South Africa’s black majority directly owns less than 10% of the Johannesburg stock market, a study showed on Thursday, evidence that Africa’s top economy remains firmly in white hands nearly two decades after the end of apartheid.
Despite the ruling African National Congress’ drive for “black economic empowerment”, under which firms are set black ownership and other targets, millions of blacks remain trapped in poverty and excluded from the formal economy.
Coming less than two weeks before the start of an ANC leadership election conference, the study will increase pressure on ANC President Jacob Zuma for more “black empowerment”, widely criticised for creating a politically connected, self-serving black corporate elite.
In June, Zuma called for a “dramatic shift” to redress the wealth balance in favour of blacks, who account for 80% of South Africa’s 52 million people.
“If you look at the demographics of this country, what would be normal is that no less than 50% of the JSE [Johannesburg Stock Exchange] should be owned by black people,” ANC spokesman Keith Khoza said.
Frustrated by the slow pace of change, the ANC’s Youth League has called for the wholesale nationalisation of mines and banks and the seizure of white-owned farms—a policy that triggered economic meltdown in neighbouring Zimbabwe in 2000.
The JSE-commissioned study showed that black investors directly hold 9% of the bourse’s top 100 companies, which represent nearly 90% of its US$834 billion market capitalisation.
Black ownership rises to 21% when pension funds and other indirect holdings are taken into account, and a heady 33% when foreign holdings of Africa’s biggest stock market are stripped out.
But some experts question the ability to track black ownership through pension funds, which ultimately represent thousands of people, or exchange traded funds.
“I have a problem with what comes after the 9%,” said Duma Gqubule, a consultant who specialises in black ownership issues. “In South Africa, we’d call it manga manga accounting—financial witchcraft.”
Despite the ANC’s misgivings, a black business lobby group said the incremental progress made had hammered home the need to redress three centuries of white economic dominance.
“There’s reasonable progress in the level of ownership by black people, notwithstanding the fact that the economy has not grown significantly over the last year,” Sandile Zungu, head of the Black Business Council, told Talk Radio 702.
“What that really means is that there’s beginning to be an attitude among South Africans that we have to transform the economy.”