JOHANNESBURG, 30 September 1999
Ceremonial greetings!
I am extremely pleased to be with you this evening to share in the historic occasion of the launch of Akulalwa Capital. The launch of this black-owned and managed, and I want to emphasise, black-owned and managed company, comes at a time when there are ser ious debates in some quarters about the future of black economic empowerment. I want to unequivocally confirm our ANC-led government's commitment at all levels to ensure that the vast array of opportunities in every sector of our developing economy should not and will not remain the preserve of a small minority.
Our overwhelming political victory that we attained in April 1994, and again improved upon in June 1999, will never be complete until we break the shackles of poverty; until we eradicate the entrance barriers to economic opportunity such as access to capit al; until every sector of our economy reflects the realities of our country's demography.
Your launch tonight is symbolic of the fact that we are on the right track. We are under no illusion however that the challenges ahead are still numerous. In the process we are learning through trial and error but we remain convinced that Black Economic Em powerment is the only way that we can accelerate the entrance of the previously disadvantaged into the mainstream economy.
I want therefore to congratulate all those who have been instrumental in making this exciting venture, Akulalwa Capital a reality. Your launch comes barely a week after President Mbeki told the USA-SA Finance Forum in New York that we must "continue to see k partners in the private sector to jointly exploit the business and investment opportunities that abound in our country and region." He also re-iterated that "the state's ability to undertake major investment projects geared towards job creation is severe ly limited." This reality, far from being a debilitating limitation creates a niche opportunity that can be exploited to the benefit of new entrants, particularly the new and emerging players in the financial services sector.
In government, and more specifically in my former capacity as Minister of Public Works, we championed the cause of procurement reform and alternate models of service delivery. Through the Asset Procurement and Operating Partnership model we geared private sector capital for the delivery of public sector infrastructure and have succeeded in entrenching the principles of affirmative procurement.
The issue of access to capital, is not only a constraint faced by the state, it is in fact the daily reality staring many potential entrepreneurs in the face. Whilst we are aggressively advocating for these constraints to be eased by the established player s in the financial services sector, we are mindful that this sector has historically been conservative in its approach. Many of them have since 1994 developed specific packages and initiatives to deal with the issues of black economic empowerment, affirmat ive procurement and access to finance by previously disadvantaged individuals and entities. Whilst the progress made is commendable, the challenges remain enormous. We cannot stand by idly but must rather proactively develop other vehicles to unlock resour ces and access to capital.
I believe it is the historic responsibility of blacks in the financial services sector to grow the stake in this sector so that we can more effectively leverage access to finance for emerging entrepreneurs. I must therefore congratulate SARHWU Investments and the South African Transport and Allied Workers Union (SATAWU) on the establishment of Akulalwa Capital. Your vision to become a fully-fledged niche and internationally competitive merchant bank is indeed commendable. It lies at the very crux of the mat ter that merchant banks, by the very nature of the role they play in the financial services sector, have the potential to slow-down or speed up empowerment; to improve access to capital or to raise the barriers to entry. We look forward therefore to celebr ating the many successes that you will achieve in this virgin territory for the majority of our people.
The stark reality is that the financial services sector indeed poorly reflects our country's demographics. I am told that of the 50 or so financial services sector companies in South Africa, less than 10% is black-owned and even fewer are black-owned and m anaged. Whilst at the level of ownership there has been some improvement, the performance on the account of black owned and managed companies is dismal. This is despite the fact that this sector has a critical role to play in championing black economic emp owerment and re-engineering the composition of our mainstream economy. According to the Reserve Bank Quarterly Bulletin of September 1999 the Financial Services Sector in 1998 comprised 18,4% of the Gross Domestic Product(GDP) in the South African Economy and it is steadily growing. We must ensure that black-owned and black-managed companies are positioned to benefit from the expected growth. Through doing this, entities such as Akulalwa Capital will able to facilitate the re-engineering of this sector and pass on the ensuing benefits to its shareholders, the ordinary men and women that drive the wheels of our economy.
Your launch today is thus not unrelated to our struggle to fully democratise all sectors of our country's economy. In fact, it is a key instrument to accelerate black economic empowerment that is so fundamental in our transition towards a non-racial, non-s exist and democratic society. As government, we remain your committed ally in taking forward the vision of accelerating the transformation of this sector and we assure you that we will not waver in our pursuit of meaningful social and economic transformati on. The strong policy framework and the many programmes that we have initiated over the past five years is a clear indication that we will relentlessly pursue the cause of black economic empowerment to its logical conclusion.
Allow me once more to congratulate you on this excellent venture. May your launch be a harbinger for many others to enter this vital sector of our national economy. We will watch with keen interest as Akulalwa Capital grows from strength to strength and as it translates into concrete terms the goals and vision of black economic empowerment in its truest sense; growing both the ownership of black companies as well as developing the operational expertise and social capital of those who have historically been denied these opportunities.
President Mbeki in his inaugural address urged us all to get back to work and role up our sleeves. The tasks awaiting us require relentless efforts and the will to mobilise our resources, particularly our social capital towards taking forward our vision of a nation at work building a better life for all our people. This is a task that we have set for ourselves and for which ordinary women and men daily struggle with their sweat and tears. We cannot and will not fail them.
In conclusion, it is said that whoever wishes to ascend to the pinnacle of achievement, must burn the midnight oil. May Akulalwa grow to become a model company in its ambition to be a global player in this sector. Perhaps, in the near future we will get to gether again to celebrate the fulfilment of that vision. I wish you every success on this historic achievement and assure you of our continued support.
I thank you.