Andrew Kenny – BEE is destroying the economy and hurting the poor

By Andrew Kenny*

There is one simple question that explains why BEE, affirmative action, employment equity, cadre deployment and “transformation” have been such a disastrous failure for everyone – except the political elite. It explains why they have been a catastrophe for poor black people. 

Andrew Kenny

The question is this: “What school do you send your children to?”

BEE and allied policies of racial preferment are destroying the economy and making the poor despair. All the politicians who are promoting them know it perfectly well. They would be horrified if they themselves had to bear the consequences of BEE. They want other people to suffer under it, never themselves. BEE means giving poor black people shoddy goods and services while enriching a tiny black elite. 

BEE or Black Economic Empowerment is one of a group of ANC policies, all destructive, designed to make black skins compulsory requirements for job appointments or business contracts. You are not allowed to appoint people on merit alone (qualifications, experience, record, competence, fitness for the job); you must include race as a criterion. Under BEE, you are required to hand over a large chunk of the value of your company to approved BEE beneficiaries (which means politically important chums and relatives of the ANC) and you are required to give senior jobs to people with black skins and the correct political connections. Government contracts, such as supplying medical equipment to state hospitals or sanitation and water supply to municipalities or coal to Eskom, do not go to those who can supply the best goods and services at the lowest prices but to those who have the correct “BEE scorecard”. If, because of BEE, the hospital equipment is faulty or the sanitation fails or Eskom is forced to buy bad and expensive coal, that doesn’t matter to the ANC. All that matters is that rich black cronies make a lot of money from BEE contracts.

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Warning! If you select a BEE beneficiary who has got the right skin colour but not the right political connections, you could be guilty of the crime of “fronting” and could be severely punished. In parliament, on 7 September 2016, Deputy President Cyril Ramaphosa, serving under President Zuma, warned anybody thinking of investing in South Africa, “If you are found guilty of fronting, your business could face a penalty of up to 10% turnover, as well as 10 years in prison for individuals.” If you appoint as a senior executive in your company somebody absolutely useless but with the right links to the ANC, that is fine. But if you appoint some poor black person who has shown high intelligence, high initiative and has already done well in your company but does not have the right connections with the ruling elite, you could be guilty of fronting. Ten years in prison!

Affirmative Action (AA) makes it compulsory by law to include race as a criterion for making appointments. “Black” people always get preference, and “black” is defined as “African, Coloured and Indian” but the ANC will refuse point blank to define what these racial terms mean. It’s all arbitrary and based on prejudice. AA has various degrees of severity. Sometimes being black just makes it more likely you will be appointed over a white person with the same qualifications and experience; sometimes black people without proper qualifications are appointed over qualified white people; sometimes white people are excluded altogether. Recently Dischem announced that white people will not be considered for its jobs.

Employment Equity (EE) means that all organisations must strive to have the racial ratios of their staff at every level to be the same as the racial ratios of the population at large. 92% of the South African population is black, therefore 92% of teachers at every school in South Africa should be black. The Employment Equity Act of 1998 made this law. This month, President Ramaphosa signed into law the Employment Equity Amendment Act, which made the law here even more onerous – with the blessed exception of companies employing fewer than 50 people. Small companies now have a powerful incentive never to expand their workforce.

Cadre Deployment means that senior appointments must be made on loyalty to the ruling party and on the correct revolutionary credentials rather than merit, experience, qualifications, competence or fitness for the job. Such a policy was prevalent in many communist countries, such as Russia under Stalin and China under Mao.

Transformation means kicking the whites out. You hear advocates of this policy saying in one breath, “Transformation means much more than kicking the whites out”, and in the next breath, “70% of the executives of Company X are white. Therefore it has not been transformed.” 

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Now to the key question. For most people, the most important things in their lives are their children. They regard their children as more important than themselves. And the most important part of their children’s lives is their education. So where do people choose to send their children to school? I must emphasise choose. Poor people in South Africa, which usually means black people, cannot choose; they are forced to send their children to dreadful township schools with black teachers, mostly appointed on affirmative action.

Those who are rich enough choose overwhelmingly to send their children to schools where most of the teachers are white, selected on merit, qualifications, dedication, experience and competence. They would be horrified at the prospect of their children going to a school where 92% of the teachers were black, appointed on affirmative action. I think “overwhelmingly” is an understatement. A more accurate word is “exclusively”. I cannot think of one single example of anybody rich enough to choose, any parliamentarian, black or white, any senior politician in the ANC or the EFF or any other party, who has chosen to send his or her children to a school where 92% of the teachers are black, chosen by affirmative action. Let me give a few examples of the contrary.

Cyril Ramaphosa, now South African President, sent his daughters to Roedean and his sons to St Stithians, two elite private schools with mainly white teachers appointed on merit. Naledi Pandor, while ANC minister of education, sent a son to Bishops and a daughter to Herschel, both elite private schools with mainly white teachers, and two other children to posh Model-C schools with mainly white teachers. Terry Oakley-Smith, who runs “Diversity and Change” courses, and is forever railing against white racism in our education system, sent her son to St John’s College School, another posh private school with white teachers. Julius Malema sends his sons to schools with white teachers. And so on. I do not believe there is a single MP who sends his or her children to a township school with 92% black teachers appointed by affirmative action. 

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Education for most children in South Africa, which means poor black children, has been systematically wrecked by the ANC. Educational outcomes for most South African children are now among the lowest in the world, lower than many in other African countries who spend far less on education. Most of our Grade 4 pupils cannot read for meaning; most of our Grade 5s have no mathematical knowledge; in an international testing for mathematics and science our Grade 9s came last out of 50 countries. Much of the blame for this lies with the South African Democratic Teachers Union (SADTU), which is politically powerful and which in effect controls education in at least six of our nine provinces. Most SADTU teachers have no interest in the welfare of the children in their care but great interest in their own salaries and conditions. They don’t put in the required teaching hours; they are often absent altogether on Fridays; they hold union meetings in school hours; and they are usually unqualified for the subjects they teach. They have been appointed by affirmative action. SADTU will not allow inspection or assessment of its teachers. SADTU teachers send their own children to Model-C or private schools. One of the reasons for our high unemployment is that so few black school leavers have any skills, thanks to affirmative action for their teachers; so part of the reasons why employers find it so difficult to meet employment equity targets is because these exact policies have denied black children the chance to acquire skills. These policies and SADTU are destroying the life hopes of our black children. The ANC is well aware of this but feels politically dependent on SADTU and therefore caves in to its every demand. In May 2017, at a gala dinner, Deputy President Ramaphosa delivered a eulogy to SADTU, praising it to the skies.

The ANC tells us that the purpose of affirmative action and BEE is to “redress the injustices of the past” and “to end the legacy of apartheid”. How will they do this? If a poor five-year-old black girl, whose parents suffered under apartheid, is sent to a township school with 92% affirmative action teachers to receive a terrible education, does this “redress the injustices of the past ”? Or is the way to “redress the injustices of the past” for the rich elite to send their children to elite schools with white teachers who had benefited from apartheid while the poor masses send their children to schools with black teachers who had suffered under apartheid? The captain of the Springbok Rugby team, Siyamthanda Kolisi, who led it to its greatest world cup victory, began his schooling at a township in Port Elizabeth. A talent scout spotted him and he was given a scholarship at the prestigious Grey High School, which has mainly white teachers. Was this a bad move? After all, the Grey School teachers had benefited under apartheid. Would the “legacy of apartheid” have been better ended by keeping him at a township school with black teachers who had suffered under apartheid?

Eskom has been wrecked mainly by the ANC, who converted it from one of the world’s best electricity utilities, providing South Africa with the world’s cheapest electricity very reliably and always repaying all of its debts, into one of the world’s worst utilities, with blackouts every day for hours on end, and with massive debt that it cannot repay. A major reason for this collapse is affirmative action, employment equity and BEE. Skilled white engineers and managers were driven out, under a process known locally as “space creation”. While load shedding was getting worse, senior Eskom managers were getting huge bonuses for meeting their equity targets and getting good BEE scorecards. BEE coal procurement is a major reason why Eskom’s costs have risen so dramatically, plunging it into huge debt. A typical big Eskom coal station needs about 16 million tons of coal a year, far too much to be transported economically over any distance. In the old days the station was located near or on a coal field, which was mined by one of the big mining companies (now referred to as being part of “white monopoly capital”) and was sent to the station by conveyor belt. The ANC changed this. It changed to coal procurement from BEE miners. Coal contracts were awarded not on the quality and prices of the coal but on the race, sex and size of the miner. Small, black, female miners got first preference, then small, black, male ones, then big, black female ones and so on. White miners got last consideration, if any at all. The result was that Eskom received bad, inconsistent, very expensive coal from little mines scattered all over Mpumalanga, delivered by road truck. This pushed up Eskom costs, caused failure after failure with the mills and furnaces of the power stations, and wrecked the roads and environment of the region.

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This pattern repeated itself in ANC municipalities. Contracts for supplying water and sanitation services to poor black communities were awarded according to BEE scorecards, not the price and quality of the services. So poor black people had to pay for bad equipment and bad services, while a few rich black people made fat profits – and the municipalities plunged into debt.

I recently spoke to a fellow engineer, but a more enterprising one than me. He and a group of South African engineers, scientists and commercial people want to start up a manufacturing business based on a new technology that has massive potential worldwide. I asked him if they planned to run the business in South Africa. He looked surprised. “God, no!” he said, and explained that BEE requirements would ruin it before it had begun. BEE is a leading reason why so few foreign companies want to invest in South African manufacturing or mining. BEE explains why the world’s biggest miner, BHP, was in such a hurry to quit South Africa altogether.

If affirmative action and BEE are not the best ways to correct the injustices of the past, what is? Simple. Get rid of BEE, affirmative action and all of the rest of the destructive policies of racial preferences. Instead of giving poor black people the worst possible education and the worst possible services, give them the best possible. Give contracts for serving the poor to the best, cheapest contractors regardless of race. Allow poor black children to be taught by the best teachers, regardless of their race, by the same teachers that the rich black elite wants for its children. Tackle the actual disadvantage of poor black people by giving them every opportunity to better themselves. Discriminate in favour of the poor, not in favour of the black.

Affirmative action not only cripples the economy but causes racial rancour and resentment. Skilled whites emigrate because they cannot get jobs. All blacks in senior positions are stigmatised by the curse of affirmative action. Whether or not they were competent enough to get the jobs on merit, they know that everybody regards them as “affirmatives”. This is humiliating. Affirmative action reduces the incentive to black people to study hard, further their qualifications, prove their worth and show their competence. Why bother when a black skin will get them a job without striving for self-improvement? 

BEE, affirmative action and all the other laws of black racial preferment have proved an utter disaster for the economy and a catastrophe for poor black people. We shall never have prosperity, low unemployment and racial harmony unless we get rid of them. Somehow we’ve got to persuade the ANC to adopt laws and policies that benefit everyone, not just a rich elite.


NOTES:

1. Ramaphosa on fronting: Ten year jail sentence for BEE “fronters”. 7 Sep 2016 Jimmy Swira. From “Transform Daily” of “Transformsa”

2. In a TV interview Julius Malema admitted that his sons went to a private school with white teachers but got angry when he was accused of hypocrisy and shouted, “They all do it!”, meaning that all the rich black politicians do the same – which is true. I don’t know what the school is but heard, and not confirmed, that it is an Afrikaans school, which is surprising. For the others I mention, there is a record of the schools they chose.

3. BEE coal procurement at Eskom was largely responsible for the disaster of Jan 2008, when many of our coal stations shut down in the heavy rain and the gold mines had to close.

4. Ramaphosa’s gllowing praise for SADTU was reported in full on the SA Government website.

5. I’ve heard horror stories from friends in the Western Cape Government about the failure of BEE contracts they were forced to sign over road repairs, hospital equipment and so on.

6. I am quite familiar with the exciting project my “fellow engineer” is busy designing and proposing. But I don’t want to name it here for fear it jeopardises its chances with our government. I can tell you on the phone.


*Andrew Kenny is a writer, an engineer and a classical liberal.

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