I ask Sandile Zungu whether he thinks it is fair that only a few big players seem to be benefiting from empowerment deals. He responds by saying he believes true entrepreneurs like him would have been successful regardless of the transformation policy.
‘BEE [black economic empowerment] is an enabler, but it is not the only thing that propelled me to success,’ he says. ‘It was also not conceptualised to empower millions of people. There are other schemes that are meant to benefit a broad base of people, such as those by MTN, MultiChoice, Sasol and Vodacom. Ordinary people have made a lot of money out of these schemes by investing hundreds of thousands and exiting with a couple of million. These schemes have empowered many people.’
Broad-based BEE
When the policy was transformed into broad-based black economic empowerment, Sandile and other industrialists were critical of it out of concern that it would create the expectation that a vast group of people would suddenly become rich. It had to be clarified that ‘broad-based’ means the criteria for black economic empowerment would be expanded to include more than black ownership and would also take into consideration corporate social investment, enterprise development, management control and affirmative procurement.
‘There is no capitalist economy where every single person is an entrepreneur or businessperson. Some people are more than happy to earn a salary and to go home after a long day and do other things without worrying about work. We have created a misplaced notion that everyone would become rich and when it doesn’t happen we resort to blaming the so-called usual suspects [the seemingly small and exclusive group of black billionaires].’
According to him, the people who should make empowerment happen ‘are those who got the gains by virtue of their skin colour through a corrupt and illegitimate system called apartheid’.
Sandile believes the share schemes that have been initiated by big companies and the successes of individual black businesspeople shows that black economic empowerment has been successful. ‘My view is that BEE has worked, maybe not as well as it should have, but to think of it as a failure is ridiculous. Apartheid is the failure, because it created the morass that we find ourselves in. Yes, we can improve on BEE’s efficacy and its instruments; we can tweak it to drive certain behaviours and certain outcomes, but it is definitely not a failed policy.’
Sunset clause
Should it have a sunset clause? I ask.
Sandile says no. ‘BEE is about ensuring that the economy reflects the demographics of the country. The sunset is not about time; the sunset is about outcomes. For as long as black people are in the margins of the economy, this thorn of BEE must remain ever present and prick the conscience of everyone. In my view we have not achieved the necessary outcomes yet. In fact, in the last couple of years we have taken our foot off the pedal, and we should be looking at ways to speed up the process.’
Sandile believes South Africans must be dynamic in creating economic growth in the country and should not solely depend on government to do so. We live in a world filled with new opportunities, he says, and the revolution in digital communications is in its infancy. ‘We are part of many global networks experiencing digital disruption, which has already changed the way we live and will continue to upend old industries and create new ones.’
In his view, new business models and careers are going to emerge. Professionals and entrepreneurs should align their thinking accordingly. ‘My advice to businesspeople is to consider a new logic. Our growth path has to be outward looking and based on exports. Given that we cannot create more internal demand, we have to grow by servicing the world and competing in it.’
He points out that key parts of the economic infrastructure, such as power, communications and transport, cannot be serviced by the state alone. ‘We need to move from a developmental state to a developmental society, where entrepreneurs have to address underperformance in areas traditionally served by government.’
Role of family
On a more personal note, he values the role of family in the lives of finance professionals and entrepreneurs. ‘Business is not easy . . . you can be a tough person dishing out instructions at the office and making big decisions, but after hours, you have to have someone who will be a sounding board for you and who you can trust to be frank with you. Generally, it’s your life partner who will point out things like having to tone down your words when you are being interviewed. The input of your family is invaluable.’
Sandile knows the power of personal and business networks. ‘I did my MBA in 1995 and while I’ve probably forgotten most of the content of the course, what remains are the relationships with people I was in those trenches with. The programme I did at Harvard again introduced me to people from across the globe. Wherever I go in the world, I have friends who are only a Facebook message away from meeting with me.’
Coming back to his Zulu heritage, Sandile put his money where his heart is by investing in one of the great symbols of his community. In 2020, ZICO purchased AmaZulu Football Club from Dr Patrick Sokhela. The team is often a relegation candidate at the bottom of the premier league, and Sandile’s desire is to transform the team into a championship-winning side.
‘The team is now doing extremely well; we hope they will be like a phoenix rising from the ashes. When King Zwelithini died in 2021, he must have had a smile on his face because he had seen the resurgence of his team. AmaZulu is a part of the psyche of the Zulu nation. So, as the Zulus mourn the king’s passing, we try to provide tears of joy as a football team. We are playing our part in contributing to social cohesion in KwaZulu-Natal.’
Here is an African industrialist channelling his business acumen for community upliftment. South Africa could do with a lot more Sandile Zungus.
This article is a brief extract from the book THE CEO X FACTOR – Secrets for Success from South Africa’s Top Money Makers – available here https://www.takealot.com/the-ceo-x-factor/PLID92980382
