Fantasties, fun and the mass production of black millionaires – Business Day, 25 August 2014

THE more the government fails with the basics, the more it takes refuge in fantasy. It cannot keep the lights on, stop rhino poaching, or get the teachers it employs to spend more than three hours a day in class, but it will now mass-produce black industrialists and black farmers. That’s in addition to achieving "energy sovereignty", setting up a Brics bank, establishing our own shipping fleet, and creating a "mining champion".

THE more the government fails with the basics, the more it takes refuge in fantasy. It cannot keep the lights on, stop rhino poaching, or get the teachers it employs to spend more than three hours a day in class, but it will now mass-produce black industrialists and black farmers. That’s in addition to achieving "energy sovereignty", setting up a Brics bank, establishing our own shipping fleet, and creating a "mining champion".

This is what the country gets if it has three dozen Cabinet ministers and three dozen deputy ministers. They have to justify their existence. Nor are politicians who fantasise necessarily a bad thing. In a country where ministers who actually do things are prone to do the wrong things, we are probably better off with fantasy than we would be with action.

Moreover, this is how we like our politicians, so it is wonderfully democratic. Nothing is more fanciful than the National Development Plan with its promises of 11-million new jobs, zero poverty by 2030, trillions of rand in infrastructure spending, and 5.4% average annual economic growth, but opposition parties, the media, and business all just love it.

So when the new Trade and Industry Deputy Minister Mzwandile Masina promises his department will create 100 "sustainable" black industrialists, "millionaires and billionaires", it is only fitting that business organisations applaud him. Make-believe is the name of the game and we don’t need any spoilsports, thank you.

Another piece of fantasy meriting applause is Masina’s announcement that the Department of Trade and Industry will take over the black economic empowerment (BEE) accreditation and verification process. We should applaud here not because the takeover will improve that process, but for the very reason that it won’t.

One cause of the breakdown of the previous government’s racial policies was that they became more and more difficult to monitor and enforce. The department is likely to make such a mess of verification that it will undermine the whole edifice of BEE.

Some BEE verification agencies are in a tizzy because Masina plans to take bread out of their mouths. And, they say, the department does not know what it is doing.

Maybe not. But there will be a trade-off. The department will introduce incompetence into the verification process. Natch. On the other hand, for companies willing to pay for the right score or certificate, life will be easier.

As we all know, for every crooked official there is a businessman willing to pay a bribe. Prices of certificates would be determined in a new grey market: a level-one certificate would cost more than a level two, etc.

Also all in a tizzy will be the officials handing out government contracts on the basis of BEE certificates. They won’t know if they’re being sabotaged by their colleagues on the floor above or below who have pocketed a gratuity arranged by one of the "fronts" the increased BEE violation penalties are designed to stamp out.

So in the end, the BEE story may have a happy ending. Verification certificates will end up as discredited as the policy itself. As for black millionaires, the department will not wish to admit failure to create the desired number. So perhaps you will be able to buy a certificate from the verification department saying, "I wanted to be a millionaire and now I am one".

• Kane-Berman is a consultant at the South African Institute of Race Relations.

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