An interview with Patrice Motsepe
Reported by Sasha Planting
Patrice Motsepe is founder and executive chairman of African Rainbow Minerals, owner of Mamelodi Sundowns football club, and member of The Giving Pledge, which commits participants to giving half their wealth to charitable causes.
Motsepe, an irrepressible Afro- and SA-optimist, was the most in-demand executive at the World Economic Forum, which runs from the June 3 to 5 in Cape Town, and as a result he gave a collective interview to allow media to pose questions to him.
Here is an edited version of the discussion:
Q: We are at the World Economic Forum for Africa. What is your view on the opportunities in Africa at the moment?
A: Africa is no different from many other continents. We need to do the things that create jobs, uplift standards of living, and take us out of poverty. I believe there is a greater recognition [within African governments] that the single most important partner to help realise these dreams is the private sector, with investors. In this regard governments have to stay the course. Look at India, there is a huge amount of excitement among the business community at the reforms that Modi is making. People thought the opportunities were lost.
There are now many African countries that were not attractive to investors but are now exceedingly attractive – Ethiopia, Kenya, Mozambique, Ghana. Companies are wondering where to open their head offices. In South Africa we have to compete. We need to be globally competitive. We have to pull up our socks. If there is a lesson it is that we need to accelerate the fiscal and government policies that attract investment.
Q: What makes you excited about South Africa?
A: The bright spot is definitely the passion I see every day among young black and white South African youth. They make me proud. We have challenges, but they are excited about their future and their contribution to growth in the long term. We have lots of work to do in many areas, but I’m confident we can do it.
Q: What is your view on the new mining bill and the debate about broad-based BEE?
A: Let me start by answering in terms of principles. What is certain is that we need a regulatory environment that is good for business and creates certainty.
More specifically, on BEE, you cannot return to an era, as we had after colonialism ended, where the elite in a society and their families were the only ones to benefit, while the rest of the population went backwards. That was and is a recipe for long-term political and social instability.
The idea behind meaningful black participation in the economy was driven by the desire to create a substantial middle class – both black and white. In order to achieve this one needs to ensure that blacks are stakeholders in the economy. Broad based empowerment is positive as it ensures that we spread the opportunities, on the downside is the fact that it doesn’t allow for capital accumulation.
There are lessons in this from the Afrikaner community. They recognised that the growth and success of their families was linked to growth and success of communities around them.
We have no future – forget empowerment and black and white issues – if we don’t create opportunities for as many of our people as possible.
But what BEE was supposed to do was help to create entrepreneurs. Your colour should be irrelevant in terms of competitiveness and innovation and participation. I would like to see more focus on entrepreneurship and competitiveness overall. There will be black business people who need help and we need the structures to help them.
Q: What is your view on the once empowered always-empowered stance?
A: There are sensitive discussions under way. We can spend the whole day discussing this because it’s a complex issue that can’t be dealt with in two minutes. Personally I always would like to see the black shareholders continue to be shareholders after the sunset period. The heart of empowerment is to give those that didn’t have a stake a stake in business and the economy. We have involved 1000s of shareholders and I can tell you stories about many of them. While I feel that way, you also can’t tell a teacher who desperately needs that money that she cannot sell her shares. We knew the behavior and conduct of the market might be out of line with what we are trying to do to help our people.
Q: How can business and government draw closer to one another?
A: I tend to believe that business is much more effective (in its communication with government) when we close the door and talk to each other. If you shout from the rooftops government gets defensive, even over stuff they recognize as wrong.
Q: How we can change mining from a sunset industry to a sunrise industry in SA – specifically how we can encourage exploration and investment?
A: The whole industry needs a fundamental review and new dispensation. We need the industry, government and labour to come together. I admire the German system, which has involved labour as a partner to industry. At heart of this must be inclusive and shared growth. We need to include the needs of our stakeholders as well as of our shareholders in London and New York. If they don’t earn a return and if they don’t believe this is a good place to invest, then I don’t have an industry. South Africa does not have a monopoly on minerals – there are many other places to invest. But I remain optimistic, this is a long-term industry and while commodities may be in a slump at the moment, the cycle will turn.
Q: Are you likely to enter into politics?
A: I think I can make a greater contribution as an individual, and us together as a family can make a contribution, by continuing to try to bring people together, and sometimes by saying things that are inappropriate and incorrect.
There is so much opportunity in this country for all of its people, but we have to focus on the poor.
Q: What do you think about Fifa and the allegations that SA has paid a bribe to win the right to host the 2010 World Cup?
A: I tend not to express an opinion until I know all the facts. I will say two things – you are innocent until you are proven guilty, and we have to be seen to be a country that adheres to global best practices.
Q: What do you think about e-Tolls?
A: Answering this question may create some troubles down the line because people will think I sided with this one or that one. However my father, who was an entrepreneur – as my grandfather was before him – my father taught me that the customer is always right. So as an extension of this, I assume the voter is always right!