the title “Apartheid and Affirmative Action”. Although the article
does not mention black people, it, amongst others things, states that racial discrimination and
the ideology of apartheid shall be prohibited, that nothing shall prevent the Namibian
parliament from enacting legislation “providing directly or indirectly for the advancement of
persons within Namibia who have been socially, economically or educationally disadvantaged
by past discriminatory laws and practices, or for the implementation of policies and
programmes aimed at redressing social, economic or educational imbalances in the Namibian
society arising out of past discriminatory laws and practices”. It would be fair to conclude that
this legislation, Article 23 of the Namibian Constitution, refers to BEE.
After Namibia gained its independence in 1990 its leaders decided to redistribute the
country’s wealth on an equal basis to all the people of Namibia (Gurirab, 2004: 4). Gurirab
further states that the Namibian leaders have realized that the redistribution of the country’s
wealth cannot be done without empowering the people who were previously disadvantaged,
hence the term BEE. According to Gurirab (2004: 2), the main purpose of BEE is to redress
the imbalances of the past by way of sharing the wealth creation capacity of the country
equally amongst all the residents of the country and allowing full participation of these people
in all economic activities of the country. It needs to be understood, however, that the phrase
‘all the residents of the country’ refers to all the people, including those who were previously
2
advantaged. The economic activities of the country, according to Namibian Minister of Trade
and Industry (Ngatjizeko, 2007: 12) are, amongst other things, the extraction of raw materials,
processing of raw materials, controlling and managing the extraction and processing of these
materials, conversion of raw materials into finished goods and ownership of the land, the
mines and the factories.
Dr. Leake Hangala, the former managing director of Namibia Power Corporation, states that
since its formation the Namibian government has committed itself to addressing certain
principles, such as uplifting the socioeconomic conditions of all Namibians, democracy,
justice and fairness (2007: 8). He further states that 5% of the population owns and controls
the economic resources of the country. These people enjoy a very high standard of living. On
the other hand, 95% of the population, who happen to be black, enjoys a life that is totally
opposite to that of their counterparts (Hangala, 2007: 8). This, nevertheless, was not
considered to be illegal, as it was approved by the then government of the day.
BEE in Namibia is aimed at empowering black people, women and people with disabilities
(Gaomab, 2004:8). However, some of the critics of BEE argue that it is not worthwhile
empowering only certain groups of people, as mentioned above, and exclude the able-bodied,
white male Namibians while the country has adopted the policy of national reconciliation
irrespective of what happened in the past (Eisaguirre, 1999: 19). National reconciliation is
aimed at forgetting what happened in the past. It should be understood that although one
would have liked to forget the fact that the majority of the people were marginalized, it will
be difficult to ignore the truth that people are still living with these realities. As the former
Prime Minister of Namibia, Theo-Ben Gurirab (2004: 2) states, people are still living in
poverty and are excluded from participating in the economic activities of the country, and
these facts need to be corrected. The only way to do this is by empowering the previously
disadvantaged. It is, however, important to note that the implementation of BEE does not
necessarily mean the enrichment of the poor. As an example, labour movements should be
involved and should broaden the BEE debate beyond pure ownership and include issues
which will directly benefit black workers. As examples one can mention issues such as a
living wage, access to education and training, establishment of social safety nets, proper
housing and health care.
BEE cannot be considered in isolation as it is very much a function of affirmative action (AA)
and employment equity (EE) (Gurirab, 2004: 4). Without some sort of legislation, corporate
organizations will hardly consider implementing BEE. This has primarily been the case in
3
Namibia, as most of the companies in the private sector simply ignore calls from the
government to empower black people in the country. For BEE to be successful in Namibia,
the government needs full commitment and participation from the private and the public
sectors as well as the non-profit organizations (Gaomab, 2004: 11).
While BEE refers to measures, actions and programmatic steps geared towards enabling
meaningful participation of black people in the economic mainstream, broad-based black
economic empowerment (BBBEE) is inclusive of all the people who were marginalized and
excluded from the mainstream economy of the country (Kgomoeswana, 2007: 1). It is broad
based in the sense that it creates economic empowerment for all black people, women, youth,
the disabled, and those in rural areas. Alexander (2007: 2) defines BBBEE as not simply a
moral initiative to redress the wrongs of the past, but as a pragmatic growth strategy that aims
to realize the country's full economic potential. This is exactly where it differs from normal
BEE. Hence the introduction of seven elements of BBBEE as described by Balshaw and
Goldberg (2005: 19).
The closest that black Namibians came to participating in the economic activities of the
country before independence was by joining the physical extraction and/or processing of raw
materials, especially in the mining and agricultural sectors.
Political independence has paved the way for Namibia’s economic emancipation. Most of the
Namibians, especially at the grassroots level, thought that political independence would mean
the automatic transfer of wealth to previously disadvantaged Namibians. However, these
people soon realized that it was not that simple. This is a battle that needs to be fought in the
boardrooms and not on the streets and in the bush as was the case when fighting for political
independence. Some of the questions one needs to ask and also answer are as follows:
 What does BEE mean within the Namibian context and what is its impact on
development in Namibia?
 Can one look at countries, such as South Africa, which seem to be far advanced in
driving their BBBEE, and perhaps learn a few lessons from them?
 Will Namibia one day reach a stage where its leaders will say that they are happy with
what the country has achieved so far and stop enforcing BEE and treat all the citizens
equally without giving any citizen preferential treatment?
 What approach is the neighbouring South Africa following regarding their BBBEE?
4
 What are the consequences of BEE in Namibia, if there are any? What are the
consequences in the South African context?
According to the constitution of Namibia (1990), the country consists of different indigenous
population groups that include Damaras, Namas, Hereros, Oshiwambos, Tswanas,
Ovahimbas, Caprivians, Okavangos, Coloureds, Basters and San (Williams, 2000: 3). All
these groups are classified as black Namibians. The others are Afrikaans, German and English
speaking Namibians, and they are all classified as white Namibians.
1.2
AN OVERVIEW OF BLACK ECONOMIC EMPOWERMENT TRENDS IN
NAMIBIA
1) Namibia gained its independence from the then apartheid South Africa in 1990
(Williams, 2000: 4). Since some of the citizens of Namibia thought that with the
attainment of political independence one automatically also gains economic freedom,
it was a hard blow for them. The fight for economic freedom was, and is, ongoing.
2) It is claimed that to date there is no BEE policy (Gaomab, 2005: 6); however, the
Namibian Cabinet mandated the Office of the Prime Minister in 2000 to set up a
committee to draft and implement a legislative framework in terms of BEE (Institute
for Public Policy Research, 2007: 11). As good as it might sound, not much has been
achieved yet, despite the fact that the mandate was given eight years ago. This is very
frustrating to those who are still waiting for something to happen, and to those who
want to see and taste the fruits of their hard-earned struggle for independence,
especially as promises were made of a better life after independence.
3) According to the survey done by this research (APPENDICES C & F) only 7% of the
companies have company-specific BEE policies, despite a call from the government,
through the responsible line ministries, for companies to come up with BEE policies.
This call is clearly being ignored by the businesses, and the reason might be that there
are no guidelines. There are also no punitive measures in place for those who do not
adhere to this call by the Namibian Government.
4) Namibia has no industry-specific BEE charters although the financial industry is in
the process of finalizing its charter (Gawaxab, 2006: 9). According to the South
African Department of Trade and Industry (DTI, 2004: 22) the charters aim to outline
industry-specific BEE weightings and targets, establish industry-specific elements of
the scorecard and also standardize industry BEE initiatives and reporting. As is the
5
case with company specific BEE policies, there are also no punitive measures in
place for those who do not implement industry BEE charters. Charters include
specific mechanisms to achieve BEE objectives in the sector in a comprehensive and
effective manner. The Department of Trade and Industry (DTI) also states that it
should advise the sector on appropriate measurement indicators and targets. It will be
difficult for government to punish others while, after eight years since they mandated
the Office of the Prime Minister, they themselves haven’t come up with any
legislation on BEE.
5) Namibia’s BEE is broad based although they refer to it as only BEE (Gaomab, 2005:
2). This means that the classes or groups of people included in the BEE are black
people, women, youth, the disabled, and those living in rural areas. There are no
records of the exact numbers and size of these groups of people who have so far
benefited from BEE in Namibia.
6) There are ongoing BEE deals or agreements despite the absence of any national BEE
policy (Gaomab, 2004: 7). This is a sign that at least some of the businesses are
making efforts to empower others and although not everybody is happy with the
efforts made so far, one has to appreciate the fact that there is a progress.
7) According to Naholo, the former Secretary General of the National Union of
Namibian Workers, the BEE agreements only benefit those who are well connected
either with highly placed politicians or other well established business people (The
Namibian, 2005: 28). It is true that BEE makes good business sense, if handled
correctly, because without BEE partners in a business there might not be any business
in years to come, as most of the consumers are black people. Given that businesses in
most cases concentrate on the bottom line, it makes sense that for their businesses to
grow, they will look at people who have influence in some way or another. Moreover,
they will look at whether the potential partner has money or whether he or she is well
connected.
8) The government of Namibia introduced AA and EE acts in 1998 (Act 29, 1998).
These acts are not broad based in the sense that they concentrate only on putting the
previously disadvantaged people into management positions. When one looks at what
has been happening in the industries, one cannot say that they are effective (Gaomab,
2007: 11). Although the companies have submitted their AA and EE reports to the
6
office of the EE commissioner, some of the information is flawed. AA is being
applied at more junior levels but when it comes to supervisory and management
positions, especially in the mining and financial sectors, one cannot believe that these
are the very same companies who claim to be adhering to Namibia’s AA policies.
9) The Government of Namibia introduced National Development Plan 2 to 7 in 2000
(National Development Plan Volume 1 & 2, 2000) which aims, in the absence of any
national policy, to address the backlogs that were created by the former repressive
law in the Namibian society. These development plans are too open ended, as they
lack clear action plans and targets. Although the Namibian Government has clarified
what it wants for the people, without targets and clear action plans in place, all these
ideas will remain only a dream.
10) There is noticeable involvement of the public and private sectors and nongovernmental organizations (NGOs) in realizing the BEE strategy in Namibia,
although to a very marginal extent (Gaomab, 2004: 11). These involvements need to
be commended but, on the other hand, private sectors need to be encouraged to put in
more effort, as they are the ones with capital. Without a strong partnership between
the government, the private sector, non-governmental organizations and the public,
the BEE effort will not get any further.
11) There is very strong criticism from different quarters on BEE in Namibia (Namibia
Economist, 2006: 17). One has to accept the fact that there will always be criticism,
whether one does good or bad. Criticism, especially from the quarters affected
negatively, needs to be taken seriously. If the authorities want the Namibian nation to
embrace BEE and its initiatives, they have to lay these criticisms to rest. The
criticisms come from those who feel left out, and as long as these people feel that
they are not part of BEE, the authorities will not be successful in their endeavour to
empower people.
12) Katswara (The Namibian, 2005: 29) states that only a few companies have adhered to
the government’s call and have come up with a Preferential Procurement data base,
especially in the mining sector. Instead of asking the companies or the industries, it
would have been better for the Namibian government to come up with a legislative
framework and instruct both the companies and the industries to accept and
implement the preferential procurement policies. As long as there is no legislative
7
framework, and punitive measures in addition, it appears as though the businesses
have a choice and that it is not compulsory.
13) The government of the Republic of Namibia has designed a price preference policy
with regard to its tenders (NCCI, 2003: 8-9). This is a very good stride made by the
government. However, this policy only applies to government tenders. It would have
been better if it had been extended to all the governmental institutions, such as the
state-owned enterprises.
1.3
BROAD-BASED BLACK ECONOMIC EMPOWERMENT TRENDS IN SOUTH
AFRICA
1) South Africa gained its freedom from the white minority rule in 1994 (Balshaw &
Goldberg, 2005: 16).
2) According to Whiteford (2005: 4), although South Africa gained its freedom only in
1994, it introduced and published its BBBEE Act in January 2004. They started
drafting guidelines as early as 1996 and established the BEE Commission in 1998.
This is an achievement by a nation that gained their freedom only in 1994. However,
these laws and legislations need to be put to work, because laws without any action
are no better than not having any legislation.
3)
According to the survey done (APPENDIX C, 2007) the majority of companies in
South Africa have, in addition to the industry charters, their company-specific
BBBEE policies in place. It is good that the businesses have made an effort in
drafting and implementing their BBBEE policies. This should not be done only to
avoid prosecution but should be done in a spirit of building the nation.
4) All the industries are required by the government to have their industry BBBEE
charters (BBBEE Act 53, 2003), and they have drafted and implemented these
charters. The same arguments as for the businesses also apply to the industries. The
drafting and implementing of BBBEE policies and charters should be done in a good
spirit of nation building and not just to avoid prosecution.
5) South Africa changed its BEE to BBBEE in 2003 in order to include not only black
people but also women, youth, the disabled, and those living in rural areas
(Kgomoeswana, 2007: 1). This was a very good move by the South African
government, since it now commands support from all sectors of the society. As was
8
alluded to before, a name change alone does not mean much. It needs to be shown
that all those who are included in this broad-based approach are really empowered.
6) BBBEE deals or agreements are being signed on an ongoing basis (Sunday Times,
2007: 36). Also for South Africa this is a sign that at least some of the businesses are
making an effort to empower others, and although not everybody is happy with the
efforts made so far, one has to appreciate the fact that there is progress.
7) According to the South African Institute of Race Relations (SAIRR) the BBBEE
agreements signed so far only benefited those who are well connected, either with
highly-placed politicians or other well-established business people (Sunday Times,
2007: 29).
8) The government of South Africa introduced EE acts in 1998 (Act no. 58, 1998).
9) In 1994 South Africa adopted the Reconstruction and Development Programme
(RDP) as a policy framework that focuses on redressing the social imbalances created
by the apartheid government to the majority of the population of South Africa
(Knight, 2001: 4). In 1996 the ANC adopted the Growth, Employment and
Redistribution macroeconomic strategy, or GEAR. This is a strategy for rebuilding
and restructuring the economy in line with the main principles of the RDP (Knight,
2001: 4). Both these programmes (RDP and GEAR) are the forerunners of BBBEE,
although they were not inclusive of all those who had been marginalized.
10) There is noticeable involvement of the public and private sectors and the NGOs in
realizing the BBBEE strategy in South Africa, although to a very marginal extent
(Whiteford, 2005: 13).
11) There is very strong criticism from different quarters on BBBEE in South Africa
(Janisch, 2006: 3). The situation here is similar to that in Namibia. Criticism from the
quarters affected negatively needs to be attended to as a matter of urgency. If the
authorities want the South African nation to embrace BBBEE and its initiatives, they
have to lay these criticisms to rest. The criticisms come from those who feel left out,
and as long as these people feel that they are not part of BEE, the authorities will not
be able to make a success of their endeavour to empower people.
12) In order to encourage and facilitate the adoption of BBBEE by promoting the
procurement of certain goods and services from black-owned and black-empowered
9
companies the government implemented the preferential procurement policy in 2000
(Balshaw & Goldberg, 2005: 210). This is a very good measure, as it will force both
the companies and the industries to accept and implement the preferential
procurement policies as opposed to what is happening in Namibia. However, despite
all these efforts by the government, procurement from black suppliers is still an issue.
The preferential procurement policy needs to go hand in hand with the BBBEE score
card and the codes of good practice in order to ensure that it works effectively and
fulfils the purpose it was created for.
13) The Department of Trade and Industry released Draft Codes of Good Practice in 2004
(Balshaw & Goldberg, 2005: 65)
14) The Department of Trade and Industry released BBBEE Codes of Good Practice in
2005 (Balshaw & Goldberg, 2005: 65).
1.4
COMPARING THE NAMIBIAN AND SOUTH AFRICAN SITUATIONS
Comparing the trends in Namibia and South Africa one realizes that there are similarities in
the events that led up to the establishment of BEE and BBBEE for Namibia and South Africa
respectively. Being a young democracy, one can see that South Africa has achieved a lot, as
they have already implemented their BBBEE policy, preferential procurement policy (as
opposed to Namibia who has a policy only for the mining industry) and codes of good
practice.
It is clear that Namibia can learn a lot from fast-moving South Africa and that it needs to pick
up its pace, as frustrations are building up among those who were previously disadvantaged
and are still marginalized.
1.5
OBJECTIVES OF THE STUDY
The objective of this study is to establish the following:
 How long will it take before those who were previously disadvantaged are
economically empowered?
 Regarding those who have been economically empowered so far with the support of
BEE, how are they plowing back into their communities?
 Is Namibia progressing well with regard to BEE?
 What are the authorities doing to promote and implement BEE in Namibia?
10
 Where is Namibia with regard to BEE, where does it want to be and how will it get
there?
 Is there any commitment from business and the communities regarding BEE in
Namibia?
At this point in time these questions cannot be answered fully. This investigation will be an
eye opener and most probably guide or assist the powers that be on where they are currently,
what they need to do and how far they can go. The challenge, however, is that there is no
policy yet on BEE in Namibia. The purpose of this research is to look at what BEE means to
Namibia and the impact it has on development in Namibia.
1.6
1.6.1
DEFINITION OF THE RESEARCH PROBLEM
Problem statement
By the time Namibia and South Africa gained their independence and freedom in 1990 and
1994 respectively, the economies were controlled by white settler minorities and transnational
corporations (TNCs) based in Europe and/or the United States of America (USA). These two
African countries were forced to look at means of ensuring equitable distribution of the
wealth of their countries to the previously disadvantaged groups, and this is where BEE was
born. BEE is not about empowering the black elite or the middle class at the expense of those
who really need to be economically empowered. It is about allowing every citizen of the
country to participate fully in the economic development of the country; and since there is a
group of disadvantaged people who were excluded from participation in the mainstream
economy of the past, these are imbalances which need to be amended (Gaomab, 2004: 8).
This research will focus on the current status of BEE in Namibia and will establish the future
direction for Namibia with regard to BEE. The study will recommend to the Namibian
government the possible and more practical ways to achieve BBBEE. Hence, this study will
investigate the impact of BEE on the Namibian society, and the status of BEE in Namibia. It
will also provide recommendations as to how Namibia can empower its people without
excluding a single person. South Africa will be used as the benchmark. The reason for
choosing South Africa as the benchmark is mainly because South Africa and Namibia share a
similar history, as Namibia was colonized by the former South African government for over
seventy five years. Namibia was governed under South African rule as if it was one of the
provinces of South Africa. In addition to sharing the history, the two countries also share
similar political and economic structures.
11
Early indications are that Namibia does not have a policy on BEE yet. There is, however, an
awareness of BEE, but whether all the parties, including the government, public and private
sectors, businesses and the public in general embrace this ideology still needs to be
established.
The present study aims to establish whether BEE has created any economic benefits for the
previously disadvantaged or whether it only benefits those who are already economically
wealth-off.
1.6.2
Hypothesis
Those still affected by abject poverty believe and argue that either there is no BEE in
Namibia, or if there is, it only benefits the few selected elite or the middle class. The
following hypotheses need to be proved during this research:
 BEE has resulted in the development of Namibian society as a whole.
 Looking at South Africa, it seems that it is far advanced in driving the BBBEE
initiative. Namibia can use South Africa as an example and learn a few lessons from
South Africa’s experience.
 BEE implementation in Namibia will assist in introducing equality and inclusivity and
removal of unfair discrimination, without giving any citizen preferential treatment.
 Since South Africa’s BBBEE approach seems to be successful, Namibia has to learn
many lessons from its experiences.
 BEE means inclusion of all the people of Namibian society, and it should have an
impact on the development of the Namibian economy.
1.6.3
Research methodology
This research was conducted in Namibia, but was also partly done in South Africa for the
purpose of benchmarking. For the purpose of this investigation both qualitative and
quantitative methods have been used. Since Namibia does not have a BEE policy, statements
and comments made by business leaders, trade unionists and politicians were studied and
analyzed.
In Namibia, surveys were done (by means of questionnaires) on a broad spectrum of
businesses, including companies that have benefited from BEE, state-owned enterprises
(SOEs), government institutions and small and medium enterprises (SMEs). A draft
12
questionnaire is attached as Appendix A. A few selected individuals were also interviewed
either face-to-face or by means of a questionnaire. All of these individuals were non-business
people, who represented the following groups: people who were unemployed, those who were
employed but found it very difficult to get promoted into higher positions and those who
intended to start their own businesses but could not succeed, due to lack of finances. Five
individuals from each group were selected for the interview. These people were selected in
order to establish how non-business people and those at the grassroots level felt about BEE.
There is no doubt that these groups of individuals are representative of the majority of
Namibia’s population.
In addition to the generated data, secondary data such as reports, statements and comments by
politicians, academics, trade union officials and economists, have also been used as tools to
explore the meaning of BEE in the Namibian context as well as its impact on Namibian
society.
Policy documents on BBBEE in South Africa were studied and interviews (in the form of
questionnaires) were conducted with a representative sample of government officials and
other individuals. As was the case in Namibia, all of these individuals were non-business
people who came from the following groups: people who were unemployed, those who were
employed but found it very difficult to get promotions and those who intended to start their
own businesses but could not succeed, due to lack of finances. The sample differed from
Namibia in the respect that in South Africa only three individuals were selected from each
group of people. Information was gathered from secondary sources on a broad spectrum of
companies and also from individuals who have benefited from BEE.
Data from different sectors were compared and also measured against targets set by different
sectors or industries in their sectoral charters. Data from different industries in Namibia were
also compared to similar industries in South Africa. In order to determine whether there has
been any progress in terms of BEE since Namibia’s independence eighteen years ago, the
results obtained during this study were compared to the figures that were available at that
time.
1.6.4
Delimitation
This study will not cover the AA and the EE issues in detail. The idea of this study is not to
point out the so-called culprits and expose them for possible prosecution. Neither will this
13
study recommend any action to be taken against those who are thought to have benefited
illegally from BEE at the expense of those who need to be empowered.
This study will cover the origin of BEE, what exactly it means to Namibia and its impact on
the Namibian economy. In addition, this study will look at the status of BEE in Namibia and
make recommendations to the relevant authorities on what they need to do in order to get
where they want to be. As mentioned earlier the study will use BBBEE in South Africa as a
benchmark.
1.7
1.7.1
DEFINITION OF CONCEPTS
Black Economic Empowerment
According to the former prime minister of Namibia (Gurirab, 2004: 2) BEE is generally
defined as an integrated and broad-based economic process aimed at redressing the inequities
created by the past discriminatory system, within the context of the country’s national
development programme. Gurirab (2004: 3) states that BEE is aimed at redressing imbalances
of the past by seeking to substantially and equitably transfer and confer the ownership,
management, control and development of Namibia’s financial and economic resources to
those who were previously disadvantaged, to meaningfully reflect the demographics of
Namibia.
BEE seeks to ensure broader and meaningful participation in the economy by previously
disadvantaged Namibians (PDNs) in order to achieve sustainable development and prosperity
for all Namibians. BEE should and must be broad based to accelerate the economic
empowerment of previously disadvantaged sections of the Namibian society (Gaomab, 2005:
2).
Namibia has gained its political independence, and this is a gateway to ensuring that the
wealth of the country be redistributed to the rest of its citizens. However, without the
enforcement of necessary legislations, it is unlikely that the wealth distribution will take place
automatically.
1.7.2
Broad-Based Black Economic Empowerment
According to the BBBEE bill (B27, 2003: 5) published in South Africa, BBBEE means the
active participation in the economic activities by all black people, women, workers, youth,
people with disabilities and people living in rural areas through diverse but integrated socioeconomic strategies. In South Africa, as is the case in Namibia, it is also aimed at redressing
14
the inequities created by the past discriminatory system by seeking to substantially and
equitably transfer and confer the ownership, management, control and development of South
Africa’s financial and economic resources to those who were previously marginalized from
participating directly in the country’s economic development.
It is broad based in the sense that it not only empowers people in terms of ownership and
management of the enterprises, but also in terms of skills development, EE, enterprise
development and preferential procurement (B27, 2003: 6). This is where BBBEE essentially
differs from BEE.
1.7.3
Middle Class
Middle class refers to a group of people who are regarded as being better-off financially in a
particular society or organization. These are business and professional people who fall
between the upper and working class (Katswara, 2004: 15). For the purpose of this research
middle class refers to those black people who are regarded as best or well-off in the
communities in which they live and operate.
1.7.4
Economic Wealth
Economic wealth means the wealth of the country. It includes (but is not limited to) the
mineral resources of the country, ownership and control of these mineral resources, human
resources development, distribution of income, preferential procurement and EE (Gaomab,
2004: 11).
1.7.5
Black people
It is a generic term which refers to all people, excluding white people, especially in the
Namibian context. According to Gaomab, the president of the Namibian Economic Society
(NES), the definition of ‘black’ refers to the previously disadvantaged communities and
individuals that were subjected most to exclusion in the historical past, including women and
people with disabilities (Gaomab, 2005: 5). In South Africa the terms black, non-white and
people of colour are used interchangeably.
1.7.6
Previously Disadvantaged Namibians
This term PDN is used to describe all the black people, women, people with disabilities and
other minority groups, such as the San or Bushmen, who were marginalized. Women and
people with disabilities include both white and black people (Gaomab, 2005: 5 & 6).
15
1.7.7
Transnational Corporations
Transnational corporations (TNCs), also called multinational corporations (MNCs) are those
corporations which operate in more than one country or nation at a time (Karliner, 1997: 38).
They have become some of the most powerful economic and political entities in the world.
According to Karliner (1997: 39), many of these companies have far more power than the
nation-states across whose borders they operate.
For example, the combined revenues of just General Motors and Ford, which are the two
largest automobile corporations in the world, exceed the combined gross domestic product
(GDP) for all of sub-Saharan Africa (Karliner, 1997: 39). The combined sales of Mitsubishi,
Mitsui, ITOCHU, Sumitomo, Marubeni, and Nissho Iwai, Japan’s top six Sogo Sosha or
trading companies, are nearly equivalent to the combined GDP of all of South America.
Transnational corporations hold close to ninety percent of all technology and product patents
worldwide, and are involved in seventy percent of world trade (Karliner, 1997: 41). However,
it cannot be quantified how much these transnational corporations have contributed to the
economic development of the African countries in which they operate.
According to Karliner (1998: 27) the number of transnational corporations in the world has
jumped from 7,000 in 1970 to 40,000 in 1995. While global in reach, these corporations’
home bases are concentrated in the northern industrialized countries, where ninety percent of
all transnational corporations are based. More than half of these corporations come from just
five nations: France, Germany, the Netherlands, Japan and the United States. None of these
corporations are headquartered in Namibia, in particular, or Africa in general. A few of the
transnational corporations have operations in Namibia, and these are Rio Tinto Zinc, De
Beers, Coca-Cola and Anglo American. It is fair to conclude that the wealth created by these
companies used to be transferred to where their bases are and it resulted in the exploitation of
local labour, as well as the rapid depletion of mineral resources.
1.7.8
State-Owned Enterprises
In Namibia, a bill passed by the parliament (State-owned Enterprises Governance Act, 2006)
specifically sets up a government-owned company in order to undertake a specific public
purpose with public funds or public property. A SOE is a government corporation or
government-owned corporation and it is a legal entity created by a government to exercise
some of the powers of the government. It may resemble a not-for-profit corporation as it has
no need or goal of satisfying the shareholders with return on their investment through price
16
increase or dividends. They, however, pay dividends to the government, which is in most
cases the sole shareholder.
In Namibia, businesses that are government owned include Namibia Power Corporation,
Namibia Water Corporation, Namibia Post Office, Telecom Namibia, Transnamib, Namibia
Broadcasting Corporation, Namibia Ports Authority, Namibia Development Corporation,
National Housing Enterprise and Air Namibia to mention but a few. Many countries have
government-owned businesses for operations.
1.7.9
Small and Medium Enterprises
SMEs are companies whose number of employees or turnover falls below certain limits. In
Namibia (NEPRU, 1998: 1) the government defines small businesses in the manufacturing
sector as those with employment of fewer than 10 persons, turnover of less than N$1,000,000
and with capital employed less than N$500,000. In all other sectors, a small business is
defined as one which employs fewer than 5 persons, whose turnover is less than N$250,000
and capital employed less than N$100,000. Beyene (2000b: 12) states that in the world in
general there is hardly a uniform definition for SMEs, as the limitations differ from country to
country.
SMEs are universally acknowledged as effective instruments for employment generation and
economic growth. According to Beyene (2000b: 17), in Africa, where the private sector is not
well developed, SMEs could play a critical role in stimulating development and alleviating
poverty. When combined, they make up a large portion of employment of previously
disadvantaged people, specifically un- or undereducated, compared to the other sectors of the
industry.
1.7.10 Affirmative Action
According to Namibia’s Affirmative Action Employment Act (Act 29, 1998), AA means
positive steps taken to increase the representation of women, disabled people and black
people in areas of employment, education, and business from which they have been
historically excluded (Gaomab, 2004: 8). When those steps involve preferential selection,
which means selecting people on the basis of race, gender, or ethnicity, AA generates intense
controversy. AA refers to concrete steps that are taken not only to eliminate discrimination —
whether in employment, education, or contracting—but also in attempting to redress the
effects of past discrimination. The underlying motive for AA is the principle of equal
17
opportunity, which holds that all persons have the right to equal access to self-development.
In other words, persons with equal abilities should have equal opportunities.
The development, defense, and contestation of preferential AA have proceeded along two
paths. One has been legal and administrative as courts, legislatures, and executive
departments of government have made and applied rules requiring AA. The other has been the
path of public debate, where the practice of preferential treatment has spawned a vast
literature, pro and con.
Some groups that are targeted for AA are characterized by race, gender, ethnicity, or disability
status. In Namibia, the focus has been primarily race-based and, to a lesser extent, genderbased discrimination. When members of targeted groups are actively sought or preferred, the
reason given is usually that this is necessary to compensate for advantages that other groups
are said to have had, such as through institutional racism or institutional sexism or historical
circumstances.
Madi (1993: 3) reports that AA already existed from the early fifties to the seventies in South
Africa, as about all the apartheid laws passed by the Nationalist government were inspired by
a strong sense of AA, which favoured whites in general and Afrikaners in particular.
However, when it comes to black advancement, it can only be traced back as far as the midto late seventies. Since there were no documented policies regarding AA with regard to
advancing black South Africans, one cannot say that it was well regulated or that the
intentions were in favour of black people.
1.7.11 Employment Equity
In Namibia, and also in South Africa, EE is an element of AA. According to research done by
Schwellnus (2000: 37), the stated purpose of South Africa’s EE act (Act No. 58, 1998) is “to
achieve equity in the workplace by (a) promoting equal opportunity and fair treatment in
employment through elimination of unfair discrimination, and (b) implementing affirmative
action measures to redress disadvantages in employment experienced by designated groups,
and to ensure their equitable representation in all occupational categories and levels in the
workforce.”
As per Namibian government’s AA and EE act (Act No. 29, 1998) it is “a serious attempt at
bringing about equality of opportunity in employment, improving conditions of
disadvantaged, and eliminating discrimination.” The Act also provides for the establishment
18
and appointment of an Employment Equity Commission (EEC), whose functions are to
establish awards recognizing achievements in furthering its objectives.
In his book, Gutto (2001: 12) states that equality includes the full and equal enjoyment of all
rights and freedoms by all. This, of course, refers to all the people, including white people, in
the country.
All companies (private and public) with more than 50 employees are required by the
Namibian government to present AA plans to the newly created EEC (Act No. 58, 1998),
which will advise employers and supervise the implementation of the AA policy.
19
CHAPTER 2
LITERATURE REVIEW
2.1
INTRODUCTION
Namibia gained its independence in 1990 and to date it has no policy on BEE (Gaomab, 2004:
7). The office of the prime minister has been spearheading the BEE process since 2000 and,
since then, a technical committee has been established to come up with a legislative
framework (Institute for Public Policy Research, 2007: 11). Despite the absence of any BEE
policy, it is clear that there are signs of BEE in some sectors of the Namibian economy.
Whether these signs that are visible are an indication of empowering the previously
disadvantaged people in the true sense of the word, still needs to be determined.
Whiteford (2005: 2) states that there are five key success factors for BEE in corporate
business and they are as follows:
 Good governance.
 Diversity practice and leadership participation.
 Unbiased rewarding of performance.
 Employing of good financial sense.
 Embracing change and good financial sense.
The above factors are not exhaustive, as there are many other factors to look at as explained
by Balshaw and Goldberg (2005: 19). It is not clear from Whiteford’s (2005: 2) arguments
whether, for BEE to be a success, all five of these key success factors should be present
simultaneously. It will, nevertheless, make good business sense for all of the above to be
adhered to. If your business objectives demand that you embark on any of the
abovementioned key success factors, so be it, because one cannot argue that the presence of
these factors necessarily means the presence of BEE. It is just good business practice or good
‘businessmanship’.
However, for BEE to be a success in corporate business, at least some of these factors, in
addition to the seven elements as mentioned by Balshaw, et al. (2005: 19), need to be put into
place. Many firms do have good governance, they practice diversity, they are doing very well
financially and it is also stated in their company policies that they do reward their employees
20
in an unbiased way, but that can, nevertheless, not be taken as a guarantee to success in BEE.
The question that needs to be answered is: to what extent are those who were previously
disadvantaged involved in all these activities of corporate businesses? These people need to
be part of strategic decision making.
Madi (1997: 71) believes that BEE can only take place if thousands of unemployed people in
the townships of South Africa get employment. Although the middle class of black people is
growing fast in Namibia, it cannot be said that they are representative of the people who are at
the grassroots level. Strong criticisms, which come from different sectors in Namibia, are
some of the indicators that BEE is not well received, especially in the areas that are known to
be formerly poor or neglected in terms of economic development. There are unprecedented
black empowerment deals in Namibia, and also in South Africa, but it begs the question;
which black people are being empowered if hundreds of thousands, if not millions, can still be
described as living in extreme poverty?
Critics of AA believe that there are other remedies that can help address the issues without
creating new problems (Eisaguirre, 1999: 17). They argue that it will be fair to select people
based on class, rather than race, gender or ethnicity. These proponents continue to state that it
is fundamentally unfair to grant preference to a woman or a person of colour (black) if they
have never suffered any economic discrimination or hardship. It would, however, be difficult
to ascertain which black people did not suffer any economic discrimination or hardship. In the
same vein it would be a challenge to the government of the day to ascertain which white
people suffered economic discrimination or hardship. Although these arguments make sense,
to a certain extent, it would be fair to acknowledge that not a single black person was spared
by the previous apartheid regime, unless it was for a reason that would benefit the same
regime in perpetuating its tactic of divide and rule.
According to the report by the National Planning Commission Secretariat (National Planning
Commission Secretariat, 2001), Namibia has a Gini-coefficient of 0.67 and it is regarded as
one of the countries with high levels of income distribution inequalities. High wealth and
extreme poverty exist side by side, with the richest 10% of society receiving 65% of the total
income. This gap in income distribution is continuously increased by the current trend of
BEE, as seemingly the rich black middle class becomes richer and the poor become poorer.
The distribution of wealth is still skewed, as it seems to be moving from one extreme to the
other extreme, in a sense that only a small number of the people who were previously
disadvantaged, became extremely rich while the majority still remains highly impoverished.
21
Unless the people in authority come up with ways of balancing wealth distribution, the black
middle class in Namibia, and also in South Africa, will grow very fast, thus increasing the gap
in income distribution. In order to benefit all the previously disadvantaged people equally, the
system of graduating out of the BEE deals must be established. Those who have already
benefited from the system should not be allowed to benefit again for a certain period of time
and should give others a chance to also take part.
2.2
NATIONAL DEVELOPMENT PLAN
In the absence of a national BEE policy or act, the national development plan (NDP) is the
basic socio-economic policy framework of the government (NCCI, 2003: 8). The NDP
attempts to address the backlogs that were created in Namibian society by the former
repressive laws. The NDP outlines Namibia’s five year plan in its different sections between
NDP2 and NDP7. It addresses the question of de-racializing the Namibian economy and it is
believed that it is the Namibian government’s way of presenting the objective of BEE in a
more practical way. However, these objectives cannot be achieved unless there is a legal
framework urging all the parties involved, including the government, the private sector and
the non-governmental organizations, to embrace it and work together towards a common goal.
The attainment of rapid economic growth as outlined in the NDP (National Development Plan
Volume 1 & 2, 2000) cannot be achieved unless there is a fundamental shift in approach by all
the sectors in the society, including businesses owned and managed by those who were
previously advantaged. In the NDP the need for addressing the previous imbalances is
mentioned, but no mention is made of how and when to address these imbalances. In other
words, there are no clear targets and guidelines on how to achieve the empowerment of
previously disadvantaged Namibians.
2.3
VISION 2030
According to the former president of the Republic of Namibia, Dr. Sam Nujoma, the goal of
Vision 2030 is to improve the quality of the life of Namibians and bring it to the level of their
counterparts in the developed world by 2030 (Vision 2030, 2004: 7). It is important for a
nation to have goals, but it is equally important for a nation to do self assessment in order for
them to know where they are currently. In order to achieve its goals the country needs to
develop the necessary tools in the areas of finance and human resources as well as equipment.
According to the former president, the document presents a clear view of where the country
is, where it wants to go from here and over what time frame. What one does not see, however,
22
is how Namibia wants to get where it wants to be by 2030. This vision was devised and
implemented so as to serve as a guide to Namibia’s five-year development plans from NDP2
to NDP7, and also to provide direction to government ministries, the private sector, NGOs,
civil society, and regional and local government authorities (Vision 2030, 2004: 7). With this
document being active for the past four years, not much has changed compared to ten years
ago in Namibia; it is more like business as usual for the Namibian society.
Although Vision 2030 is expected to reduce inequalities, there seems to be no significant
improvement in terms of equal treatment. One of the goals in Vision 2030 is for Namibia to
enjoy permanent peace and political stability (Vision 2030, 2004:17). There is no doubt that
Namibia is enjoying peace and political stability; this is what foreign investors are looking at.
The challenge, nevertheless, is for the Namibian government to ensure that these investors go
into partnership with properly identified previously disadvantaged Namibians so as to bring
them into the mainstream economy of the country.
Vision 2030 points out good milestones and targets that need to be established by the year
2030. The challenge for the authorities, however, is putting step by step ways and processes
into place so that the set milestones and targets could be reached within the specified
timeframe.
Although the intention of this document (Vision 2030) was to improve the life of ordinary
Namibians systematically, no mention is made of BEE.
2.4
NAMIBIAN
GOVERNMENT’S
SUPPORT
TO
BLACK
ECONOMIC
EMPOWERMENT
Although the Namibian government has so far failed to deliver a long-awaited policy on BEE,
it strongly supports BEE measures, which improves the opportunities for previously
disadvantaged groups to establish themselves in the private sector. Although the government
does not have a codified BEE program, the Ministry of Labour and Social Welfare’s equity
commission requires all firms to develop an AA plan for management positions and to report
annually on its implementation. Namibia’s AA act strives to create equal employment
opportunities, improve conditions for the historically disadvantaged, and eliminate
discrimination. These AA plans, however, seem to be flawed, as some companies were
reported to have submitted false information.
In 2000 the Namibian cabinet tasked the Office of the Prime Minister to come up with a
national framework which would regulate the economic empowerment of previously
23
disadvantaged Namibians (Institute for Public Policy Research, 2007: 11). What is worrying
is that, after so many years, the Office of the Prime Minister has failed to present a BEE
policy.
In 2003 the Namibian government came up with the NDP. The idea of this plan was to
formulate the objectives of the still-to-be-implemented BEE plan in a more practical way
(NCCI, 2003: 8). It is believed that the NDP will assist the Government in identifying areas
and individuals who need to be empowered. It is important for the government to not only
identify who is to be empowered, but to clarify who is empowered, who has been empowered
and who is not, so that those who have been empowered can graduate out of the system.
In 2005 the Namibian government showed its commitment to BEE by bailing out a failing
garment factory, which was 51% black owned, by injecting N$3.5 million into the business
(The Namibian, 2005: 13). There are, however, criticisms that this rescue action was a sign of
nepotism as the owner of this company was closely related to the then president of the
Republic of Namibia. Although it is true that there is a close relationship between the two,
one cannot substantiate these allegations of nepotism with facts.
2.5
FOREIGN INVESTMENT AND BLACK ECONOMIC EMPOWERMENT
In Namibia, foreign investors are required, where possible, to team up with local BEE
companies by means of joint ventures. This will allow the previously disadvantaged black
businesses to acquire necessary skills that will enable them to manage their own businesses
instead of just becoming silent partners.
According to a report in the Namibia Economist (Katswara, 2001: 13), international
investment, mostly South African, has historically played an important role in the economy of
Namibia. In addition, there are significant United Kingdom, United States of American and
Australian investments in the mining industry in Namibia. Recently, exploration of uranium
in Namibia has been mushrooming. Despite all these foreign investments, one sees hardly any
partnerships between the foreign international investors and their Namibian counterparts, not
to mention the previously disadvantaged Namibians. One could argue that black Namibians
are risk averse, as they are very reluctant to take risks in terms of registering and owning
businesses. Without owning a business, the chances of being considered for partnering with
foreign investors for the purpose of empowerment is very remote.
On the other hand, there are also international oil and gas companies operating in Namibia.
Here one can cite as examples BP, Shell, Engen and Caltex of which some are operated as
24
franchises by previously disadvantaged Namibians (Namibia Economist, 2005: 13). In most
cases these companies operate gas filling stations which generate income for the franchisees
and in so doing contribute to the economy of the country. The challenge, however, is that
because they are owned by foreign companies, a great part of the generated income leaves the
country.
The idea of partnering or teaming up of foreign investors with Namibian companies is for the
foreign investors to assist the Namibian companies in identifying and addressing issues and
skills needed for running a business, and gaining the insights, knowledge and experience
needed to solve problems and implement changes where necessary. What the BEE companies
in Namibia need is coaching, mentoring, training, technical assistance and resource
networking.
Namibia relaxed its foreign investment legislation in 1990, and in 1993 a program of privatesector investment incentives was introduced, which included lower taxes, grants and
development loans. Annual foreign direct investment (FDI) inflows to Namibia reached a
high of $153.4 million in 2000, up from $84 million in 1997. In 2001, FDI inflow decreased
to $99.2 million (Namibia Economist, 2001: 14). These are just signs which indicate that
Namibia needs to do more than just relying on investment incentives if it wants to attract and
keep foreign investors.
Kaira, of the Namibia Economist (2005: 15), says that the climate for foreign investment in
Namibia is conducive. However, even if this is the case, one could argue that foreign
investment is negligible in Namibia and needs more attention. What also plays a role in
attracting foreign investors is the confidence they have in the political leadership. If the
investors think that there needs to be a change in the political leadership of the country, they
tend to withdraw their investments and redirect to countries where they think the leaders can
create an environment conducive to investing their funds.
2.6
PRIVATE SECTOR AND BLACK ECONOMIC EMPOWERMENT
To boost the economy, create more jobs and generate more wealth for the country, Namibia
needs to attract more private sector investment, both local and foreign. According to the
Namibia Economist (Kaira, 2005: 13), a prominent local businessman and executive chairman
of the Pupkewitz Group of Companies, Harold Pupkewitz, is of the opinion that increased
private sector fixed investment in Namibia is vital for the Namibian government programs
25
aimed at improving health, education, housing and the economic infrastructure – all of which
depend on a reliable and growing flow of tax income from the private sector and employees.
As is the case in any other economy, the private sector is the biggest contributor to the GDP
of Namibia. One of the major disincentives, in the private sector in particular and in Namibia
in general, is the severe shortage of competent technical and managerial personnel who are
previously disadvantaged Namibians (The Namibian, 2005: 19). The only answer to this
problem is to increase the supply of well-educated and motivated black Namibians in the
managerial and technical fields. In the short term this means making it as easy as possible for
skilled foreigners to come to Namibia, either as employees who will train and develop
Namibians or to invest as entrepreneurs in their own right. The long-term solution to the skills
shortage will be to produce more vocationally qualified school leavers, who are ready to enter
the labour market. These vocationally qualified school leavers must be prepared to compete in
the knowledge-based economy.
2.6.1
Mining industry
According to the general manager of the Chamber of Mines of Namibia, Veston Malango
(The Namibian, 2006: 9), the mining industry in Namibia accounts for over 12% of GDP and
50% of foreign exchange earnings and it is the largest private sector area of employment. The
most valuable minerals in Namibia are diamonds, uranium, copper, silver, lead, zinc, gold,
pyrite and salt. As much as this industry is the largest private sector area of employment in
Namibia, one cannot see that the ownership and management in this sector is representative of
previously disadvantaged Namibians.
Malango (The Namibian, 2006: 10) argues that the mining industry is the backbone of the
Namibian economy and will continue to be so for generations to come, provided that the
Namibians do the right things now. He put emphasis on the fact that the processing of work
permits and work visas is going at a snail’s pace. In this way the country loses experts to other
African countries that are fast in issuing the necessary permits. It is true that Namibia loses
skills to other countries, but what one should keep in mind is that it will not serve the nation
well to just process the work permits and visas because there is a cry from the private sector
that there is a lack of qualified personnel. The authorities in charge of issuing these permits
and visas should make sure that there is a process of skills transfer and succession planning in
place before allowing the influx of foreign nationals. This process of scrutinizing is normally
an extended process, hence the “snail’s pace” referred to by Malango (The Namibian, 2006:
10).
26
One could argue that the Namibian government is doing the right thing by not offering work
permits and work visas to foreigners, since in this way Namibia gives those who were
previously disadvantaged the opportunity to be employed in the right positions and contribute
in so doing to the development of Namibia. However, there needs to be skills transfer from
those having it to those without it. For this skills transfer process to take place Namibia needs
experts with the necessary skills, qualifications and experience to enter the mining industry in
Namibia. These experts can, in most cases, only be drawn from foreign countries, including
other African countries.
To promote BEE in the local mining industry, the Namibian Preferential Procurement Council
(NPPC) was launched in December 2005 (Katswara, 2005: 15). According to Katswara this
was an initiative of the Namibia Chamber of Mines, Namdeb Diamond Mine, Rosh Pinah and
Skorpion Zinc Mines. The launch of the NPPC served to formalize the BEE preferential
procurement initiative and the accredited supplier database. The NPPC aims to convey a
message to all mining suppliers, participating organizations and institutions that supplier
companies are now to conform to the proposed BBBEE scorecard, which Namibia is in the
process of drafting.
According to the Namibian minister of Mines and Energy, although economic transformation
was normally a difficult and controversial journey, he was happy with the progress made so
far with empowerment policies being used by various mining companies in the south of
Namibia (The Namibian, 2005: 16). The empowerment policy that the minister was referring
to is nothing other than preferential procurement. BEE in the mining industry still needs to
prove itself, as many people, especially in the mining industry, are very skeptical about its
existence or its impact on the suffering masses.
When one looks at what is happening in the industry in terms of putting previously
disadvantaged people in strategic positions, it is clear that more still needs to be done. To
have a general feeling of what is happening, one does not need to do an in-depth survey. Just
a quick glance through the boards of directors and members of senior management of wellknown mines such as Namdeb, Wheaterly International, Navachab Gold Mine, Rossing
Uranium Mine, Skorpion Zinc Mine and Rosh Pinah Zinc Mine, gives an indication that
either nothing has been done since Namibia’s independence or the transformation process is
moving at a very slow pace.
27
One cannot help but wonder whether government institutions, such as the offices of the EE
and AA which are employed as watch dogs, are aware of their respective responsibilities.
2.6.2
Financial industry
Financial institutions, especially the prominent banks and insurance companies, have the
history of being owned and run by previously advantaged Namibians. According to the
Namibian Institute for Public Policy Research (IPPR, 2007: 21) most of the major Namibian
financial companies have their head offices in South Africa. After independence, and more
specifically recently, these institutions have embarked on the process of appointing previously
disadvantaged Namibians as managing directors and CEOs. This trend in the appointment of
black Namibians is questionable as it seems to be benefiting only a handful and that these
partners simply act as a façade for BEE as opposed to a truly legitimate tool for
empowerment.
When one looks at the top management structures of these very same institutions, however, it
is clear that not much has changed since independence. Emphasis needs to be put on the
implementation of suitable structures, in order to pave the way for the advancement of
historically disadvantaged Namibians into managerial positions.
In one of the banks surveyed, the top management consists of eighteen members, including
the managing director, of which all are white and they include both Namibians and South
Africans. Although about 30% of the top management are female, who also happen to be
previously advantaged, much needs to be done to encourage BEE in institutions such as these.
According to a report in the Namibia Economist (Katswara, 2005: 16) the excuses that are
used for not appointing black Namibians are the lack of properly qualified personnel among
black people and also, in most cases, lack of experience, as these are technical or specialized
fields, and that it requires at least ten years of training for a person to qualify as a banker. If
this argument holds water, it is an unfortunate situation, as very few black Namibians have a
minimum of ten years experience within the financial field.
The Namibian government requested all the companies to submit AA reports as per the AA
act of 1998 (Act 29: 1998). In their reports, most of the companies set out targets that they
would want to meet, but in spite of this, progress on the process of corporate advancement has
been very slow, given the fact that it is seventeen years after Namibia became independent.
What one realizes here, after having interviewed some of the employees as per attached
survey questionnaire (APPENDIX D: 2007), is that there is generally a lack of training for the
28
previously disadvantaged Namibians to qualify them to take up positions which could enable
them to either own or manage these institutions. There is a need for the establishment of a
funding scheme for training, similar to the one in South Africa (Institute for Public Policy
Research, 2005: 17), whereby companies in the private sector could contribute to it.
One must appreciate the fact that, although the process of fast tracking the previously
disadvantaged Namibians is very slow, some financial institutions have already started to
enroll their employees for training through the Namibian Institute of Bankers (Manning,
2000: 31). This training does not guarantee automatic promotion into positions of
management, however; candidates need to demonstrate that they do have the skills in addition
to the training they have been equipped with. It is unfortunate that people who are in the
positions to assess these candidates once they complete their training programmes, are the
same people who need to safeguard their own positions.
The Namibia Chamber of Commerce and Industry (NCCI) suggested that ownership and
control of the banking industry must be transferred to blacks (NCCI, 2002: 5). They argue that
it must be reflected in the composition of the board of directors, shareholders and
management of banks. According to the NCCI a target of 45% of shares in the hands of those
previously disadvantaged must be set to be realized within 10 years. Their target is that there
must be 60% board membership and at least 51% management in black hands over the same
period (NCCI, 2002: 6). It has been six years since the suggestion was made and not much has
changed to date. In order to realize this dream, the training of black Namibians in bank-related
fields must be properly coordinated to produce quality black graduates for the banking sector.
Following numerous calls from the government, Namibia has moved a step closer to
implementing a financial service charter (Gawaxab, 2006: 9). The aim of this charter will be
to facilitate the participation of previously disadvantaged Namibians in the financial sector. It
is of the utmost importance that the purpose of this charter is spelled out clearly, as it needs to
provide guidelines in terms of regulating the financial sector. The Namibian financial sector is
still dominated and controlled by foreign players, as most of the banks (Standard Bank, First
National Bank, NedBank, etc.) simply serve as branches of their South African mother banks.
2.6.3
BEE within the Fishing industry
In the fishing industry BEE companies are well represented. Before independence, marine
resources utilization in Namibia was merely of an extractive nature with very little local
beneficiation and participation (Manning, 2000: 23). This situation has changed since
29
independence, as the industry now also processes fish. BEE in this sector, as Iyambo, the
Namibian minister of Fisheries and Marine Resources said (The Namibian, 2005: 18), means
greater involvement, participation and benefits for Namibians from the sector. It is, however,
noticeable that previously disadvantaged Namibians are highly involved and also participate
in this sector, as is the case in most of the other industries, but the question one is tempted to
ask is, in what capacities are they involved and in what capacities do they participate?
The fishing industry has grown to the extent that it is currently Namibia's second biggest
export earner of foreign currency after mining and it is also the third largest economic sector
in terms of contribution to the GDP of Namibia (Namibia Economist, 2004: 16). This is one
of the sectors which should show a high number of black Namibians in terms of ownership,
but it is difficult to notice this representation. The report in the Namibia Economist states that
Namibia is the top African fisheries country by production value and that the industry
employs about 14 000 workers, of which about 43% are sea-going personnel and 57% are
involved in onshore processing. However, due to the nature of the industry, most of these
employees are seasonal workers who all happen to be black Namibians. The challenge here is
that during off seasons these workers are unemployed with no income.
In the early 2000s the fishing industry was faced with reports of factory closures,
retrenchment of employees and companies being liquidated. According to a report in The
Namibian newspaper (2006: 33), the Namibian government established a technical committee
to consider relief measures for the industry. It must be stated that the positive contribution of
this committee can be seen from the manner in which this industry has been transformed.
The fishing sector was dominated by foreign players prior to Namibia’s independence.
However, the Namibian government has embarked on Namibianising the sector through the
formation of joint ventures between previously disadvantaged Namibian companies and the
foreign companies. A good approach by the Namibian government in addressing the issue of
empowerment of the previously disadvantaged Namibians is putting in place an
empowerment strategy that is aimed uniquely at maximizing the benefits of the fisheries
sector with a strong bias towards previously disadvantaged Namibians (Katswara, 2005: 17).
It is important that the Government grants rights for exploitation and also allocates quotas to
the new-comer companies, which are predominantly owned by black Namibians. One of the
ways to keep the ownership and management of the sector in the hands of black Namibians is
by making the quotas and rights given by the government non-transferable to other
companies.
30
Manning (2000: 23) is of the view that the pre-qualification criteria for the quotas and rights
are “having Namibians on board, employment of women, entering into partnerships with newcomer companies and capital investment”. This seems to be a very good initiative, as it will
result in skills and technology transfer, which are beneficial for owning and managing a
business, to the new-comer companies.
In spite of these arrangements by the government, the foreign companies have succeeded in
signing agreements that are only beneficial to them with the new-comer companies. This
trading of rights and quotas is not at all beneficial to the new-comer companies. According to
Manning, these smaller companies which are black owned have been sucked up by the
conglomerates and it has minimized the presence of black-owned companies in the industry
(2000: 26). In fact, it will be difficult for the new black-owned companies to stand on their
own, despite the fact that they were awarded rights and quotas by the government. The main
reasons for this could be a lack of access to adequate finance, and inadequate technical and
managerial support that could push the targeted groups into non-beneficial agreements with
well-established, white companies.
It is important to note that BEE in the fishing industry means acquiring ownership and control
of the fishing companies. The new-comer companies owned by black Namibians need to
participate effectively in the industry, they need to be engaged fully, be functioning fishing
companies in their own right and build up the technical and managerial skills needed to
succeed in the industry. For the above to happen, these companies need to have access to
finances, which they do not have currently.
The good thing that is happening in this industry is that there are many joint ventures between
the old fishing companies and the new ones. However, there should be a balance in the
industry in the allocation of quotas and the owners should have the authority to run and
manage the companies which they either own or which they are shareholders of.
2.6.4
Agricultural sector
Agriculture has been the backbone of the Namibian economy over the years, before and after
independence. Shejavali, of Namibia’s Institute for Public Policy Research (IPPR, 2007: 65),
argues that, although the land is already Namibian owned, commercial land and skills exist
primarily in the hands of white Namibians and absentee landlords. This is true, as the figures
show that 80% of Namibia’s arable land and 44% of total land is in the hands of just over
4000 white Namibian farmers (Gaomab, 2005: 6). It is, however, important to note that most
31
of these agricultural lands are being worked on, and in some cases managed, by black
Namibians. The fact is that the income generated by these agricultural lands never goes to
those that were previously disadvantaged. Black people in this sector are the ones who are
highly marginalized compared to other sectors in Namibia. BEE in the agricultural sector is
primarily about owning land, and not just managing it.
According to the Labour Resource and Research Institute (LaRRI) of Namibia, a seminal land
conference was held in Windhoek after independence in June 1991 and the following
resolutions were taken (Mwilima 2004: 66):
 Foreigners should not be allowed to own farmland.
 Underutilized freehold land should be reallocated.
 Land of the absentee landlords should be expropriated.
 Very large farms, and/or ownership of ‘several farms’ should not be allowed.
 Land tax must be imposed on commercial farm land.
 Living conditions of farm workers must be improved.
These resolutions were endorsed in the Namibian Constitution (Article 16, 1990) and, of
course, they needed to be carried out. However, eighteen years after independence one cannot
help but wonder about the snail’s pace at which land expropriation and redistribution are
taking place. Living conditions of farm workers have become worse, as some of the farms are
now owned by the emerging middle class black Namibians who are remiss in improving these
conditions.
Mwilima (2004: 66) further states that the Agricultural (Commercial) Land Reform Act 6 of
1995 makes provision, amongst other things, for the acquisition of agricultural land by the
state for purposes of land reform and compulsory acquisition of agricultural land. In this case,
it is important that the owner of agricultural land makes the first offer to the government
before making the offer to anybody else. The government should compel the seller to make an
offer to a third party only when the government declines to buy. When the state declines to
buy the land concerned, the government must issue the prospective seller with a certificate of
waiver in respect of the specific land on offer , and only then can a seller enter into a valid
contract of sale with a third party. This arrangement will prevent any legal complications
which might have occurred. If it does not happen, the whole process will be flawed.
32
Although some of the other sectors have drawn up their own BEE charters, the agricultural
sector is still to come up with its industry-specific charter. Nevertheless, the Namibian
government, through the Agricultural Bank of Namibia, introduced the affirmative action loan
scheme (AALS) in 1992 to enable communal farmers to acquire land in commercial areas and
to also resettle well-established and strong communal farmers in commercial areas
(AgriBank, 2000). This loan scheme is, however, not beneficial to the previously
disadvantaged people who do not even have a collateral in the form of a house or any other
property.
What one must realize is that it is more than just a redistribution of the land. In the survey
carried out by Motinga and Vigne (2005: 7) it was found that over 52% of the previously
disadvantaged farmers pointed out that they need training in a wide variety of areas.
Enhancement of skills in the areas of farming and farm management is essential for the
success of black farmer empowerment. It is only through the acquisition of these skills that
previously disadvantaged farmers can become able to farm successfully commercially and
contribute to the economic development of Namibia.
Minimum wages within this industry has been a contentious issue for the past six to seven
years. According to a report in the New Era, wages earned by farm workers cannot sustain the
daily lifestyle of these people (Katz, 2002: 8). Although the government introduced minimum
wages for farm workers in 2002 (Katz, 2002: 8), the implementation has been an issue. One
cannot say that it is the white (or the previously advantaged) farmers who maltreat farm
workers, as it was reported several times in local newspapers that black people, who bought
farms after independence and took over the farm workers, have been maltreating their
workers (Katz, 2002: 9). The contributing factor, according to the government of Namibia, is
the lack of qualified labour inspectors. One does not, however, see in the newspapers any
advertisement for bursaries or scholarships for those who would like to qualify themselves as
labour inspectors. The authorities should identify areas where there is a serious lack of skills
and ensure that plans are put into place to fill these gaps.
2.6.5
Small and Medium Enterprises
There are very few reliable data on the small business sector in Namibia, which makes data
collection and analysis somewhat of a challenge. Before Namibia’s independence the SME
sector’s role and significance were neglected. Karvinen (1999: 41) says that SMEs provide
about 60 000 full-time jobs and 100 000 part-time jobs, and its growth is about 16 000 jobs
per year compared to the growth of about 4000 jobs per year in big business sectors in
33
Namibia. These figures can, however, be as high as between 200 000 and 250 000, including
both full-time and part-time jobs, as some of the unregistered small businesses operate from
within their houses or backyards.
People are very risk averse and are too careful to either start their own businesses or join the
existing SMEs as employees. They join the SME sector as the last available option. They
need job security in terms of benefits such as a good monthly or weekly salary, pension,
medical aid, housing subsidy and a 13th cheque.
About 80% to 90% of the SME workers are previously disadvantaged Namibians of whom
the majority are female and specifically black (LaRRI & JCC, 2002: 3). SMEs are generally
regarded as the last resort of employment and people in this sector are, generally, not
professionally qualified. These are some of the factors which make it difficult for black
women to secure sponsorships to develop their small businesses.
The Namibian Government established a Small Business Credit Guarantee Trust (SBCGT) in
1999, in order to enable SMEs to have adequate access to finance. This trust is benefiting
small businesses of previously disadvantaged Namibians, as they are most affected by barriers
to access to finance. According to the CEO of the SBCGT (New Era, 2005: 15) the institution
lends out money to individuals and groups at market-related interest rates to avoid market
distortions. Although this is controlled by the commission regulating competition in Namibia,
the problem with this trust is that, in order to qualify for the loan, a guarantee or collateral is
required.
2.7
PUBLIC SECTOR AND STATE-OWNED ENTERPRISES AND BLACK
ECONOMIC EMPOWERMENT
According to a survey conducted by Jauch (2000: 19) of LaRRI, the public sector is the
biggest employer in Namibia with over one hundred thousand (100 000) employees, all of
whom are permanent employees. A very high percentage of senior and middle management in
the public sector and state-owned enterprises are previously disadvantaged Namibians. Since
the SOEs are state owned (some of them hundred percent), over 80% of their senior and
middle management are black Namibians (Jauch, 2000: 21). One can of course expect this, as
the Namibian government, being the custodian of BEE, cannot fail itself in its own
institutions.
Out of the state owned enterprises surveyed through this research (Appendix C), over 60%
were established after Namibia’s independence and transformation of these institutions was
34
fairly easy compared to those which were already in existence before independence. Those
institutions which were already in existence before Namibia’s independence underwent name
changes and, although the transformation process was too slow, one can say, today, that they
are also representative of the composition of the Namibian population.
2.8
SKILLS DEVELOPMENT
According to Goldberg and Balshaw (2005: 79), skills development refers to the
“development of core competencies in black people (or previously disadvantaged people) to
facilitate their interaction in the strategic business objectives of the organization, as well as in
the mainstream of the economy”. Core competencies are those competencies that are most
needed in managing and in leading a business. Skills development is one of the elements of
BBBEE.
There are major disparities in skills levels in Namibia. According to the Namibia Economist,
black Namibians are historically perceived as not being skilled enough to occupy certain
positions (Kaira, 2005: 17). One notices that there has been an increase in the number of
students graduating from higher educational institutions, but most of the skills developed in
these institutions are not what the market needs. The shortage of these skills leads to high
unemployment which stands at 35% (Ministry of Labour, 1998: 23). This figure could be as
high as 40%, as there are more high school dropouts from Grade 10 every year. The increase
in high school dropouts is caused by the government’s policy of not allowing those who fail
grade 10 to repeat the grade.
Because of the skills shortage in Namibia, large businesses import foreign experts to fill these
gaps. The AA act (Act 29, 1998), however, indicates the way forward by stating that the
employment of a foreigner must be coupled with having a Namibian understudy in order to
ensure transfer of specialized or scarce skills to the understudy. According to the office of the
EEC, this act only applies to large companies with more than 50 employees (Walenga: 2001).
This provides a loophole, as there are many businesses with fewer than 50 employees and
they are importing foreign experts without any conditions.
In order to advance the process of skills development and technological transfer, the
Namibian government has come up with the National Vocational Act of 1994 and established
vocational training centers in different parts of Namibia. In addition, a number of nongovernmental organizations have taken up the challenge of providing training in businessrelated skills. The challenge, however, is that students who graduate from these vocational
35
training centers find it difficult to get employment, as there is a school of thought which
believes that these institutions do not offer good quality education or training.
2.9
BLACK ECONOMIC EMPOWERMENT DEALS AND AGREEMENTS
Recently, more and more leading businesses have come out offering shareholding to the
previously disadvantaged Namibians.
According to Gaomab (2004: 7), president of the Namibian Economic Society, BEE is the
essential vehicle for poverty alleviation to the majority of the Namibian population. The
critical question, however, is whether this vehicle is used for its initial purpose, because more
and more deals that are coming out are linked in some way or other to those who are, although
previously disadvantaged, also financially well off.
Gaomab (2004: 8) further states that the proportion of top managers who are racially
disadvantaged relative to their racially advantaged counterparts grew from 67% to 69%
between 2001/02 to 2002/03. During the same period, middle management grew from 40% to
49%. These figures could be inflated by the public service and SOEs, whose black managers,
as mentioned before, are in the range of above 80%. If one excludes the public service and the
SOEs, the percentages will be much lower. To summarize, one can say that there is still much
that needs to be done in empowering black people within the private sector.
2.9.1
Old Mutual Namibia
The CEO of Old Mutual Africa Operations, Johannes Gawaxab, announced in his group
media release (The Namibian, 2006) in early September 2006 that Old Mutual Namibia has
offered direct ownership of N$308-million of its Namibian businesses to a broad range of
black shareholders. According to Gawaxab, this deal increases black equity ownership in Old
Mutual Group companies in Namibia from 18% to 30.64%, a 12.64% increase. Although the
shareholding of black Namibians increased over the years, the management of this institution
is still in the hands of white people, especially South Africans. It also begs the question
whether this ownership allows the new shareholders to control the company, or part of the
company, in terms of decision making.
2.9.2
Ongopolo Mining and Processing
Ongopolo Mining and Processing Limited is the former Tsumeb Corporation Limited (TCL)
mine which was liquidated a few years ago. The Mine Workers Union of Namibia (MUN), in
partnership with the government of the Republic of Namibia, re-opened this mine, but due to
financial and management constraints the mine was sold to Weatherly International.
36
Weatherly International now owns over 97% of Ongopolo Mining and Processing Limited
and this percentage might increase in the near future.
According to the former executive director of Specimen Mining at Ongopolo Mining and
Processing Limited, Veston Malango, his company was the first example of joint ownership
of a major mining company between workers and former management in the history of
Namibia (The Namibian, 2005: 13). It is important for companies such as this to identify core
and non-core activities in order to create business opportunities for former employees through
outsourcing and smart partnerships, as it will not serve any good purpose if the new owners
just continue with the status quo and do not give the previously disadvantaged masses,
specifically those at the bottom of the pyramid, the opportunity to be involved actively in
contributing to the economy of the country.
It is unfortunate that this company did not last very long under the ownership and
management of the previously disadvantaged Namibians. One cannot help but wonder
whether it was due to the lack of management skills, lack of finances or poor planning. It is
important, though, for the new owners to be equipped with necessary skills and also to have
access to finances in order to be effective and efficient in running their businesses.
2.9.3
First National Bank of Namibia
In December 2004 the First National Bank of Namibia announced in a press release that it
concluded a BEE deal of close to 45% with a number of Namibian black businesses (The
Namibian, 2004: 28). The consortiums that benefited from this transaction are:
 Sovereign Capital (Pty) Limited.
 Chappa' Ai Investment 42 (Pty) Limited.
 Staff and black non-executive directors.
 Effort Investment Holdings.
 NANTU - Likwafela Cooperative.
As the report stated, these are consortiums, which means that they are groups of companies.
One could argue that these consortiums are already financially stable. They are not start-up
businesses in which most of the people, who were previously disadvantaged, are involved.
Those who need to be empowered are excluded from these deals, not by their own choice, of
37
course. The deals which have been concluded empower only those who already have the
economic power.
2.9.4
Alexander Forbes Namibia
Alexander Forbes is an international financial and risk services company. It announced in
August 2007 that it would sell 30% of its business to a newly formed black empowerment
company to the total value of N$25.5-million. According to the CEO of Alexander Forbes
Namibia (The Namibian Economist, 2004: 13), the launch of the new empowerment company
and the incorporation of Namibian shareholders, who were previously disadvantaged, into the
business was expected to foster transformation and provide a long-term sustainable platform
to advance BEE and ensure continued growth of the business.
Although the agreement or the deal has not been signed yet, black empowerment partners
have been announced. As is the case with most BEE deals in Namibia, the partners identified
are well-known sports and business personalities in Namibia with other business interests.
2.9.5
Allan Gray Namibia
Allan Gray Namibia hasn’t yet signed any agreement with any black empowerment groups. It
has, however, announced that it will sign agreements very soon, some of which will include
countries other than Namibia, specifically South Africa, Botswana and Swaziland (The
Namibian Economist, 2006: 6). According to the announcement by Allan Gray Namibia these
transactions will result in 25% black empowerment shareholding in the company.
The company intends to sell 15% of its Namibian business to a BBBEE trust. Another 10% is
intended to go to the current and future staff members of Allan Gray Namibia, according to
the founder of Allan Gray Limited (The Namibian Economist, 2006: 7). The broader public of
Namibia, however, is eagerly awaiting the announcement of the 15% shareholding, as it is
still not known who the beneficiaries will be. What one can expect is that there will be
significant changes in the composition of the board of directors and possibly the top
management.
2.9.6
Olthaver and List Group of Companies
Although Olthaver and List Group of Companies has been involved in many BEE deals, the
most notable one was the handing over of a farm to its former employees, as it involves
people at the bottom of the pyramid. In June 2007, the Olthaver and List Group of Companies
donated 3200 hectares of commercial farmland to a group of about 30 ex-farm workers (The
Namibian, 2007: 12). These workers had been retrenched when, according to the
38
spokesperson of Olthaver and List Group of Companies, all farming activities on the nearby
Midgard farm were stopped in June 2005. It is important to note that in the history of Namibia
this was the first time that a company had donated a whole farm to its former workers. The
donation included all the plants and equipment on the farm, which consists of trucks and
building material, amongst other things.
Although some of the new owners of this farm had worked for the company for over twenty
years, they worked as labourers and not as managers or administrators of the farm, which are
very critical for commercial farming. For the continued success of this farm, new owners need
to be equipped with skills that are necessary to sufficiently carry the farm forward in a way
that maximizes the productivity of the farm and also in a way that contributes to the economic
development of Namibia.
2.10 BLACK ECONOMIC EMPOWERMENT CHARTERS
So far only two Namibian companies are known to have their company-specific BEE charters.
These two companies are Navachab gold mine (The Namibian, 2004: 21), known as
AngloGold Ashanti Namibia, which launched its BEE charter in 2004 and NamPower (Pty)
Ltd (NamPower Black Economic Empowerment, 2004), which also introduced its BEE policy
in 2004.
According to Old Mutual’s Managing Director of Africa Operations (Gawaxab, 2007),
different companies in the financial sector are in the process of drafting their own BEE
charters. It is, however, not known how far these drafting processes are. It would have been
far better if all the companies within this industry could team together and draw up a single
charter for the sector.
It goes without saying that having a BEE charter or a policy in place does not mean that the
company or the industry is applying the principles of BEE in managing its business. This
policy needs to be translated into action in such a way as to adhere to the requirements of the
national policies, although there are no national BEE policies in writing.
2.11 PREFERENTIAL PROCUREMENT
According to Katswara (The Namibian, 2005: 17) a group of mining companies in Southern
Namibia, namely Namibia Chamber of Mines, Namdeb, Rosh Pinah Zinc (also known as
EXXARO) and Skorpion Zinc (Anglo American) mines, formed a preferential procurement
39
database and they strictly follow the principles of the still-to-be-established mining BEE
charter.
Telecom Namibia also launched its BEE procurement policy in June 2007. Telecom Namibia
is among the first public and private sector companies to pioneer BEE through the
introduction of preferential procurement. According to the Namibian minister of Works,
Transport and Communication, the new policy aims to create guidelines for Telecom Namibia
to procure goods and services necessary for its operations through giving preference to BEE
companies (The Namibian, 2007: 8).
However, these policies on their own can never transform the national economic landscape to
the extent that poor and marginalized Namibians become active participants and contributors
to the development of their country. It is but one of the tools. In addition, for BEE
procurement policy to work effectively, there need to be supplying companies who are owned
and managed by black Namibians.
Although BEE is not a legal requirement in Namibia yet, Telecom Namibia bought goods
valued at about N$66 million and N$94.4 million from BEE companies in the 2005 and 2006
financial years respectively and this is proof of the company’s commitment to uplifting the
Namibian people (The Namibian, 2007: 8). These figures constituted 28 percent and 34
percent respectively of all orders placed with suppliers and contractors, and 25 percent and 22
percent respectively in terms of overall value of orders placed. Telecom Namibia has shown
its commitment to empowering black Namibians by making use of these BEE companies,
well before they implemented their preferential procurement policy. It showed that it is an
industry leader and a good example for the other businesses and industries to follow.
Another company that came up with a company-specific BEE procurement policy is
NamPower, which launched its policy in 2004 as part of BEE initiative in the country.
The challenge, however, is that there are not enough suppliers either in Namibia or in South
Africa representing the previously disadvantaged groups of people, since the supply industry
is capital intensive. The end result is that the purchasing companies revert back to their old
suppliers as the industry cannot be kept idle due to lack of supplies by black empowered
suppliers.
40
The government of the Republic of Namibia has designed a price preference policy with
regard to its tenders (NCCI, 2003: 8 – 9). Preference is given to potential tenders based on the
following criteria:
 The composition of management.
 Whether the shareholders of the company are black.
 Whether it is a bona fide Namibian company.
 Whether they make use of labour-based work projects.
 Employment of women and handicapped persons.
 Employment of graduates from the Vocational Training College (VTC).
 Whether the tenderers are located in communal or notified underdeveloped areas.
For the purpose of decentralization, the government should give preference to the local
tenderers in line with the need to generate employment through the recruitment of local
people.
Due to lack of capital, black-owned companies normally go for smaller projects and, by
default, the bigger projects end up with white-owned companies.
2.12 CRITICISM OF BLACK ECONOMIC EMPOWERMENT IN NAMIBIA
There is, however, a high degree of criticism from some quarters of the public, trade unionists
and politicians. There is a belief within these quarters that only a few selected elites with
political and business connections in higher circles did (and still do) benefit from BEE deals.
It is true that most of the names that are already involved in BEE deals are the very same
names that come up whenever new deals are announced. The Namibian Economist (Katswara,
2006: 19) states that the BEE deal which was recently announced by Old Mutual Namibia has
benefited only the same black middle class that some feel have already benefited handsomely
from AA since independence. This can be confirmed as most (if not all) of the beneficiaries
are either well-known politicians or public figures.
When the same group of people who have previously benefited from BEE deals continues to
benefit from every new BEE deal that emerges, such deals only widen the gap between the
haves and the have-nots. This is contrary to the principles of BEE. It is generally believed that
seventeen years after independence, not much is happening in Namibia (Gaomab, 2004: 9). If
41
not controlled properly, public procurement and other outsourcing activities by those who are
heading the government departments might turn BEE deals into self-enrichment schemes.
The current structure of the economy is inequitable, undemocratic and will not be sustainable
in the long run. The majority of Namibians are currently locked out of the ownership and
control of the economy and they may not be tolerant of the situation any longer. In the
absence of any drastic steps by the government in terms of redistributing the wealth of the
country, those locked out may take action to get a share of the economy. The government’s
program of redistributing the land is believed to be too slow and there is a fear in some
quarters that what happened in Zimbabwe might happen in Namibia.
Janisch (2006: 3) states that in South Africa BEE clustered around narrow-based principles,
whereby very few prominent black business people did big deals and became very rich. In
cases such as these, the wealth and benefits do not filter down to the rest of the black people.
This is exactly what is happening in Namibia, and without a policy which favours broadbased empowerment, it will be difficult to balance the equitable distribution of the economy.
The former secretary general of National Union of Namibian Workers (NUNW), Peter
Naholo, claimed that some corrupt government officials who are privileged with first-hand
information about prospective projects from first world countries and others, do not share the
information with the struggling historically disadvantaged businesses (The Namibian, 2005:
5). According to Naholo people in certain positions obtain important information and pass this
information on only to their close family and friends in order for them to benefit from those
projects. Naholo further states (The Namibian, 2005: 5) that these people “allocate tenders to
their close acquaintances to stand in when they are fired from their jobs”. As true as it might
be, it is very difficult to substantiate these allegations with facts.
2.13 BROAD-BASED BLACK ECONOMIC EMPOWERMENT IN SOUTH AFRICA
Although South Africa gained its freedom only in 1994, it is far more advanced in what it
calls BBBEE compared to Namibia. Whiteford (2005: 3) states that South Africa introduced
and published its BBBEE act in January 2004, but it started drafting guidelines as early as
1996 and established its BEE Commission in 1998. This is a clear indication that the new
South African government was ready to reclaim what historically belonged to the previously
disadvantaged South Africans, and that they meant business when they took over the
leadership of the country. This, however, needs very good strategic planning in terms of
equipping people with the necessary management and technical skills. According to
42
Whiteford (2005: 4) this body was established to review the empowerment process and set up
benchmarks against which future empowerment ventures could be judged.
Whiteford (2005: 4) further states that in 1996, black control of companies which were listed
on the Johannesburg Stock Exchange (JSE) was 6.3% and it dropped to 2.9% in 2000. One
should be very careful in saying that this happened because the new owners were not ready to
take up the challenges and that the whole process was done prematurely. Some of the main
reasons for this decline might be as follows:
 It might be that the black controlled companies were largely investment vehicles
which black people created with massive loans, informal savings and pension
schemes, which were used to buy huge shares of existing companies to take control.
 It might be that these investment vehicles were over-geared with heavy debt burdens.
 Lack of “true” operational control in terms of budgets, business flows, marketing,
succession planning, intellectual capital, entrepreneurship and corporate social
responsibility might have led to the fall of most of the black-controlled companies.
 A fear by black business people of taking financial risks might also be one of the
contributing factors to the decline.
Because of their historical financially poor background it is very difficult for black people to
obtain finances from financial institutions, hence the reason for using their personal savings
and pensions. This might be the reason for their fear of taking financial risks, as there is
nothing to back them up in case of a failure. In some instances blacks are given executive
positions in corporations, yet they have too little or no operational control. One can argue that
this is done only to comply with the quota system (or the requirements) of the legislation and
not for the purpose of empowering those who were previously disadvantaged.
Nearly all the industries in South Africa have their own BEE charters, for example mining,
financial services, construction industry, maritime and transport industry, tourism, petroleum
and liquid fuels sector, forwarding and clearing industry and information and communication
industry (BBBEE Act 53, 2003). This act has allowed more and more black South Africans to
enter into businesses, and skills are now being learnt and transferred, albeit at a slow pace. It
is important for all the businesses, both black and white owned, to continue to embrace BEE
and to see it as a business imperative which makes good business sense, and not just the right
thing to do.
43
BBBEE is supported by the government, businesses, tertiary institutions and trade unions.
Some optimists (Whiteford, 2005: 11) in South Africa claim that there has never been such a
speedy transfer of economic assets from one racial group to another in the history of the world
economy. Whiteford (2005: 14) also points out that some people feel that BEE is more like a
sham and that the financial institutions have only leased their assets to black people and that
they will come back soon to reclaim their assets. One must appreciate the fact that, although
the transformation process is at a pace which some call snail’s pace, there are those who are
committed to this good cause, in public as well as the private sectors.
As is the case in Namibia, some critics believe that BEE has resulted in black enrichment as
opposed to black empowerment (Mbendi, 2001). As much as these achievements have been
attained, such successes by the previously disadvantaged South Africans should not represent
the pursuit of self-interest but should benefit the majority of black South Africans.
Although South Africa has a competitive advantage in terms of empowering its previously
disadvantaged people, it also has a long way to go, as the majority of its people, especially in
rural areas, are still living in abject poverty (Madi, 1997: 96). The government has laid a
foundation and has also built a sustainable structure for the empowerment process to proceed
along, and it is now for the industries in general, and the white-owned businesses in
particular, to own and drive this process.
In terms of preferential procurement in South Africa, there is a school of thought which
believes that procurement departments in the public and private domains have empowered
thousands of black businesses across all sectors of the national economy. It, nevertheless,
needs to be proved that these newly-empowered businesses are indeed black owned or
whether black people are just shareholders, who are not involved in the day-to-day
management and decision making of these specific businesses.
According to Van Niekerk (Sunday Times, 2007: 48), CEO of Commerce Edge South Africa,
people fail to notice that most of the listed companies are distributing their money to black
empowered companies through the procurement of their goods and services from black
suppliers. What one, however, needs to understand is that the previously disadvantaged
people need to be empowered throughout all the sectors of the industry. The industry does not
consist of supply chains only. Empowerment is about getting these people into the driving
seats, managing businesses like the mines, banks, agriculture, IT industries and so on.
44
After the new South African government under the leadership of the African National
Congress took over the country, they implemented the EE act of 1998. Mathur-Helm (2005:
68) states that this act was a strategy by the new government to create an equitable
representation of all previously disadvantaged groups in all occupational categories, including
the public and the private sectors. It is, nevertheless, a challenge for this group of people to be
represented as anticipated by the Act.
2.14 SOME OF THE BROAD-BASED BLACK ECONOMIC EMPOWERMENT
DEALS AND AGREEMENTS SIGNED IN SOUTH AFRICA
A report in the Sunday Times (2007: 57) announced that BEE transactions with a total value
of R225-billion had been concluded since 1994. This sounds like a huge amount, but when
one considers the size of the population in South Africa and the period over which these
transactions were concluded, which is over 12 years, it is very insignificant to say the least. A
research organization, BusinessMap Foundation (Sunday Times, 2007: 39), has estimated that
173 empowerment deals, worth R75-billion, were concluded in 2006 alone. Only a select few
hundred people have benefited from these deals, as the survey conducted by the SA Institute
of Race Relations (SAIRR) found that 20.5 million people (out of a total population of over
47 million) in South Africa still live on less than R3000 a year.
The deals that were signed, most of them recently, are listed below:
 De Beers announced that it had signed a BEE deal with Ponahalo Investment
Holdings, a BEE company which is co-owned by Manne Dipico, the former Northern
Cape Premier, Cheryl Carolus, who is the former South African High Commissioner
to the United Kingdom and Moss Mashishi, the former CEO of the World Summit on
Sustainable Development 2002 (De Beers, 2005). The deal is a 26% equity stake to
the total value of approximately R3.8 billion. All three of these beneficiaries are
notable ANC stalwarts and that begs the question whether one needs to belong to
certain organizations or political parties in order to qualify for BBBEE deals.
 Sasol announced that it had signed BEE deals which would, according to calculations
by the Democratic Alliance, increase stakes of some of the shareholders as follows:
Khaya Ngqula would be up by R172-million, Penuell Maduna by R268-million and
Phuthuma Nhleko by R172-million (Mail & Guardian, 2005: 21). All of these
gentlemen are notable figures in South African politics. What is important here is,
nevertheless, how these beneficiaries contribute to the economic development of those
45
at the grassroots level. These people also need to graduate out of the system at some or
other stage in order to give way to the others who are still waiting in the queue. For
that to happen effectively there must be a regulating system in place.
 The CEO of Kumba Resources, Con Fauconnier, announced that South African
mining giants Anglo American and Kumba Resources had signed a major BEE deal,
establishing the country's largest wholly black-owned, controlled and managed
company, valued at some R16-billion. The new company, which was initially called
Newco but later renamed Exxaro, is 55% owned by an empowerment consortium led
by BEE coal miner Eyesizwe. The South African Women in Mining Association is
said to have a 17.8% effective and fully funded interest (Anglo American plc Press
Release, 2005).
 Growthpoint Properties, the largest listed property entity, announced a R1-billion deal
with key beneficiaries named as Maduna (again), the former director of public
prosecutions, Bulelani Ngcuka, along with the former Anglo American domestic boss
Lazarus Zim. Ngcuka holds a solid stake in Amabubesi, from which he benefited by
around R338-million. Growthpoint (Press release, 2006) made it clear that in
structuring BEE transactions, it developed a set of objectives to ensure that the BEE
entity includes influential role players who can add value to Growthpoint and its
linked unit holders. Statements such as these are a real threat to those who are not
influential as they are in the true sense of the word excluded from benefiting from any
BEE deals with these companies. This is tantamount to discriminating on the grounds
of economic status.
 Sun International sold a 7% stake in the company to Dinokana, 28% owned by Valli
Moosa, the former minister of Environment and Tourism and still a member of the
ANC’s National Executive Committee. Popo Molefe, former Premier of the North
West province and also a member of the ANC’s National Executive Committee, in his
turn also benefited through Lereko Investments (Mail & Guardian, 2005: 19).
 Phatsima Aviation, which bought 20% of Aerosud from the Industrial Development
Corporation, had beneficiaries such as Ronnie Mamoepa, foreign affairs spokesperson,
Titus Mafolo, an advisor to former President Thabo Mbeki, and Hlengiwe Mkhize,
South African ambassador to the Netherlands (The Star, 2005: 11).
46
 Nick Segal, director of the University of Cape Town’s Graduate School of Business
(GSB), announced that The Black Management Forum (BMF) and the GSB had
signed an agreement in a new BEE project (UCT GSB, 2003).
It is important that agreements of this nature allow the organizations to contribute more
effectively to the transformation of South Africa. Joint ventures should be established that
will play research, teaching and advisory roles in the empowerment and transformation of the
previously disadvantaged South Africans.
47
CHAPTER 3
RESEARCH METHODOLOGY
3.1
INTRODUCTION
This research has been conducted in Namibia, but was also partly done in South Africa with
the aim of benchmarking. Namibia and South Africa share a similar political and economic
history. Nevertheless, although Namibia gained independence and freedom four years before
South Africa gained its freedom, the latter seems to be doing well compared to Namibia. For
this reason South Africa was chosen to be used as a yardstick to gauge the progress Namibia
has made with regard to BEE since independence. For the purpose of the present study, both
qualitative and quantitative methods were used in analysis of the results. Since Namibia does
not have a BEE policy, data were obtained from statements and comments made by business
leaders, trade unionists and politicians and were further studied for analysis.
3.2
DATA COLLECTION METHOD
Both in Namibia and South Africa surveys were done in the form of questionnaires on a broad
spectrum of businesses including companies that have benefited from BEE, SOEs,
government institutions and SMEs. Draft questionnaires are attached as Appendices C, D, E,
F and G.
In addition to the generated data, secondary data such as reports, statements and comments by
politicians, academics, trade union officials and economists, have also been used as tools to
explore the meaning of BEE in the Namibian context, as well as its impact on Namibian
society.
3.3
SAMPLE
In Namibia, informal discussions with both individuals and business people were also
conducted. A few selected individuals were also interviewed either face-to-face or by means
of questionnaires. All of these individuals were non-business people comprising the following
groups: people who were unemployed, those who were employed but found it very difficult to
get promoted to higher positions and those who intended to start their own businesses but
could not succeed, due to lack of finances. Although the sample target was to interview
twenty-five (25) individuals from each group, it was not possible due to the poor responses.
Only five individuals from each group responded within the period specified. These people
were selected in order to establish how non-business people and those at the grassroots level
48
felt about BEE. There is no doubt that these groups of individuals represent the majority of
Namibia’s population.
Policy documents on BBBEE in South Africa were studied and interviews, by means of
questionnaires, were conducted with a representative sample of government officials and
other individuals. As was the case in Namibia, all of these individuals were non-business
people who were selected from the following groups: people who were unemployed, those
who were employed but found it very difficult to get promoted to higher positions and those
who intended to start their own businesses but could not succeed, due to lack of finances. The
sample differed from Namibia in the sense that in South Africa only three individuals were
selected from each group of people. Information was gathered from secondary data on a broad
spectrum of companies and also from individuals who have benefited from BEE.
A sample of forty people where interviewed both in Namibia and in South Africa, which
means a total of eighty people were selected and interviewed. Although one might argue that
the sample size is not representative of the total population of the two countries, it includes a
diverse range of individuals across all races, religions, ethnic groups and ages.
3.4
DATA COLLECTION
Face to face interviews were conducted with some of the selected individuals. Some
individuals were interviewed through the use of survey questionnaires. All the businesses
which were surveyed were interviewed by using the questionnaires. The questions in the
questionnaires were close-ended and they were structured. All the businesses within the same
industry were asked exactly the same questions.
Surveys were carried out on the following businesses, institutions and individuals:
3.4.1
State-Owned Enterprises
 Namibia Ports Authority (NamPort).
 Namibia Water Corporation (NamWater).
 Namibia Power Corporation (NamPower).
 Namibia Development Corporation (NDC).
 Motor Vehicle Accident Fund (MVA Fund).
 Namibia Chamber of Commerce and Industry (NCCI).
49
 Telecom Namibia.
3.4.2
Mining Industry
 Chamber of Mines of Namibia
 Namdeb Diamond Corporation.
 Skorpion Zinc Mine.
 Rossing Uranium Mine.
 De Beers Marine Namibia.
 Rosh Pinah Zinc Mine (Exxaro).
3.4.3
Financial Institutions (excluding banks)
 Allan Grey Namibia.
 Government Institutions Pension Fund (GIPF).
 Sanlam Namibia.
 Old Mutual Namibia.
 Metropolitan Namibia.
 Nammic Holding.
3.4.4
Banks
 First National Bank of Namibia.
 Standard Bank Namibia.
 Bank of Namibia (Central Bank).
 Bank Windhoek.
 Development Bank of Namibia.
3.4.5
Municipalities
 City of Windhoek.
 Municipality of Swakopmund.
 Municipality of Walvis Bay.
50
3.4.6
Government Institutions
 Office of the Employment Equity Commissioner.
3.4.7
Fishing Industry
 Hangana Seafood.
 Benguella Sea Products.
 Cadilu Fishing (Pty) Ltd.
 Marco Fishing (Pty) Ltd.
 Namibia Marine Products (Pty) Ltd.
 Namibia Marine Resources (Pty) Ltd.
 Nautilus Fishing Industries (Pty) Ltd.
 Erongo Marine Enterprises.
 Agatha Bay Fishing.
 Neoplan Fishing & Marine Products (Pty) Ltd.
 NovaNam Ltd.
3.4.8
Small and Medium Enterprises
 Namibia Networking Technologies.
 Walvis Bay Export Processing Zone Management Company.
 Diina’s Soap and Chemicals.
 Oranjemund Boilermakers.
3.4.9
Academic Institutions
 University of Namibia (Unam).
 Polytechnic of Namibia (Polytech).
 International University of Management (IUM).
 Namibia Institute for Mining and Technology (NIMT).
 Windhoek Vocational Training Center (WVTC).
 Okakarara Vocational Training Center (OVTC).
51
 Windhoek College of Education (WCE).
3.4.10 Public Interviewed
A few individuals from the public in Windhoek in Namibia were interviewed as per the
attached questionnaire (APPENDIX D). The individuals were selected across different races,
religions and political and social status. The results obtained are analyzed in the next chapter.
3.4.11 South Africa
 De Beers Group South Africa.
 City Power of Johannesburg.
 Transhex.
 Old Mutual SA.
 Eskom.
 Sasol.
 TransNet.
 Toyota SA.
 Sanlam SA.
52
CHAPTER 4
RESULTS AND ANALYSIS
4.1
METHOD OF ANALYSIS
Data from different sectors were compared and also measured against targets set by different
sectors or industries in their sectoral charters. Data from different industries in Namibia were
also compared to similar industries in South Africa. In order to determine whether there has
been any progress in terms of BEE since Namibia’s independence eighteen years ago, the
results obtained during this study were compared to the figures that were available at the time
of independence.
4.2
STATE-OWNED ENTERPRISES
Table 4.1: State-owned enterprises
Company
Company
% Black
BEE
board
Policy
members
% Black
Comply
female
with
board
EE/AA
members
act?
%
Black
senior
management
%
Black
Comply
Comply with
%
female
with
skills
procured
senior
succession
development
from BEE
management
planning?
act?
suppliers
NamPort
0
80
20
100
67
0
100
100
Do buy
NamWater
0
86
14
100
75
0
100
100
Do buy
NamPower
100
86
29
100
67
22
100
100
Do buy
MVA Fund
0
100
60
100
100
33
100
100
Do buy
NDC
0
100
0
100
38
43
100
100
Do buy
NCCI
0
67
33
100
100
80
100
100
Do buy
100
100
20
100
69
15
100
100
Do buy
29
88
25
100
74
28
100
100
Telecom
Namibia
Average
Out of the seven companies surveyed, less than 30% indicated that they have implemented
their own BEE policies. One would have expected from all of these companies to have
implemented company-specific BEE policies, as most, if not all, of them are 100%
government owned. Notwithstanding their BEE policies, those of them that have implemented
company-specific policies also show a very poor representation with regard to black female
board members.
53
It can also be noted that the SOEs are poorly represented in terms of black female senior
management members. However, black senior management, in general, is well represented
with an average of over 70%.
All the companies have indicated that they comply with EE and AA acts, the skills
development act and succession planning. This is not surprising, as no company will admit
that they do not comply with the above.
In terms of procurement from the BEE suppliers not enough information could be obtained, as
the companies are very reluctant to supply any financial information. They have, nevertheless,
indicated that they buy from BEE suppliers.
4.3
MINING INDUSTRY
Table 4.2: Mining companies
Compan
Company
y
BEE
Policy
% Black
board
member
s
% Black
female
board
member
s
Compl
%
y with
senior
Black
EE/AA
managemen
act?
t?
%
Black
Comply
female
with
senior
successio
manageme
n
nt
planning?
%
Comply
procure
with
d
skills
from
developme
BEE
nt act?
supplier
s
Chamber
Do buy
of Mines
0
50
0
100
50
0
100
100
Namdeb
0
56
19
100
36
9
100
100
Do buy
0
0
0
100
0
0
100
100
Do buy
0
67
13
100
23
0
100
100
Do buy
0
0
0
100
80
0
100
100
Do buy
0
56
19
100
40
0
100
100
Do buy
0
38
9
100
38
2
100
100
Skorpion
Zinc
Rosh
Pinah Zinc
Rossing
De
Beers
Marine
Namibia
Average
None of the mining companies in Namibia has its own BEE policy. On average 38% of the
board members are black. From the results it is clear that the mining industry is owned and
managed by those who were previously advantaged. At both boards of directors and senior
management levels black people are poorly represented with only 38%. The study has also
54
found that females in general and black females in particular are hard to find in this industry.
Board members and senior management members are the people who are responsible for
making strategic decisions in the companies and one could say that excluding Namibians at
these levels means that their interests are not well represented.
As one would have expected, all the companies indicated that they comply with EE and AA
acts, the skills development act and succession planning. When one looks at their survey
results, and also at the responses one gets from talking to those who work in the industry, one
realizes that they hardly comply with the above acts.
The mining industry is the only known industry in Namibia, next to the government, that has
implemented a preferential procurement policy. Although the mines claim to be adhering to
this policy by buying from BEE suppliers, they are still, nevertheless, reluctant to substantiate
their claims quantitatively.
4.4
FINANCIAL INSTITUTIONS (EXCLUDING BANKS)
Table 4.3: Financial institutions
Company
Old Mutual
Namibia
GIPF
Sanlam
Namibia
Metropolitan
Namibia
Nammic
Holding
Allan
Gray
Namibia
Average
Company
% Black
BEE
board
Policy
members
% Black
Comply
female
with
board
EE/AA
members
act?
% Black
senior
management?
% Black
Comply
Comply with
%
female
with
skills
procured
senior
succession
development
from BEE
management
planning?
act?
suppliers
0
67
17
100
33
11
100
100
Do buy
0
89
33
100
71
29
100
100
Do buy
0
18
0
100
33
0
100
100
Do buy
0
28
14
100
41
0
100
100
Do buy
0
100
0
100
100
0
100
100
Do buy
0
17
0
100
100
0
100
100
Do buy
0
53
11
100
63
7
100
100
Most of the financial institutions in Namibia are international and privately owned. They are
headquartered either overseas or in South Africa and have to represent and protect their own
interest, even if they operate in a different country. None of these companies have indicated
55
that they have -company-specific BEE policies, but they do, however, claim that they fully
comply with the AA and EE acts, succession planning and the skills development act.
It is clear from the survey carried out that in the years since independence black
representation at board level has increased significantly to above 50% and the same can be
said about the senior management level which stands at 63%. However, female representation
at both the abovementioned levels is very disappointing with 11% and 7% respectively.
About 66% of the companies, including those that are owned and managed by black
Namibians, do not have a single black female at senior management level. Some companies
say that this sorry state of representation is due to lack of properly qualified black females in
the financial or accounting field. What is noticeable is the fact that female representation in
general is also very poor at the board and senior management levels.
4.5
MUNICIPALITIES
Table 4.4: Municipalities
Company
City
of
Winhoek
Swakopmund
Municipality
Walvis
Bay
Municipality
Average
Company
% Black
BEE
board
Policy
members
% Black
Comply
female
with
board
EE/AA
members
act?
% Black
senior
management?
% Black
Comply
Comply with
%
female
with
skills
procured
senior
succession
development
from BEE
management
planning?
act?
suppliers
0
80
33
100
56
22
100
100
Do buy
0
90
30
100
50
0
100
100
Do buy
0
90
40
100
56
0
100
100
Do buy
0
87
34
100
54
7
100
100
As opposed to private and state-owned companies, these institutions do not have boards of
directors. The councillors and management committees replace the boards of directors. The
management committees are represented by more than 80% of previously disadvantaged
people. These are political appointments and the ruling party will have the highest number of
members in the committee. In this case most of the municipalities are managed by SWAPO
members, which is the ruling party in Namibia.
Municipalities have been in existence since before Namibia’s independence, hence the strong
presence of previously advantaged people within the ranks of senior management as they have
56
been there all along. They cannot be replaced by the push of a button, but what has happened
during the past seventeen years is that in most cases when a previously advantaged person
retires or resigns, that position is filled by a suitably qualified black person.
Although all the municipalities indicated that they adhere to EE and AA acts, there is a
notably poor representation of black females at board of directors and senior management
levels in these institutions, namely 34% and 7% respectively. Two-thirds of the municipalities
surveyed do not have a single black female senior management member. This makes one
wonder what would have happened if the councillors or the management committees had
consisted predominantly of previously advantaged members. These types of results also beg
the question whether it is still acceptable in Namibia to marginalize black people, especially
black females in this case, after more than seventeen years of independence.
4.6
BANKS
Table 4.5: Banks
Company
FNB
Namibia
Company
% Black
BEE
board
Policy
members
% Black
Comply
female
with
board
EE/AA
members
act?
%
Black
senior
management?
%
Comply
Comply with
%
female
Black
with
skills
procured
senior
succession
development
from BEE
management
planning?
act?
suppliers
0
50
10
100
43
0
100
100
Do buy
0
44
11
100
43
14
100
100
Do buy
0
33
11
100
0
0
100
100
Do buy
0
43
14
100
75
0
100
100
Do buy
0
71
43
100
75
14
100
100
Do buy
0
48
18
100
47
6
100
100
Standard
Bank
Namibia
Bank
Windhoek
Bank
of
Namibia
Development
Bank
of
Namibia
Average
Although most of Namibia’s big banks are headed by black male managing directors,
representation on the board and senior management level by black Namibians is just over
45%. These institutions are traditionally known as being dominated by white males. The
57
invalid excuse that is being used by those managing the banks is that there are not enough
well qualified and experienced black Namibians to take over the directorship and
management of the institutions.
Representation by black female Namibians at the board and senior management levels are
18% and 6% respectively. When one looks at the current levels of representation by
previously disadvantaged Namibians, it is hard to believe that these same organizations are
claiming that they comply with EE and AA acts, succession planning and skills development
acts of Namibia. The idea of these acts is that the previously disadvantaged Namibians
become skilled and, when competent, are appointed or promoted into these positions. This
seems not to be happening in these institutions. Again, the companies are reluctant in
divulging any information on their procurement from BEE suppliers and one can only
conclude that, if they ever procure from these suppliers, the percentages are very marginal.
4.7
OFFICE OF THE EMPLOYMENT EQUITY COMMISSIONER
According to the Affirmative Action Act of 1998 (AA Act 29: 1998), all employers with more
than 25 employees are defined as relevant employers and they are required to comply with the
AA act of Namibia. Such employers are required to submit annual reports to the EEC. If
employers fail to comply with the provisions in the act, they can be fined from N$4000 to,
and not exceeding, N$100 000 or be imprisoned for a period ranging from 12 months to, and
not exceeding, five years.
According to the EE commissioner’s report of 2004/5 (2006: 3) the previously disadvantaged
Namibians (Blacks) accounted for only 31% of board of directors positions and 44% of senior
manager positions, while the previously advantaged Namibians (Whites) dominated both the
board of directors and senior manager positions, as they accounted for 48% and 45% of
executive director and manager positions respectively in 2004/5. Women accounted for a
mere 13% of positions at the board of directors levels and for 25% of positions at the senior
management levels. The EEC’s report does not separate black women representation from
total women representation. White males dominated at senior management level and even
increased their relative share since 2000.
The EE commissioner has stated that by June 2006, the number of violators that had failed to
comply with the AAA act and had not submitted the required reports to the EEC stood at 200
companies. In order to prosecute these so-called culprits, the EEC recruited two police
58
officers in 2006. They will help in investigating companies that fail to comply with the act
and compile charges for prosecution.
Although one can notice that there is an upward trend, the representation of designated groups
in the higher echelons of the workforce profile is far from being perfect.
4.8
FISHING INDUSTRY
Table 4.6: Fishing industry
Company
Benguella Sea
Company
% Black
BEE
board
Policy
members
% Black
Comply
female
with
% Black senior
board
EE/AA
management?
members
act?
% Black
Comply with
female senior
succession
management
planning?
Comply with
skills
development
act?
% procured
from BEE
suppliers
0
45
0
100
67
8
100
100
Do buy
0
56
0
100
0
0
100
100
Do buy
0
48
12
100
66
15
100
100
Do buy
0
55
10
100
35
0
100
100
Do buy
0
70
27
100
45
7
100
100
Do buy
0
77
0
100
78
0
100
100
Do buy
0
59
18
100
47
0
100
100
Do buy
0
34
20
100
33
20
100
100
Do buy
0
25
7
100
38
0
100
100
Do buy
0
59
15
100
45
0
100
100
Do buy
NovaNam Ltd
0
60
9
100
37
12
100
100
Do buy
Average
0
53
11
100
45
6
100
100
Products
Cadilu Fishing
(Pty) Ltd
Marco Fishing
(Pty) Ltd
Namibia
Marine
Products (Pty)
Ltd
Namibia
Marine
Resources
(Pty) Ltd
Nautilus
Fishing
Industries
(Pty) Ltd
Erongo Marine
Enterprises
Agatha
Bay
Fishing
Hangana
Seafood (Pty)
Ltd
Neoplan
Fishing
&
Marine
Products
(PTY) Ltd
The fishing industry is the second largest contributor to the GDP of Namibia, after the mining
industry, with between 23% and 25%. Compared to the mining industry it has transformed
significantly at the board and senior management levels with 53% and 45% representation
59
respectively. These percentages are, however, not indicative of the current situation as most of
the people interviewed indicated that transformation is very slow.
The survey has also established that most of the fishing companies are headed by white board
chairpersons and white managing directors. Black females are poorly represented within both
the board and senior management levels due to the fact that the industry is regarded as being
one of the male industries.
What one notices in contrast, however, is that at operational levels, such as processing,
between 70% and 80% of the employees are black females. One can conclude that there is a
belief that black females are only good at working as operators and not as decision makers. Of
the companies surveyed, 27% and 54% do not have a single female member at either the
board of directors or senior management levels. This report indicated earlier that the fishing
industry is doing well when it comes to empowering black people, but the survey results paint
a totally different picture. From this one can see that the authorities do provide fishing quotas
to the previously disadvantaged, but that the rights end up, in some or other way, in the hands
of those that the quotas were not originally intended for.
The above situation needs intervention from the government. The situation also needs to be
monitored thoroughly. After the allocation of quotas, the new holders need to be assisted in
getting finances and they also need to be helped in terms of skills development so that they
can be able to manage their businesses.
60
4.9
SMALL AND MEDIUM ENTERPRISES
Table 4.7: Small and medium enterprises
Company
Company
% Black
BEE
board
Policy
members
% Black
Comply
female
with
board
EE/AA
members
act?
% Black
senior
management?
% Black
Comply
Comply with
female
with
skills
senior
succession
development
management
planning?
act?
%
procured
from
BEE
suppliers
Namibia
Networking
0
100
0
0
100
0
0
100
Do buy
0
57
0
100
0
0
0
0
Do buy
0
100
100
100
100
100
0
0
Do buy
0
100
0
100
100
0
0
0
Do buy
0
89
25
75
75
25
0
25
Technologies
Walvis
Bay
Export
Processing
Zone
Management
Company
Diina's Soap &
Chemicals
Oranjemund
Boilersmakers
Average
SME companies in general, and the companies that were surveyed in particular, are so small
that they don’t have boards of directors. They normally have one owner, who is the manager
or the managing director of the company. They also hardly have more than two senior
management members.
Of the companies surveyed over 75% are either black owned or black managed. These
companies do not procure from BEE suppliers, due to, as they explained, black suppliers
generally being more expensive compared to their white counterparts. If not expensive, they
are normally out of stock and their lead times are very long. These claims could not be
substantiated with any tangible proof.
Half of the companies are owned by black males and the other half by black females. Claims
are made that, should they get access to finances and expand, these companies will definitely
employ more people and employ more male and female managers respectively. What has
transpired, also, is that if the company is owned by a white person the whole senior
management is white, and vice versa.
61
4.10 ACADEMIC INSTITUTIONS
Table 4.8: Academic institutions
Company
University of
Namibia
Polytechnic
of Namibia
Company
% Black
BEE
board
Policy
members
% Black
Comply
female
with
board
EE/AA
members
act?
% Black
senior
management?
% Black
Comply
Comply with
female
with
skills
senior
succession
development
management
planning?
act?
%
procured
from
BEE
suppliers
0
100
0
100
86
14
100
100
Do buy
0
60
0
100
33
0
100
100
Do buy
0
87
6
100
87
6
100
100
Do buy
0
100
30
100
100
50
100
100
Do buy
0
75
0
100
100
0
100
100
Do buy
0
75
0
100
100
0
100
100
Do buy
0
75
0
100
66
0
100
100
Do buy
0
82
5
100
82
10
100
100
International
University of
Management
Windhoek
College
of
Education
Windhoek
Vocational
Training
Center
Okakarara
Vocational
Training
Center
Namibia
Institute
Mining
of
and
Technology
Average
Namibia’s education system has transformed drastically since independence. The senior
management and the councils of the institutions are fully (above 80%) controlled by
previously disadvantaged Namibians. Generally, it is popularly believed that education is the
key to economic emancipation and for this reason Namibians felt that if they took over the
education system fully (in terms of management) they would be economically strong in years
to come. It is, however, disappointing to see that 57% of the institutions do not have a single
black female senior management member and over 70% do not have a black female board or
council member. It just shows that, although the authorities were preoccupied with
transforming the management, it never crossed their minds that black females are also
marginalized and that they needed emancipation.
62
Despite the fact that the education system in Namibia has been taken over and is managed by
the previously disadvantaged Namibians, the education system is in a state of deterioration.
What one notices is the fact that there is a very high number of Grade 10 (previously Standard
8) dropouts roaming the streets without any employment. The Namibian government is,
however, in the process of changing to yet another education system. One would have liked to
see that the management structure of the Education Ministry be changed; also as this situation
has much to do with the way the system is managed rather than with the system itself.
4.11 RESULTS FROM THE INTERVIEWS
4.11.1 Namibia
Table 4.9: Interview results from Namibia
Yes
No
Have you heard of Black Economic Empowerment before?
100%
0%
Do you understand what BEE is?
63%
37%
Do you own a business?
13%
87%
Have you or your company benefited in any way from BEE?
0%
100%
Do you think companies are honest about complying with BEE/AA/EE?
15%
85%
Do you think Namibia did a good thing by introducing BEE?
85%
15%
20%
80%
Threat
Opportunity
70%
30%
Dou you think Namibia is doing well in terms of implementing BEE, Affirmative
Action and Employment Equity so far?
Do you think BEE is an opportunity or a threat?
Business
Public
Government
12%
0%
88%
Blacks
Whites
Poor
Rich
27%
0%
0%
73%
If you think Namibia is not doing well in terms of implementing BEE, who is to blame
for the failure?
Who, do you think, benefits from BEE?
63
4.11.2 South Africa
Table 4.10: Interview results from South Africa
Yes
No
Have you heard of Broad Based Black Economic Empowerment before?
100%
0%
Do you understand what BBBEE is?
70%
30%
Do you own a business?
0%
100%
Have you or your company benefited in any way from BBBEE?
0%
100%
Do you think companies are honest about complying with BBBEE/AA/EE?
50%
50%
Do you think South Africa did a good thing by introducing BBBEE?
60%
40%
17%
83%
Threat
Opportunity
35%
65%
Dou you think South Africa is doing well in terms of implementing BBBEE,
Affirmative Action and Employment Equity so far?
Do you think BBBEE is an opportunity or a threat?
Business
Public
Government
35%
0%
65%
Blacks
Whites
Poor
Rich
42%
0%
0%
58%
If you think South Africa is not doing well in terms of implementing BBBEE, who is to
blame for the failure?
Who, do you think, benefits from BBBEE?
A sample of forty people where interviewed both in Namibia and in South Africa as per the
attached appendices (APPENDICES D & E), which means a total of eighty people were
selected and interviewed. The samples included a diverse range of individuals across all races,
religions, ethnic groups and ages.
A very simple process was used to analyse the results. The “yes” and “no” answers were
compared, as the idea of the questionnaire was to see whether the people interviewed agreed
or disagreed with certain issues in question. Another way of analysing the questions was by
comparing the different responses between the two countries. This was done mainly to get a
feeling of what the general feeling about BEE and BBBEE is in Namibia and South Africa
respectively.
When one looks at the interviews conducted, it is clear from the results that BEE is the talk of
the nation, both in Namibia and in South Africa. However, it can be concluded that one third
64
of the people in both countries do not understand what exactly BEE or BBBEE is. The 37% of
the people who do not understand BEE are not the under-aged or those who are still at
primary and/or secondary schools. These are the people who are economically active, people
who need to know and understand what is going on in the country so that they can positively
contribute to the economic development. These are the very same groups of people who need
to be empowered.
Most of the people interviewed do not own businesses and indicated that they never benefited
from any BEE deals as individuals. These people believe that in order to benefit from BEE
one needs to own a business and it is not easy to start one. They believe that they will never
benefit from BEE or BBBEE as long as they don’t own businesses, since those looking for
BEE partners clearly state that they also need to benefit financially from the agreement.
Namibians believe that BEE is a threat to those who do-not-have, as they feel more and more
marginalized, although at the same time they feel that it is a good thing that the government
came up with. In contrast, South Africans believe that it is an opportunity and they embrace it
fully.
It is a general feeling that BEE/BBBEE only benefits the rich, irrespective of colour or race.
65
4.12 SOUTH AFRICAN COMPANIES
Table 4.11: South African companies
Company
Transhex
Company
% Black
BEE
board
Policy
members
% Black
Comply
female
with
board
EE/AA
members
act?
%
Black
senior
management?
%
Black
Comply
Comply with
female
with
skills
senior
succession
development
management
planning?
act?
%
procured
from
BEE
suppliers
0
22
0
100
43
14
100
100
Do buy
100
17
0
100
50
8
100
100
Do buy
100
62
38
100
70
10
100
100
Do buy
Sanlam SA
0
50
25
100
22
0
100
100
Do buy
Eskom
0
73
20
100
70
20
100
100
Do buy
Sasol
0
36
18
100
75
50
100
100
Do buy
Toyota SA
0
0
0
100
0
0
100
100
Do buy
0
71
43
100
83
13
100
100
Do buy
De Beers
0
19
0
100
27
13
100
100
Do buy
Average
22
39
16
100
49
14
100
100
Old
Mutual
SA
Transnet
City
Power
Johannesburg
All the South African industries have their own BEE charters, which they claim to be
adhering to, although very few individual companies have their own policies or charters.
Although South Africa seems to be doing well, from the companies selected, representation at
the board level by black people is only 39%. Black female representation at the board level is
only 16%. This sample is not representative of the total industries in South Africa and it
would be unfair to draw conclusions from it. However, it is a very poor reflection on the
progress of BBBEE at the highest level of corporate governance in the organizations thirteen
years after the country gained its freedom. This is happening despite the fact that all these
industries have their BEE charters, some of them at least at the draft level, if not implemented
fully.
Black senior management is represented fairly well, compared to the board of directors, with
an average of 49%, which is an indication that there is, at least, progress. Although one
company indicated a 50% female presence at senior management level, the average is still
66
very poor as some organizations do not have a single black female member within their senior
management structure.
Even in South Africa companies are reluctant to talk about their procurement from BEE
suppliers. One can, of course, not comment on their procurement without any information, but
it makes a person wonder if there is really any significant contribution towards BEE
procurement. There is a Preferential Procurement Policy Framework Act, Act No. 5 of 2000,
which works on a point system. According to this act, persons, or categories of persons,
which were unfairly disadvantaged by unfair discrimination on the basis of race, gender or
disability should get preferential treatment (2000: 3). About seven years after this act was
promulgated, not much seems to be happening in South Africa in this regard.
4.13 COMBINED AVERAGE IN NAMIBIA
Table 4.12: Combined average in Namibia
Company
SOEs
Mining
Institutions
Banks
Financial
Institutions
Municipalities
Fishing
Companies
Small
Medium
Company
% Black
BEE
board
Policy
members
% Black
Comply
female
with
board
EE/AA
members
act?
%
Black
senior
management?
%
Black
Comply
Comply with
female
with
skills
senior
succession
development
management
planning?
act?
%
procured
from
BEE
suppliers
29
88
25
100
74
28
100
100
Do buy
0
38
9
100
38
2
100
100
Do buy
0
48
18
100
47
6
100
100
Do buy
0
53
11
100
63
7
100
100
Do buy
0
87
34
100
54
7
100
100
Do buy
0
53
11
100
45
6
100
100
Do buy
0
89
25
75
75
25
0
25
Do buy
0
82
5
100
82
10
100
100
Do buy
4
67
17
97
60
11
88
91
&
Enterprises
Academic
Institutions
Average
From the survey it has transpired that only the SOEs have their own BEE policies, although it
is just a disappointing 29%. Although recommended by the government, it is not a
67
requirement, and one can only sing the praises of those that have put in some effort to draft
and implement their company-specific BEE policies, since the Namibian government, who is
supposed to be a custodian of this policy, does not have one. The financial sector is,
nevertheless, in the process of finalizing its industry BEE charter.
The average of black board membership and senior management has risen to 65% and 60%
respectively since 2004/5 (31% and 44% respectively). These figures are, however, inflated
by the SOEs, municipalities and the universities as shown in the attached table. All these
institutions are owned by the government and it is obvious that they will be managed by black
Namibians. If one takes away these institutions, the figures drop to 52% and 54%
respectively. Although the pace of transformation is noticeably slow, one should appreciate
the fact that, despite the absence of any BEE policy, there is an upward trend.
Female representation in both management structures is very low with 17% and 11% at the
board and senior management levels respectively. This poor representation is noticeable in all
the government institutions, although the percentages have risen since 2004/5 (Uusiku, 2006).
Although the Namibian government instructed all the ministries to ensure that all the
institutions which fall under them develop and implement their own BEE charters, in
approximately 93% of the companies evaluated, no formal policies and/or programmes
existed to proactively deal with BEE. One can notice that very few companies are
demonstrating any effort in the development of comprehensive BEE plans.
68
CHAPTER 5
CONCLUSION
5.1
NAMIBIA
Although there are signs that Namibia is moving towards empowering those who were left
behind, achieving its objectives in terms of BEE is far from being realised. This research has
established that there is no BEE policy in Namibia. The Namibian government set up a
committee, headed by the office of the prime minister, in 2000 to come up with a legislative
framework in terms of drafting and implementing BEE. It has been seven years since the
establishment of this technical committee and nothing has been put on paper yet.
Namibia needs to accelerate towards having its BEE policy in place. Although it is important
that more people should be empowered, the success of black empowerment cannot be
measured by the number or the percentage of black people that are empowered. It should be
measured by the contribution made by these empowered individuals and companies to the
economic development of the country. The contribution can be in the form of employing
qualified black people in senior and executive positions and by getting these people actively
involved in corporate social responsibilities.
As mentioned before, BEE cannot be treated in isolation. Issues such as AA and EE should be
considered, as these are the backbones of implementing BEE in the country. Namibia has its
AA and EE acts (Act No. 29: 1998) in place and these acts/policies should not be treated as
just another paper exercise. They need to be adhered to in letter and spirit. All the companies
in Namibia have submitted their three year AA/EE plans as required by the government and,
although they claim to be guided by these plans which they submitted, the actual results (as
per the surveys done) do not reflect that reality.
The National Planning Commission Secretariat (National Planning Commission Secretariat:
2001) reported in 2001 that Namibia had a Gini-coefficient of 0.67 and that Namibia was one
of the countries with a very high level of income distribution inequalities. The study
established that there was a high number of wealthy people and extreme poverty also existed,
since the richest 10% of society receives 65% of the total income. As stated, these were the
figures in 2001. However, with the current pace of wealth re-distribution and the progress
made so far with regard to BEE, one cannot say with certainty that there is a change in these
figures for the better. What one can say with certainty is that Namibia has a long way to go
69
before its citizens, especially those who were left behind by the previous apartheid system,
can say that they are economically empowered.
People at the grassroots do not see or reap any benefits from the current BEE attempts by
either the government or the private sector. Unless these people are empowered, get involved
in the mainstream economy of the country and see the benefits of BEE, no authority or
institution can claim its success in the empowerment of its people.
Although a few of the companies have implemented their own BEE policies, one can hardly
notice any significant difference in the board and management structures between before and
after the implementation of these policies. What is noticeable both in the public and private
sectors, is that black women are the ones who are highly marginalized. As Mathur-Helm
states (2005: 68), several South African private and multi-national organizations (most of
them also operating in Namibia) claim to have successfully implemented equal opportunities
in their companies’ policies and mainstream businesses, yet they are struggling to transform
and translate them into reality. This is true especially for women, but also for black people in
general.
Claims that are made by some that BEE is reverse discrimination are debatable. The idea of
BEE is not to discriminate against any citizen of the country but to ensure that the people who
were discriminated against are being uplifted and brought at least to the level where the others
(previously advantaged) are. This can, of course, not be done without giving the black people
preferential treatment. There needs to be a delay for those who were previously advantaged,
in order for the previously disadvantaged to reach the same level as the others, so that both
can start and proceed together.
Although there are claims that the fishing industry in Namibia is fairly well developed
(Manning, 2000) when it comes to BEE, this is not entirely the case. It is true that the
Namibian government has allocated concessions/licenses to black Namibians, but
unfortunately these licenses were sold to white foreign companies, either wholly or partly.
This has resulted in black Namibians becoming only silent partners who do not take part in
actual management and decision-making processes of the companies. Those who are still
license holders either lease them out to foreign companies or, if they do not lease them out,
are unable to keep their companies in operation due to lack of finances or proper management
skills or both.
70
It is hard to believe that the Namibian government does not even have a single share in any of
the international companies that started to invest in Namibia after independence. These are
mainly mining companies and mining is the backbone of Namibia’s economy. If it is difficult
for the government of the day to secure shares (by legislation) in investing companies, it will
obviously be harder for individuals to be empowered economically in these institutions.
Financial institutions are generally owned and managed by the previously advantaged. Even
when one looks at companies where black people are in charge as either managing directors,
CEOs or owners, crucial positions such as those of financial managers and financial directors
are occupied by white people in the country. These are the positions that can influence the
economy of the country and can lead to major implications if any complications occur.
Employers hide behind the argument of not finding suitably skilled people among previously
disadvantaged Namibians and in this way they fill these positions with previously advantaged
people. According to the AA commissioner’s report (Usiku: 2007), the AA act requires
employers to train staff from the designated groups and appoint them to positions of
responsibility. Companies need to invest in their human capital by developing the skills levels
of their employees. In this way it won’t be necessary for them to ‘fish around’ for ‘readymade’ affirmative action candidates. When a company appoints a previously advantaged
person for a three to five year term and claims, after the term has expired, that there are no
suitable candidates from the designated groups, it is a clear indication that the company has
failed in the process of succession planning and neglected government’s call of investing in
its human capital.
With regard to the BEE agreements announced and signed so far, it is true that only those who
already have or are well connected benefit from these deals. There is no controlling
mechanism in place for BEE agreements and, as a result, companies choose who they want to
do business with. As long as the government does not come up with some form of controlling
mechanism, this will spiral out of hand. The poor will remain poor and the rich will become
super-rich, resulting in an increased gap between the rich and the poor.
Finally, although government policies and legislation have been created to advance black
people, their success depends on the management strategies that can create a conducive
environment for black people. The corporate culture in private and public institutions needs to
change so as to accept and accommodate black people, in order for them to make a significant
contribution to the economic development of Namibia. Namibia has been independent for
seventeen years, but the country’s business world and the economy is still dominated by white
71
people. This, as Mathur-Helm says (Women in Management Review. Equal Opportunity and
Affirmative Action for South African Women, 2005: 68), is undermining government’s AA
and EE policy. For BEE to succeed, a commitment is needed from all, including the
government, trade unions, business and the people of the country.
5.2
SOUTH AFRICA
Thirteen years into democracy and freedom, South Africa, compared to Namibia, has
achieved a lot, although they are also very far from satisfying the majority of the previously
disadvantaged, especially black women. Most of the companies have their own BBBEE
policies and all the industries have either implemented or drafted their industry BBBEE
charters.
Two years into its independence South Africa started drafting its guidelines, and established
its BBBEE commission in 1998. According to Whiteford (2005: 4), black-controlled
companies on the JSE dropped from 6.3% to 2.9% between 1996 and 2000, despite all the
efforts by the South African government. This drop can be attributed to, first of all, inability
of black people to obtain finances from financial institutions and, then, their fear of taking
financial risks. As is the case in Namibia, black people are given executive positions in
corporations with too little or no operational control. This situation causes an exodus of black
professionals leaving private sectors to either join the public sector, including semi-state
institutions, or open their own businesses, which sometimes do not last long due to lack of
funds or lack of business skills. This situation of being in an executive position with little or
no control is very frustrating and one can only describe it as complying with the regulations in
numbers and not worrying too much about handing over the controlling or the decisionmaking power.
Although there are clear indications that there is BEE, at least for middle class black people,
South Africa still has a long way to go, because the majority of its people are still living in
abject poverty. The government has laid down a good foundation for the rest of the
institutions to build on, but there needs to be strict controls and punitive measures that should
be enforced in cases where there are non-compliances.
The BBBEEE agreements and deals that are announced involve only those who are already
empowered, and one cannot help but wonder what the real purpose of BBBEE is. People
understand what BBBEE is, they acknowledge that it is a good thing that happened in
Southern Africa (including Namibia), they believe that it is an opportunity for them to be
72
involved and take part in the economic development of their countries, but they also believe
that it has been a failure so far (APPENDICES D & E: 2007). According to them, there is
only one institution to blame and that is the government. In a way one tends to agree with this
statement, as the state has all the controlling power, but, again, all the other partners including
the trade unions, businesses and all the people of the country need to work together in order to
make this idea of BBBEE a reality which can be truly embraced by all.
5.3
LESSONS LEARNED
Although some of the people see BEE as synonymous with AA and EE, BEE is broader and it
includes empowerment processes such as job creation, rural development, poverty alleviation,
specific measures to empower black women, skills and management development,
meaningful ownership and access to finance. The main objective of BEE is empowering black
people. It should not be about putting previously disadvantaged people into executive and
senior management positions and giving these people shares in white-owned companies. Of
course, it is good to do that, but it is not the ultimate aim of BEE.
There is a middle class of black people in Namibia and this class is growing at a very fast
pace. The most important thing for Namibia, however, is for it to determine how this middle
class can contribute to the creation of wealth for the majority of Namibians. It is
recommended that future studies and research look into how this fast-growing middle class
could contribute to wealth creation for those who are still left behind.
The example of the scorecard system used by South Africa is a good starting point for guiding
and monitoring BEE and it could also help in determining where exactly the country is in
terms of its progress.
73
CHAPTER 6
RECOMMENDATIONS
Namibia is without a policy on BEE. Hence, it is recommended that the country speeds up the
drafting and implementation of its BEE policy. People sitting on this committee are
permanently employed in other positions within the government, and when it comes to
prioritizing jobs, BEE is not regarded as one of the most important issues. It is recommended
that the government appoint people on the committee either permanently or on a fixed-term
contract basis so that these people can concentrate only on drafting and implementing the
BEE policy. For the government to succeed in driving the BEE process successfully, they
need to work in partnership with the private sector.
Even in the absence of a BEE policy, specific strategies need to be outlined in the existing
documents, such as the NDP 2 & 3 and Vision 2030, on how the empowerment of previously
disadvantaged Namibians can be attained. Targets need to be set for Namibia to achieve
during the 5-year plans of NDP3, which is the latest in Namibia’s development plans. Without
guidelines, targets or indicators stipulated, it will be very difficult to monitor how far the
country is in terms of empowering those who were previously disadvantaged.
Along similar lines with the annual AA report, businesses should submit an annual BEE
report. This will ensure that some efforts are made to address BEE and, as is the case with
AA, most of the companies, if not all, will appoint BEE coordinators in their structures to
drive the process.
Apart from the BEE committee in the Office of the Prime Minister, established in 2000, the
government must establish a governing body or a monitoring organization. This organization
will ensure that the playing fields are leveled and that those who have already benefited
significantly from previous deals are not considered. It should be made a rule that when a
company attains a certain level, it should graduate out of the system in order to give others a
chance to benefit. Businesses that have never benefited before should get preference when
tenders and quotas are awarded.
The Namibian government must create a fund to which all registered companies will be
required to contribute a certain percentage of their income. These funds will be used for skills
development, since skills development and transfer are the most important components of
economic empowerment.
74
Goldberg et al (2005: 194) states that it is imperative for companies to ensure broader
participation of black people in the formal economy in order to achieve sustainable
development, growth and prosperity. If there is no BEE within the industry, there might not
be any business in the next few years to generate any form of bottom line. It is the people at
the bottom of the pyramid who ultimately buy and consume the products and these people
need to be included in the mainstream of the economic development of the country.
Colleen Gwari and Joanna Shikongo (2005: 7) argue that the Namibian government needs to
set up a SME bank in order to assist those new entrepreneurs who are in need of start up
funds. They also add that, through the treasury, the government must have a separate budget
for SME development. This seems to be a good idea, as for a developing economy like
Namibia’s, SME development needs to be placed as a high priority in order to meet the
country’s developmental objectives as set out in Namibia’s NDPs.
75
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Manning, P. (2000). Review of the distributive aspects of Namibia’s Fisheries Policy. NEPRU
Research Report No. 21. NEPRU, Namibia.
Mathur-Helm, B. 2005. Women in Management Review. Equal Opportunity and Affirmative
Action for South African Women: A Benefit or a Barrier? Bradford: Emerald.
Mbendi. 2001. South Africa – Miscellaneous: Black Economic Empowerment. 28 September.
[Online] Available: http://www.mbendi.co.za/indy/misc/blck/af/sa/p0005.htm Accessed: 24
September 2007.
Motinga, D. & Mbuende, T. 2003. Progress on Affirmative Action and Employment Equity:
Still a Man’s World! IPPR Briefing Paper No. 26, November
Motinga, D. & Vigne, P. 2005. Assessing Training Needs Among AALS Farmers: Cash and
Skills Needed to Farm Successfully in Namibia. IPPR Research Paper No. 7, August.
Mwilima, N. 2004. Farmworkers and Land Reform in Namibia. Labour Resource and
Research Institute, March.
Namibia Chamber of Commerce and Industry. 2003. Black Economic Empowerment in
Namibia – The private sector’s position: Windhoek: NCCI
Namibia Economic Policy Research Unit. 1998. Small Business Background Directory
(Draft). Windhoek: NEPRU.
Namibia Economist. 2001. Foreign Direct Investment. 15 March.
Namibia Economist. 2006. Allan Gray brings BEE partners on board. 1 April.
NamPower. 2004. Black Economic Empowerment Policy. Windhoek, 12 May.
Nawatiseb, E. 2005. Black Economic Empowerment in Namibia: Nepotism set to undermine
BEE. The Namibian, 26 January.
Republic of Namibia. 1998. The Namibia Labour Force Survey 1997. Windhoek: Ministry of
Labour.
Republic of Namibia: 2001. National Development Plan 2, Volume 1 and 2. Windhoek:
National Planning Commission Secretariat – 2000 to 2005.
Republic of Namibia. Affirmative Action/Employment Equity Act, no. 29 of 1998
Republic of Namibia. State Owned Enterprises Governance Act, no. 2 of 2006
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Republic of Namibia. Preferential Procurement Policy Framework Act, no. 5 of 2000
Republic of Namibia. Constitution of the Republic of Namibia, Article 16 of 1990
Republic of Namibia. 2007. General Public Interview on Black Economic Empowerment.
Windhoek: Personal Interview, 24 – 28 September.
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2005. Windhoek, Office of the Employment Equity Commissioner.
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2006. Windhoek, Office of the Employment Equity Commissioner.
Republic of Namibia. 2004. Vision 2030. Windhoek: National Planning Commission
Secretariat.
Republic of South Africa. Broad Based Black Economic Empowerment Act, no. 53 of 2003.
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Redistribution. IPPR Research Report No. 10, Windhoek, August.
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http://www.growthpoint.co.za/news_view.asp?ID=364
[Online]
Accessed:
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Available:
September
2007
80
APPENDIX A
F. Ganaseb
P. O. Box 50659
Bachbrecht
Windhoek
25 September 2007
TO WHOM IT MAY CONCERN
I am a final year Master of Business Administration (MBA) degree student at the University
of Stellenbosch Business School in South Africa.
In order to fulfill the requirements for the degree of Master of Business Administration I have
to submit a comprehensive research report. The topic of my research report is ‘An
Investigation On Black Economic Empowerment (BEE) And Its Impact On Development In
Namibia’. The research will mainly be conducted in Namibia but also partly in South Africa
as South Africa will be used as a benchmark in order to measure how Namibia is progressing
with regard to Black Economic Empowerment. This is also to see whether there are any
lessons that can be learned from South Africa.
It is against this background that I would like to ask you to assist me in getting the
information which I need for the completion of this research of which the first draft is due on
the 31st October 2007. The research is not aimed at one specific industry but covers all the
industries in Namibia.
81
Please complete the attached questionnaire at your earliest convenience and e-mail it back to
me. Should you so require, the information you supply will be treated with confidentiality.
Yours sincerely,
FERDINAND GANASEB
E-mail:
14218216@sun.ac.za or fganaseb@mme.gov.na
Contact No:
+264 813362552
82
APPENDIX B
83
APPENDIX C
Questionnaire for Businesses on Black Economic Empowerment
Please supply the following details regarding your company:
A.
Company details
1. Trading name of the company
……………………………………………………...
2. Nature of your business. Please tick.
a. Mining
b. Fishing
c. Financial Services
d. Municipality
e. Banking
f. Construction and/or Building
g. State Owned Enterprise
h. Others
(a) Please specify ………………………………………………………
B.
General questions
1. What is the total number of permanent employees? Please tick.
a. 1 – 49
84
b. 50 – 99
c. 100 – 149
d. 150 – 199
e. 200 and above
2.
(a) Does your company have written BEE policy/charter?
………………………………………………………..
(b) If yes, please supply the date of the policy.
……………………………………………………….
3. What is the total number of board members?
……………………………………………………………
4. What is the total number of black board members?
……………………………………………………………
5. What is the total number of black female board members?
……………………………………………………………..
6. What is the total number of senior management?
…………………………………………………………….
7. What is the total number of black senior management?
……………………………………………………………
8. What is the total number of black female senior management?
……………………………………………………………
9. Does your company have succession planning?
…………………………………………………………..
10. Does your company comply with skills development act?
………………………………………………………….
85
11. What percentage of procurement is from BEE suppliers?
…………………………………………………………
12. Does your company comply with Employment Equity/Affirmative Action Act?
……………………………………………………………..
13. Does your company have a learnership policy/program?
……………………………………………………….
14. What is the percentage of black learners of the total learnership complement?
…..……………………………………………………
15. Is the above information confidential or can it be disclosed to a third party?
…….…………………………………………………
86
APPENDIX D
Questionnaire for Namibian Public on Black Economic Empowerment
1. Have you heard of Black Economic Empowerment before?
………………………………………………………..
2. Do you understand what BEE is?
……………………………………………………….
3. Do you own a business?
……………………………………………………….
4. Have you or your company benefited in any way from BEE?
………………………………………………………..
5. Do you think BEE is an opportunity or a threat?
………………………………………………………
6. Dou you think Namibia is doing well in terms of implementing BEE, Affirmative Action
and Employment Equity so far?
…………………………………………………………..
7. If the above answer is no, who is to blame for the failure?
a. Businesses
b. Public
c. Government
8. Do you think companies are honest about complying with BEE/AA/EE?
…………………………………………………………
87
9. Who, do you think, benefits from BEE?
a. Black people
b. White people
c. Poor people
d. Rich people
10. Do you think Namibia did a good thing by introducing BEE?
…………………………………………………………
88
APPENDIX E
Questionnaire for South African Public on Broad Based Black Economic Empowerment
1. Have you heard of Broad Based Black Economic Empowerment before?
………………………………………………………..
2. Do you understand what BBBEE is?
……………………………………………………….
3. Do you own a business?
……………………………………………………….
4. Have you or your company benefited in any way from BBBEE?
………………………………………………………..
5. Do you think BBBEE is an opportunity or a threat?
………………………………………………………
6. Dou you think South Africa is doing well in terms of implementing BBBEE, Affirmative
Action and Employment Equity so far?
…………………………………………………………..
7. If the above answer is no, who is to blame for the failure?
a. Businesses
b. Public
c. Government
8. Do you think companies are honest about complying with BBBEE/AA/EE?
89
…………………………………………………………
9. Who, do you think, benefits from BBBEE?
a. Black people
b. White people
c. Poor people
d. Rich people
10. Do you think South Africa did a good thing by introducing BBBEE?
…………………………………………………………
90
APPENDIX F
Questionnaire for Academic Institutions on Black Economic Empowerment
Please supply the following details regarding your institution:
A.
Institution details
1. Trading name of the institution
……………………………………………………...
2. Nature of your business.
i. Mining
j. Fishing
k. Financial Services
l. Municipality
m. Banking
n. Construction and/or Building
o. State Owned Enterprise
p. Others
(a) Please specify ………………………………………………………
B.
General questions
1. What is the total number of permanent employees? Please tick.
91
a. 1 – 49
b. 50 – 99
c. 100 – 149
d. 150 – 199
e. 200 and above
2.
(a) Does your institution have written BEE policy/charter?
………………………………………………………..
(b) If yes, please supply the date of the policy.
……………………………………………………….
3. What is the total number of board members?
……………………………………………………………
4. What is the total number of black board members?
……………………………………………………………
5. What is the total number of black female board members?
……………………………………………………………..
6. What is the total number of senior management?
…………………………………………………………….
7. What is the total number of black senior management?
……………………………………………………………
8. What is the total number of black female senior management?
……………………………………………………………
9. Does your institution have succession planning?
…………………………………………………………..
10. Does your institution comply with skills development act?
92
………………………………………………………….
11. What percentage of procurement is from BEE suppliers?
…………………………………………………………
12. Does your institution comply with Employment Equity/Affirmative Action Act?
……………………………………………………………..
13. Does your institution have a learnership (excluding students studying at the institute)
policy/program?
……………………………………………………….
14. What is the percentage of black learners (excluding students studying at the institute) of
the total learnership complement?
…..……………………………………………………
15. Is the above information confidential or can it be disclosed to a third party?
…….…………………………………………………
93
APPENDIX G
Questionnaire for Namibian Government on EE, AA and BEE
Please supply the following details:
A.
GRN official’s details
1. Name of the Ministry
…………………………………………………….
2. Position of the person
…………………………………………………….
B.
General questions
1. Does the Namibian Government have Employment Equity Act?
……………………………………………………………………………………………..
2. Does the Namibian Government have Affirmative Action Act?
………………………………………………………………………………………………
3. What percentage of black board members are there in the private sector?
………………………………………………………………………………………………
4. What percentage of black female board members are there in the private sector?
………………………………………………………………………………………………
5. What percentage of black senior management is there in the private sector?
……………………………………………………………………………………………....
6. What percentage of black female senior management is there in the private sector?
94
………………………………………………………………………………………………
7. What percentage of black board members are there in the state owned enterprises?
………………………………………………………………………………………………
8. What percentage of black female board members are there in the state owned enterprises?
………………………………………………………………………………………………
9. What percentage of black senior management is there in the state owned enterprises?
……………………………………………………………………………………………....
10. What percentage of black female senior management is there in the state owned
enterprises?
………………………………………………………………………………………………
11. What percentage of black senior management is there in the public sector?
……………………………………………………………………………………………....
12. What percentage of black female senior management is there in the public sector?
………………………………………………………………………………………………
13. Does the Namibian Government have a skills development act?
Yes / No
14. Does the Namibian Government have a policy on Black Economic Empowerment?
a. Yes / No
b. If yes, please supply the date when it was implemented……………………….
c. If not, when does the government plan to implement it?
………………………………………………………………………………….
15. If
there
is
no
BEE
policy,
how
does
the
Government
monitor
implementation/application of BEE in Namibia?
………………………………………………………………………………………………
the
95
16. Is the Government aware of any companies who have implemented their own BEE
policies?
a. Yes / No
b. If yes, what is the number of these companies?
………………………………………………………………………………………………
17. Do private companies, in general, adhere to the Government’s call with regard to BEE?
a. Yes / No
18. Are there any punitive measures in place for the companies who do not conform to BEE?
a. Yes / No
b. If yes, what are these punitive measures?
………………………………………………………………………………………………
19. Will Namibia reach a stage where its leaders will say we are happy with what we have
achieved so far, let us stop with the BEE and treat all the citizens equally without giving
any citizen preferential treatment based on the past inequalities?
a. Yes / No
b. If yes, what is the target date for this to happen? ………………………………
20. Is the above information confidential or can it be disclosed to a third party?
………………………………………………………………………………………………