South Africa's new black rich as new targets

Peter Vundla drives a flashy sports car, collects fine art, plays golf, and savors his success in the new South Africa at some of its most exclusive clubs. He is the very essence of a class the country desperately lacked during its apartheid past: the black bourgeoisie.

"I always intended to be a black fat cat," says Mr. Vundla, chuckling in a dapper designer shirt and tie. "I am one now. And I love it."

Five years of democratic rule opened the door to scores of government-sponsored "black empowerment" investment deals. These, along with a push on corporate affirmative action, have produced a small cadre of affluent blacks.

Their emergence has provoked questions among some black leaders, paralleling ones that white societies elsewhere have long asked: Do the rich have a responsibility to uplift the impoverished masses? Are South Africa's new rich abandoning the apartheid-era "struggle" to create a better life for all blacks - in favor of enriching themselves? Deputy President Thabo Mbeki, expected to succeed Nelson Mandela after the second all-race elections June 2, has accused some in the black elite of "a seemingly insatiable and morally unbound greed."

In part, Mr. Mbeki's anger is aimed toward corrupt people in his own government. Dozens of politicians and former freedom fighters who landed top bureaucratic posts have been caught taking bribes, stealing public funds, and favoring friends.

No fewer than 30 apartheid-struggle comrades, who were elected to serve the people in 1994, have since abandoned the halls of Parliament to seek richer pastures in business. Educated and articulate, they can name their price as companies desperately seek black "empowerment partners" to win government contracts or bid on privatization deals.

Some blacks reportedly are selling themselves to the highest bidder, collecting checks to sit quietly as token Africans in white boardrooms.

Learning from other countries

Tony Yengeni, chief whip for the African National Congress (ANC), urges members of his government and the business elite to learn from the experience in other African countries.

"The turmoil in Africa today - famine, military coups, and so on - is partly the result of African leaders who fought for independence but then enjoyed the fruits of their power and forgot about the people.

"The black elite must help rebuild South Africa.... There is a serious danger that those who benefited since the end of apartheid will forget who they fought for."

The roots of such a danger lie in the past. A quest for wealth is understandable when it has been unfairly denied to one group of people for so long.

At the height of apartheid, a segregated education system sought to ensure that blacks qualified for little more than the most menial jobs. They were barred from owning more than one store. They could not own property outside the "homelands" set aside for them.

Even as the restrictions were gradually lifted during the 1980s, the successful black businessman remained a rarity. The few black professionals could be promoted only so far before they hit the impervious race barrier.

So the democratic government elected in 1994 has made it a political imperative to change South Africa's corporate complexion. Ever so slowly, the white hold on financial power is breaking up.

Three years ago, blacks controlled just 1 percent of the Johannesburg Stock Exchange. Now the figure is 5.5 percent. A further 10.8 percent of the market is held by companies under "black influence," meaning they have at least some black directors on the board.

Meanwhile, the proportion of nonwhites in executive and senior management positions has doubled since 1994 to 7.5 percent. Blacks in the nation's top income category have tripled, from 2 percent in 1990 to 6 percent today.

Some do as some whites did

Clearly, wealthy blacks are far from forming a critical mass. But the so-called buppies (black and upwardly mobile) and brown millionaires are highly visible.

"Unfortunately," says Steven Friedman at the Centre for Policy Studies in Johannesburg. "the black elite measures its progress in the same way as the old white establishment: by the size of your house, the number of cars and cellular phones you own."

Thulani Kumalo, a young man with a cell phone and gold watch, candidly admits he likes to be seen at outdoor bistros in upmarket Sandton.

"You know, we have been deprived for so long that, when we have money, we want to show it," he says. "I feel like I am somebody here. I feel rich. I look around Soweto and see people driving BMWs and sports cars. And I think: They have arrived."

Such conspicuous consumption causes discomfort in a country where almost 50 percent of the population (mostly rural blacks) is living below the poverty line.

It's not surprising that people on the bottom rung don't join in the gushing about black empowerment - not when the economy has shed 500,000 jobs in the last five years and unemployment sits at a staggering 30 percent.

The American dream - that anyone can make it rich by working hard - may be functional in the United States, because the economy is growing at a rate that can deliver on the promise. But Mr. Friedman worries the ostentatious black role models here are offering false hope in South Africa's shrinking economy.

"The reality in this society is that most people will never make it," says Friedman.

"There is nothing wrong with a black upper class. But it does nothing to close the gap between the rich and the poor. It only de-racializes inequality, to an extent."

Vundla is more optimistic. South Africa's old white elite never had a social conscience, he says, but black capitalists are a different breed.

"I'm going to ensure my personal empowerment filters down to the tea lady," vows Vundla. "The white fat cats on their own were not concerned about alleviating poverty. The new [black] guys will be concerned."

Vundla grew up in Soweto. He was still living in Soweto when he quit his job in 1991 - the year after Nelson Mandela was released from prison - and started the country's first black ad agency out of his home.

Today, he's worth millions. His agency, HerdBuoys, has grown into an industry giant with big-name clients such as Coca- Cola. And Vundla makes no bones about how he hired his some 200 employees: blacks first, whites last.

Transfer of wealth

Pamodzi, an investment firm Vundla started with other black professionals, bought a top food company last year in a deal hailed as the country's third-biggest transfer of white wealth to black hands.

Others are working to spread the wealth.

One example in the news this month is Ntombi Msimang, owner of two restaurants in Pretoria. She seeks to help other black businesses as administrator of an investment fund offering start-up loans.

When Louisa Mojela and three associates formed Women's Investment Portfolio Holdings (Wiphold) in 1994, they were serious about empowering the most disadvantaged people of all: black women.

"Before the initial public offer we had workshops all over the country to explain what it means to hold a share. It was a whole educational process," says Ms. Mojela.

Wiphold attracted some 18,000 women investors by allowing them to buy in for as little as $100. "Ordinary people, domestic workers, rural women could be in a position to afford that,." says Mojela, adding frankly:

"We are in this to make money.... [But] I would always like to remain an old township girl. I would hate to see myself as any kind of elite."

Vundla still gets his hair cut in Soweto. And he says he won't forget for whom the struggle was fought.

"That's how my dad brought me up," he says. "I should not rise from the ranks, I should rise with the ranks."

You've read  of  free articles. Subscribe to continue.
QR Code to South Africa's new black rich as new targets
Read this article in
QR Code to Subscription page
Start your subscription today