"Government is getting wise to fronting," says Org Geldenhuys, director of Abacus Recruitment. "Companies have realised that the government is serious about black empowerment and are looking seriously at equity ratios," he continues.
"It is no longer good enough to do fancy window-dressing. Companies scrutinise shareholding documents and the overall makeup of the company far more carefully these days before signing contracts."
He explains that this is happening at a time when there is also increased pressure from the public and private sector with regards to better delivery. "Although there is certainly more pressure for companies to strongly consider black empowerment, there is also mounting frustration because business expectations are often not being met."
Phineas Desando, a director at M-R Public Sector, an asset tracking and verification company with a number of government clients, says it is regrettable that there is still so much black empowerment taking place without the investment of real money. "It is a pity that there is still a lot of fancy footwork when it comes to so-called black empowerment," he says. "Unless black shareholders actually put money into the company or the new empowerment entity, it is not true empowerment."
He adds that empowerment companies often have to borrow huge amounts of money to fund their purchases, which in turn has a debilitating effect, as very often the company will not get off the ground due to the weight of the debt.
"If, say a listed company - or any company for that matter - finances the purchase of black-owned shares by lending the money or by simply conducting a share handover - this is, in reality, an insult to the whole concept of black empowerment," he says. "Where will the power come from? If you give someone shares, or lend them money to buy shares, who do you think is going to sign cheques and make decisions?"
The solution?
"There has to be an element of compromise and a certain level of acceptable collaboration that will allow the equity ratios to be met and the correct skills portion to be attained," says Geldenhuys.
"Delivery is certainly in question now," he continues. "As we see a growing drive towards demanding delivery, we will start seeing black empowered companies looking for white skills to provide them with the necessary skills so that they can deliver on their contracts.
"This collaboration is important and, over time, we will see the necessary skills transfer taking place. In fact, skills transfer is just as important as kick-starting true black empowerment."
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