In South Africa Empowerment Breeds Enemies

March 9, 2011  |  

(Wall Street Journal) — As a young engineer in South Africa’s apartheid era, Sandile Zungu was once asked by a white subordinate to use a separate toilet. As a businessman in the post-apartheid era of black empowerment, company doors of all kinds have opened to him.  In little over a decade, the 44-year old has amassed a fortune by building a broad portfolio of business investments, from financial services to pest control. African art adorns his office walls in Johannesburg’s swank Sandton business district, and he drives a black Mercedes sedan to meetings, even if it means traveling a dusty road to a gold mine.

But mounting criticism of the Broad-Based Black Economic Empowerment policy that has made that possible is pulling Mr. Zungu and other black moguls into a national debate over how to right history’s wrongs without upending business in Africa’s largest economy. BEE, as the policy is widely known, reaches across industries, compelling domestic and multinational companies operating here to meet such benchmarks as black ownership, skills training and development in poor communities. Ford Motor Co. last month said it plans to build a center to support black-owned, automobile-parts suppliers. Microsoft Corp. last year announced a $65 million program to cultivate young, black software developers. And Belgium’s Rezidor Hotel Group AB, which operates such brands as Radisson Blu Hotels and Resorts, expanded a partnership with black-owned South African enterprise Mvelaphanda Holdings (Pty) Ltd.

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