A flag of the African National Congress (ANC). Picture: Michel Bega
Economic freedom will be a step closer if the Democratic Alliance (DA) succeeds in its high court bid to have the ANC’s cadre deployment policy declared unconstitutional.
Yet cadre deployment is not the only obstacle that must be removed if this country is to flourish.
There’s also a panoply of race-based legislation which adds to the cost of doing business in South Africa.
Consider the construction mafia. These thugs pitch up at building sites, demanding at least 30% of the contract value.
They usually purport to represent a business forum. And they threaten to burn equipment or commit other acts of violence if they don’t get their way.
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Intimidation, violence and destruction are their trademarks. They bring nothing constructive.
I have encountered such gangsters on the fringes of Joburg Water and Joburg Road Agency projects in my ward.
The exchanges have been brief. I tell them councillors are by law not allowed any say in who gets a job or a slice of a contract.
I advise the contractors to call the South African Police Service or the Johannesburg Metro Police Department.
And don’t start negotiations with the intimidators. To do so would open the door to trouble. Construction mafia are a significant factor in South Africa.
Moneyweb previously reported how such gangs were disrupting rebuilding efforts after last year’s “unrest” in KwaZulu-Natal and Gauteng.
They were affecting projects worth billions and harming investor confidence.
The “30%” which gangs routinely demand alludes to the subcontracting requirement in the Preferential Procurement Policy Frame work Act (PPPFA).
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Lawyer friends advise that the PPPFA does not apply to private contracts.
But this does not stop gangs trying their luck at private construction sites. They are emboldened by, for example, Regulation 9 of the Preferential Procurement Regulations of 2017.
This gem states that the successful bidder must subcontract a minimum of 30% (of the value of the contract) to (one or more) exempt micro enterprise or qualifying small enterprise which is at least 51% owned by:
The PPPFA is not the only law using such conditions.
Broad-based black economic empowerment legislation is another minefield of jargon, ratings and scorecards, none of which has anything to do with providing the best service or products.
Despite being nominally broad-based, BBBEE has, in reality, been used for political ends to enrich a narrow-based elite.
ANC cadre deployment, which has been official ANC policy since Thabo Mbeki’s election as party president in 1997, has contributed to this abuse.
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In fact cadre deployment, BBBEE and PPPFA racial preferencing are inextricably intertwined. Legalised jobs for pals.
No wonder PoliticsWeb editor James Myburgh says: “The point about corruption in South Africa is not that it is and was condoned, but it is compulsory.
“You can’t legally do business with the state or SOEs without essentially cutting in some or other ANC faction.”