Black Economic Empowerment in the Kenyan Context

“Each of us is as intimately attached to thesoil of this beautiful country as are the famous jacaranda trees of Pretoria and the mimosa trees of the bushveld – a rainbow nation at peace with itself and the world” Nelson Mandela 1994

With a 2017 estimated population of 56 million who call the place home, it is not hard to see why Mandela referred to his country as the “Rainbow Nation”. The 2011 South African national census found that 79.2% of the population was of African extraction, 8.9% were categorized as White, 8.9% were Coloured and Asian were at 2.5% of the population. A category called “Other/Unspecified” was found to occupy 0.5%.

In the decades before South Africa achieved democracy in 1994, the apartheid government systematically excluded African, Indian and Colored people from meaningful participation in the country’s economy. The Broad Based Black Economic Empowerment Act of 2003 (B-BBEE) was created to “situate black economic empowerment within the context of a broader national empowerment strategy, focused on historically disadvantaged people and particularly black people, women, youth, the disabled and rural communities.”

Institutional mechanisms were later set up for the monitoring and evaluation of B-BBEE in the entire economy including independent verification agencies that would issue certificates of compliance. In 2007 new Codes of Good Practice were gazzetted by the South African government to definitively establish ownership, management and control, employment equity, skills development, preferential procurement, enterprise development as well as socioeconomic development.

The unintended consequence of the B-BBEE program has been to create “black privilege”. As much as “black” was anathema in the apartheid regime, not having enough“black” in the current regime presents an economic disadvantage to companies looking to do business with government agencies or get licenses in regulated sectors like mining, banking and telecoms. The beauty of the B-BBEE program is that it is far reaching beyond just the companies that do business directly with the government. It looks at the wider planet, capturing not only the owners but also the employees, suppliers and service providers of those companies to ensure that the economic benefit envisaged cascades beyond just the boardroom to other stakeholders that would ordinarily not have the opportunity to be employed or to participate in the procurement process.

To be considered black, one has to be a black African, Indian or Colored and have been a citizen of South Africa before 1994. Consequently, non South African African professionals working in South Africa, whether male or female, are given the same ranking as white male South Africans due to the provisions of the Employment Equity Act of 1998. This act requires firms that employ more than 50 people to annually report on their progress towards having “blacks” as identified by the B-BBEEframework at every level of the organization and face financial penalties for not meeting set targets.
The result of that black privilege has been a brain drain of skilled South African white professionals who now face undisguised glass ceilings in the work place as the legislative regime rewards a decision to hire or promote a black person, where black means black African, Colored or Indian, than a white person, where white means South African white or non South African professional.
In Kenya, the recent calls for secession of some counties who have not enjoyed the economic benefits of past political regimes needs some sober rumination. Beyond the rabble rousing antics of politicians lies a significant group of Kenyans who do feel excluded from basic employment and procurement opportunities, notwithstanding the programs to push for youth, women and persons with disabilities. The question is: Can legislation on the manner in which corporate Kenya hires workers and procures from its suppliers and service providers jumpstart the equilibrium that is being sought? The definition of corporate Kenya could be extended to any entity within the public and private sector that employs more than 50 people. The challenge to applying such a legislative regimehowever, would be twofold: first we would have to ensure a strong, independent verification and certification mechanism. Secondly we would haveto take into account existing demographics around actual tribal numbers that will set a basis for determining what our workforce should reflect from a representation perspective, and then permit a phased approach to achieving those goals in the medium to long term. The last thing such a legislative regime should do is to create a “minority privilege” that eventually shuts out the “majorities” from employment and doing business in Kenya.

Twitter: @carolmusyoka