Those 100 new black moguls will have their work cut out – 9 March 2015, Business Day

RURAL Development and Land Reform Minister Gugile Nkwinti says of proposals to restrict land ownership by foreigners that "we won’t do anything foolish". No doubt we are all reassured by this. But it does seem foolish to suggest a cap of 12,000ha on farm sizes irrespective of whether locals or foreigners own the farms.

By John Kane-Berman 

RURAL Development and Land Reform Minister Gugile Nkwinti says of proposals to restrict land ownership by foreigners that "we won’t do anything foolish". No doubt we are all reassured by this. But it does seem foolish to suggest a cap of 12,000ha on farm sizes irrespective of whether locals or foreigners own the farms.

Imposing such a ceiling is rough on those hundred black industrialists the government plans to create. Last year, Deputy Trade and Industry Minister Mzwandile Masina said his department would stimulate the creation of "black billionaires and millionaires" across all sectors of the economy.

But no self-respecting billionaire farmer would be satisfied with a measly 12,000ha. Presumably that is why Agriculture Minister Senzeni Zokwana now says the cap is only a negotiating tactic. Perhaps Masina should also have a quiet word with Nkwinti.

Things won’t be plain sailing elsewhere, either. Take manufacturing. No doubt some of our new black industrialists will install generators to overcome the Eskom problem. But how will they get around the worker problem? Labour brokers might once have helped, but they are becoming a no-no. Proposals to make strike ballots compulsory were once on the parliamentary menu, but they are now also a no-no.

And the labour minister now has powers to determine wage rises, while a national minimum wage is looming. However, as Bheki Sibiya, chairman of PPC, asks, what happens if you are a small industrialist and cannot afford the minimum wage? Perhaps our new industrialists will be innovative enough to invent workerless production processes, rather like driverless cars.

That’s obviously the future. The National Treasury’s recent budget review noted that "labour-intensity of production continues to decline".

Sandile Zungu, vice-president of the Black Business Council, says dismissal procedures are "inordinately complicated and drag on forever". All the more reason not to hire anyone in the first place and go instead for the new workerless "smart" factory.

How about construction? The government cannot get much of its big infrastructure programme off the ground. So our new black construction moguls will have to do what the white ones are doing: look for opportunities elsewhere.

Mining? Great prospects here, surely. Many companies want to get out of SA, if only they could find buyers for their mines.

Moreover, Mineral Resources Minister Ngoako Ramatlhodi sees this as a wonderful empowerment opportunity. Time then to celebrate marriages in gold, platinum, and coal, with black economic empowerment points sprinkled around like confetti. Later, there can be a quiet divorce from SA.

As a bonus, the "stranglehold of monopoly capital on the economy", which President Jacob Zuma and Deputy President Cyril Ramaphosa have both been complaining about, would be broken.

But wait. We’ve got some of the richest mineral reserves in the world, so why are those avaricious capitalists so anxious to depart?

Are they frightened of the Economic Freedom Fighters, a mere 5% party? Are they scared of the African National Congress? Do they know something we don’t? Could their desire to quit arise from fear of export restrictions, price controls, skulduggery with mining licences, and militant unions? And will all these problems evaporate when the black mining magnates take over from the white ones?

As Gilbert and Sullivan would say, all this is "a most intriguing paradox".

We have a government whose hostility to business is matched only by most of its ministers’ ignorance of business, yet it wants to create 100 black industrialists over the next three years.

The communists and the nationalists will have to fight this one out. What fun! Let the games begin! May the best oligarch win.

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

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