Under arrest

African countries should avoid shielding white settler business that frankly gained trade advantage through the barrel of the gun and allow Asian and African entrepreneurs who are making inroads peacefully

Fati Moalusi

In the face of a rise in the number of small businesses owned by foreign nationals in Botswana – the country has opted to introduce new trade laws barring foreign nationals from attaining trading permits for trades now strictly reserved for citizens.

This is rather a rare moment of radical trade patriotism in the SADC region. The region is known to shy away from taking bold trade decisions even such have become common in other regions of Africa.

Radical reforms in trade have always been met with unwarranted criticism with some describing it as swimming against a current of globalisation, if not regressive in times when the world is swimming towards free markets.

Botswana’s new trade laws are long overdue but so is the reversal of colonial legacy in their trades. As much as I find the new trade restrictions palatable, I take their introduction with a grain of salt.

That is because candidly on the surface they appear patriotic but to the core they are set to preserve the colonial legacy which has left indigenous entrepreneurs on the fringes.

The colonial set up continues to reign as business ownership overwhelmingly remains in the hands of the non-indigenous citizens while the county’s leaders continue to slave under fear that redressing such imbalances will result in capital flight.

Now that Asians and African entrepreneurs are making inroads into SADC countries it has become conveniently justifiable to oppose the said globalisation current and be counteractive to the idea of free- markets.

Reservation of trades for citizens is as anti-free markets as reserving trades for indigenous entrepreneurs so why the double standards. Protecting the interests of the indigenous entrepreneurs should be a priority, just as much as it’s a priority to protect business owned by white settler entrepreneurs in Botswana.

In my opinion African countries should avoid shielding white settler business that frankly gained trade advantage through the barrel of the gun and allow Asian and African entrepreneurs who are making inroads peacefully.

Trades Botswana seeks to reserve for its citizens are predominantly in the hands of non-indigenous citizens, this includes confectionery, peanut butter production, meat processing, bricks manufacturing, packaging, candles manufacturing and production of school uniforms amongst others.

By protecting these trades against Asians and non-citizen Africans Botswana only seeks to preserve the legacy of colonial oppressors.

Discontent and violence against foreign spaza owners are a summary of news reports on spaza shops in the last two decades in South Africa. A major discontent for indigenous spaza shop owners has been government’s failure to enforce laws against foreign owned spaza shops.

During the Covid-19 lockdown minister of finance Tito Mboweni announced an initiative set out to quell non-compliance with the law by spaza shop owners, vindicating outcries of indigenous spaza owners that previously pronounced to be xenophobic.

His announcement was crystal clear in its intention not to allow spaza shops to operate without trading permits, bank accounts and tax compliance certificates. It will be an insurmountable task to find any irrationality in the minister’s advances.

Pick n Pay and Shoprite have been unequivocal in their intention to enter the market and inevitably placing them at loggerheads with Asian and East African spaza owners who are currently dominating the market nationwide.

It’s a billion-rand market and white business has a sudden crave for it but because of the reputation of Asians and East Africans as feisty entrepreneurs, big business has sought political favours to pave the way for it to enter the spaza shop market with relative ease.

The road I’m alleging the minister is paving we have travelled many times before as South Africans. On one occasion ANC politicians paved way for the bread cartel do dominate the industry by deregulating it, prejudicing hundreds of indigenously owned bakeries around the country, ultimately leading to the bread price fixing scandal.

This time around minister Mboweni has been tasked to subdue competition using the law to pave the way for Pick and Pay and Shoprite to make inroads and take over the spaza shop market. The relationship the minster has with big business is well documented and often questionable.

Recently he held private talks not open to the media with clients of Goldman Sachs Investment Bank, a multinational where he was an advisor when the investment bank took part in the rand rigging scandal between 2007 and 2013.

Minister Mboweni’s advances just like new trade laws of Botswana are bound to protect interests of white owned big business more than they will protect indigenous entrepreneurs.

Shooting oneself in the foot seems to be all pervasive with our politicians. It is not even necessary to introduce new laws. Existing laws will hold just fine, what’s needed is enforcement of the existing laws.

The Immigration Act 13 of 2002 which stipulates that a foreign owned business must be established in the national interest of South Africa and that a minimum of R5 million must be invested into the book value of the business, has always been enough to protect indigenous spaza shop owners from foreigners.      

South Africa continues to exist under a cloud of failure to bridge the divide between the rich and the poor inherited from colonial and apartheid arrangements. Reasons for the said failure are countless but what one reason frequently neglected by analysts is the protection the ANC affords big business.

The protection either comes in a form of booby trap like obstacles making it impossible for new entrants to enter South African markets, or in the form of various unjust exploitations. One such example that effortlessly comes to mind is exploitation of the intellectual properties of the inventor of Vodacom’s Please Call Me service.

The Vodacom board consisting of ANC big wigs has for over a decade refused to appropriately remunerate the inventor even though the invention is said to have generated billions of rands for the company.

Instead of forging ways for indigenous township entrepreneurs to learn and partner with Asian and east African entrepreneurs who are savvy in township markets, minister Mboweni would rather clear the path for big business and ultimately widen the income gap between the rich and poor.

Maybe what the minister or the ANC should consider is establishing a retail grocery SOE and franchise stores to BEE compliant entrepreneurs across the country.

The mistake the ANC keeps on making is to assume that SOEs inherited from the previous regime will be sufficient to feed its appetite to empower the black majority. Existing SOEs are already burdened with contracts awarded to minorities at the dawn of democratic dispensation; including black majority to feed from the existing SOEs was always going to lead to SOE’s collapse.

The ANC should establish more SOEs to haul its policy of empowering black people into a reality. SASSA grant commercial transactions Shoprite is benefitting from could be benefitting the grocery chain store SOE.

Products manufactured by black industrialists or produce by black farmers could be supplying the SOE as part of black empowerment. If the ANC wants to accelerate access to opportunities for black entrepreneurs it should start warming up to State backed capitalism ideology practiced in China.

*Fati Moalusi is an independent contributor. He is a law student and former journalist