A plan by Namibia, among the world’s most economically unequal nations, to better distribute wealth among its citizens may end up the way neighboring South Africa’s has — benefiting an elite minority.
The nation is working on a law that will require all businesses to be at least a quarter owned by “racially disadvantaged people.” While only about 6% of Namibia’s 2.5 million citizens are white, they own most enterprises. This is a legacy of white-minority rule that South Africa imposed when it controlled Namibia from World War I to 1990, with black people being disenfranchised and displaced.
Critics of South Africa’s policy, including the biggest labor-union federation, say it has failed to redress the inequalities because it focuses on increasing black ownership of companies rather than raising education standards to match a skills shortage, and has benefited a small number of wealthy individuals. Proposals by Namibia, the world’s biggest marine-diamond producer, are similar, which could hamper investment and growth in an economy that’s contracted every quarter since March last year.
From Moneyweb
The basis of my presentation in Namibia two months' ago was that Namibia would do well to learn from what South Africa has learned (or learnt as the Daily Maverick is now wont to write). BEE has made massive strides but my god is has made some monumental mistakes - the guptas are the perfect example.
I finished my presentation with a quote from Jenny Cargill's definitive BEE book - Trick or Treat (pp 82/3)
Yet evidence suggests that South Africa should be very cautious about drawing on Malaysia's (Bumiputera Policy). Malaysians I spoke to often cautioned against using their country as a model to justify BEE. Instead they believe it offers many mistakes on what to avoid.
I would love to have put it better. Gerrit van Rooyen, quoted in the lead article on Moneyweb hit the nail squarely on the head.
The plan “has caused much unease among white business owners and heightened investment uncertainty,” Gerrit van Rooyen, an analyst at NKC African Economics in Paarl said. Both governments have to “create incentives to boost employment and stimulate investment. Black economic empowerment cannot succeed without job creation and wage growth.”
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