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Transformation at a snails pace in South Africa

The Real African|| By Dumani Mandela

South Africa transformation policies have created a viable but somewhat precarious black middle class. It is precarious is because a lot of people for whatever reasons in the transformation debate are not managing to be able to stay within middle class, although some are arising to be the new elite.

One of the reasons a lot of people are not staying within middle class is because the protest politics of yesterday are now becoming the boardroom protest politics of tomorrow. The debate for transformation is moving away from the political realm on the streets, and slowly into the boardrooms with government naturally overseeing entrenchment of policy.

Middle management and middle class in South Africa don’t always go hand in hand. Many young Africans are underpaid for their services compared to their European counterparts, and therefore it is difficult to maintain the African middle class, even with the job opportunities at hand.

The Census 2011 statistics revealed a significant difference in the average annual household income across the different population groups. Black African-headed households were found to have an average annual income of R60,613 in 2011. Coloured-headed households had an average of R112,172, while the figure for Indian/Asian-headed households stood at R251,541.

White-headed households had the highest average household income at R365,134 per annum. By 2016 the figures are still very stark between black and white earnings.

According to Analytico a data and earnings analytic consultancy a pole of 692,704 individuals revealed that white males working in the formal sector could expect to earn a median salary of R21,700 per month, while white males working in the formal sector as professionals could expect to earn a median salary of R30,453 per month.

By contrast, black males working in the formal sector could expect to earn a median salary of R3,612 per month, while professionals could expect to earn R9,244 per month. White females working in the formal sector could expect to earn a median salary of R13,331 per month, with professional females expecting to earn R17,700. For black females those figures dropped to R2,887, and R11,155 respectively.

Secondly South Africa has one of the biggest pay gaps in the world – with CEOs of the JSE’s top listed companies earning as much as 725 times their workers average salary.

According to Business Tech Magazine; “research shows that seven of the top earning CEOs of JSE-listed companies received total compensation above R60 million in the past financial year – more than 300 times what the average worker (non-agricultural) earned in 2013: R180,000.

What do South Africans spend their money on

These figures in 2016 have gotten significantly worse as Statistics South Africa revealed that when average salaries for 60% of the workers (mostly black) in South Africa is calculated, it worked out to R4,200 a month. This is less than in 2012 when 60% of workers earned R4,400 per month, and in 2013 when it was R4,333 per month.

Further gains must be made in South Africa in the transformation debate not only from beginning to create parity amongst the earnings of various race groups but also adjusting executive compensation to meet the realities on the ground. In Sweden there is an unspoken rule in the market that the highest paid member of the company should never be paid above 100 times more than the lowest paid member.

This is in order to create environments, which are representative of corporate inputs where the skills being traded against the output which are the salaries being paid to each member of the company. South Africa has made some great strides in the transformation agenda in the last two decades but still more needs to be done in order to reflect a society where everyone has equal opportunity for equitable pay with a level of sincere transformation.  

The question we must answer however is how are we going to bring about a paradigm shift in the sincerity of transformation.

One of the answers I have seen in my working life is to develop permanent African investors whom can drive the agenda for change as equity active investors. What permanent investment means, is that we should develop African investors whom are interested in investing in African centered businesses over their life spans and whom are not eager to cash out at an optimal value once the business is matured.

Change is inter-generational and is not limited to change within our parent’s generation and our generations. When we talk about transformation, we as Africans need to look several generations into the future and not just within our lifetime. The investment decisions we make now should impact another two to three generations to follow. Developing African investors whom have the transformation agenda at heart will naturally lead to more representative businesses in South Africa.

We in South Africa secondly need to have a common message for the transformation agenda and to develop a more sincere perspective when it comes to transformation and inclusion of the previously disadvantaged. For black people transformation has a more holistic meaning and goes beyond economic remuneration.

Tawanda Washington Chidzawo

In this extract from article by: Washington Zindoga Tawanda on integration. Beyond black and white – Is transformation color-blind, it adequately addresses the holistic nature of transformation sought by black people in South Africa.

The objective of transformation is the establishment of a society characterized by the equality of the national groups, by a proper racial balance or representativity throughout all its sectors, classes and status orders.

As People of African decent we know that transformation is not limited to economics. It is in the way we relate to one another across race and class, and how we are educated to be equal citizens. Transformation is all encompassing and delves into social relationships in terms of how are we treated by the system. This by implication means that society must change at its core and not just pure economics to justify the transformation debate.

The phrase transformation in South Africa in the last twenty years has become like a swear word. Some belie that the prerequisites for transformation have been met.

This according to current statistics is a fallacy, and transformation should continue for the foreseeable future to make the necessary impact of being inter-generational. The transformation debate is as much ideological conviction for people of African descent as it is a matter of economic and political transformation.

This in principle means that people of African descent want holistically transformed societies and not just sectors of society. This is from education to policy to politics and economics.  For transformation to take place, society must have a paradigm shift, where all are treated equally and equally benefit for arising national opportunities.  It seems as if this will become the next clarion call for our generation of social participants in the global economic system. The call will be how to bring about sincere transformation.

In South Africa this will be about reinforcing the prerequisites for change for all races to equally participate in deriving equal and common value in the market place. True transformation is about changing the embedded issues around how we interrelate to one another across race and class and coming up with new means of equal participation for all within our society. We in South Africa need a true institutional reform that seeks to adequately deal with the vestiges of the past.

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