The Color Of Money Is Starting To Change

Nthato Motlana, Vusi Khanyile, and Saki Macozoma once were in the headlines as prominent antiapartheid activists. Today, they're making a different kind of news: They're part of a new breed of South African blacks setting up businesses and signing joint ventures with foreigners. Macozoma and his partners, for example, announced a deal in February with Reebok International Ltd. to distribute and eventually manufacture Ree-bok apparel. Says Macozoma: "These deals offer black businessmen a rare opportunity."

As millions of South African blacks prepare to vote for the first time in late April, these entrepreneurs are part of the slow but sure tran-sition from a predominantly white-controlled economy to a more multiracial one. With no more than 2% of the $210 billion capitalization on the Johannesburg Stock Exchange in black hands, the recent spate of deals represents a small beginning.

BIGGEST PUSH. While some black-led consortiums have begun to buy up business stakes, the more common route to black ownership so far is through joint-venture deals with foreign, mostly U.S., corporations seeking to reestablish a presence in the country they left in the tumultuous 1980s. Digital Equipment Corp. returned to Johannesburg last year to sell workstations. Apple Computer Inc. is in the process of setting up a sales office with some black partners.

The biggest push is toward deals in consumer goods. First, Nike Inc. announced it was contracting with a Soweto-based business group to produce leisurewear and distribute footwear through 400 outlets in South Africa in a deal worth $6 million. Then came the Reebok deal. Although the initial capital injection is just a little more than $1 million, the new partners see scope for rapid expansion and even manufacturing, creating as many as 450 jobs.

A few local deals are stirring up controversy, however. Thebe Investment Corp., headed by Vusi Khanyile, former head of the African National Congress finance division, was established by a trust fund headed by Nelson Mandela and other senior ANC leaders. Critics charge that it is unfairly dominating the shift to black entrepreneurship, first with an educational-publishing deal with Macmillan Boleswa, a Swaziland-based Macmillan unit that had a lock on the schoolbook market in much of southern Africa. Thebe received 25% of equity in the company in return, it seemed to critics, for little more than a channel of communication to the ANC's education honchos.

Subsequent Thebe deals haven't quieted fears that its main strategy is to enter spheres where government licensing is required. Already, it plans to take over from South African Airways, the state-owned airline, in partnership with a group led by the former CEO of Canada's Air Ontario. And it's getting a foothold in one of the two lucrative cellular phone networks scheduled to start Mar. 31.

Khanyile says Thebe's goal is to advance black economic empowerment and that opposition to Thebe is orchestrated by political opponents. But Mandela has personally acknowledged the problem, telling businesspeople at an election campaign meeting recently that the ANC was seriously contemplating breaking its links with Thebe soon.

MEANINGLESS? Other black business ventures, though, are straightforward deals. One of the more visionary initiatives has been launched by Donald Ncube, head of industrial relations at Anglo-American Corp., the country's largest conglomerate. Ncube is forming a consortium of black businesspeople to buy a $50 million majority stake in African Life, an insurance company formerly owned by an Anglo unit, that mainly serves the black community. He's financing the deal by mobilizing the black savings pool. Black-dominated churches are also involved with their substantial funds.

Ncube insists that his purpose is more than merely accumulating capital. Black economic power in South Africa will be meaningless if confined to just a few, he says. Rather, the African Life deal is designed to spread wealth. As the country begins to make its transition to a non-

racial democracy, Ncube argues, it will be crucial to address questions of economic democracy as well. If not, "it's a recipe for revolution." With expectations among South Africa's blacks rising, Ncube and his counterparts are working against time.


ANGLO-AMERICAN, South Africa's biggest conglomerate, has spun off African Life to a former executive, who is partly backed by trade-union pension funds

INDEPENDENT NEWSPAPERS, in Dublin, Ireland, bought the Argus media group, which spun off the Sowetan to black investors

NIKE has a joint venture with a black business group to distribute footware and make clothing under license

REEBOK INTERNATIONAL'S joint venture with a black investor group involves distribution and eventually apparel production

SANLAM, a key Afrikaner business, sold Met Life to black investors


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