Entrepreneurs receive awards for contributions to economic freedom

At a function in Johannesburg today, Dr Sam Motsuenyane, President of the Free Market Foundation (FMF), presented the 2003 and 2004 Free Market Awards to Jacob Makwetla and Herman Mashaba respectively. The awards recognise individuals who have made outstanding contributions to the cause of economic freedom.

Jacob Makwetla’s citation described his contribution to the cause of economic freedom: Mr Makwetla was involved with the National African Federated Chamber of Commerce (NAFCOC) for many years and has been a dedicated community and business leader. In his service to NAFCOC, he helped mostly small black businesses to negotiate some of the most trying times in the history of black business in South Africa. NAFCOC once established that a black person wishing to open a small retail outlet in a black area was required to obtain 32 different approvals before it could open its doors. Mr Makwetla and other members of NAFCOC played an important role in having these and other obstructive requirements removed, so allowing businesses to open freely without these impediments. He has played an important role in the development of black business in South Africa and in improving the environment in which business operates.

In accepting his award Mr Makwetla described some of the difficulties experienced by black business people during the apartheid era. He took great pride in the work he and the other members of NAFCOC had done to alleviate the problems encountered by small black-owned firms, allowing them to grow and prosper.

Herman Mashaba is an inspiration to aspiring young South Africans. He has shown what can be done with little money and lots of courage and determination. At the age of 26 he had completed part of the second year of a BAdmin course at the University of the North, no money, and a few years experience of working in distribution and sales. Despite his relative youth, Herman had great ideas. He borrowed R30,000 from two business friends and he and his wife Connie and two friends started Black Like Me, marketing and distributing ethnic hair products.

Within 7 months the loan was repaid and Black Like Me went from strength to strength. In 1997 he sold 75% of the business to Colgate-Palmolive, buying it back in 1999. His company had 47% growth in 2001 - the most rapid in the industry. Black Like Me created a new image in 2002, went international, launching in the UK, and added fragrances and cosmetics to its range. In 2003 it entered the Personal Care Market.

Changing, improving and growing, Black Like Me has become a household name in South Africa and so has the name Herman Mashaba. He has shown others what can be done with dedication and hard work. It is entrepreneurs like Mr Mashaba that demonstrate to the world the contributions that business and enterprise make to the upliftment of a nation. At the outset he overcame barriers to economic freedom and in doing so contributed to their removal and now by his example demonstrates the benefits of freedom.

In his acceptance speech Herman Mashaba asked the question: ‘when can we and shall we call ourselves fully free?’ He pointed out that the goals SA currently aspires to freedom from: want, hunger, deprivation, ignorance, suppression and fear. Then there is the desire for a world of peace, democracy, non-racialism and non-sexism. He then posited the view that SA should progress beyond aspiring to ‘freedom from’ towards a more challenging ‘freedom to’ such as the freedom to create, express oneself and take on new things with courage and conviction.

In his keynote address ‘The fight against poverty and unemployment’, Dr Motsuenyane said that poverty alleviation and employment creation had featured prominently in the manifestos of the various political parties. During the past ten years the government had maintained tight budgetary controls and had also introduced numerous measures to promote economic growth and attract foreign investment. It had also increased social grants to pensioners and young children. Although the economy had once again started growing after years of stagnation, this growth was not sufficient to ensure a decline in poverty and unemployment.

The recently released U.N. Development Report portrays South Africa as ‘a country in crisis, with almost half of all South Africans living in poverty’. FMF research showed that the prolonged stagnation dated from the 1960s and that per capita GDP in US Dollars and inflation-adjusted rands is lower than it was in 1970. This meant that young South Africans had lived their entire lives with the average person getting poorer. According to the U.N report there had been numerous social and economic reforms during the past ten years but it was now time to reflect on ‘how to move forward’. The general reaction to the U.N. report in SA has ranged from tacit acceptance of its major findings to criticism of the report on omissions and shortcomings. Whatever the reservations may be, there would surely be agreement that reducing poverty and unemployment must be among SA’s most immediate challenges.

NAFCOC and the FMF initiated the Law Review Project, which was responsible during the 1980s and 1990s for identifying many anti-business and discriminatory laws and drafting amendments to relax or scrap them. This allowed people to start businesses without asking anyone’s permission giving a huge boost to the entrepreneurship being honoured by the Free Market awards. South Africa needs many more entrepreneurs if unemployment is to be defeated and the FMF continues its work in arguing for the lifting of the regulatory and tax burdens on small firms, allowing them greater economic freedom so that those that create more wealth than they consume can flourish. The FMF’s research on comparative economic systems and the causes of prosperity show beyond doubt that free markets are a precondition for achieving high growth, which reduces both unemployment and poverty.

The poverty and underdevelopment of rural areas, such as the Winterveldt, is of great concern. A solution to this problem has to be found. New legislation for the transfer of land ownership to traditional communities and the creation of land rights registers will enable increasing numbers of black South Africans to use their land as a mortgagable and tradable resource and is a step in the right direction. Another possibility is to couple increased agricultural activity in the rural areas with the utilisation of currently unoccupied factory buildings in the former homelands, opening them for occupation by small industrial and commercial ventures.

The FMF has played an important part in the transformation of economic policies in SA during the three decades of its existence. There is a lot more to be done. Dr Motsuenyane congratulated the FMF on its policy work and the award recipients on their outstanding achievements.

Author: Eustace Davie is a Director of the Free Market Foundation. This report on the Free Market Award presentations may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.

Note: An article by Mr Herman Mashaba based on his acceptance speech will be published in due course.

FMF Feature Article/25 May 2004