The Covid-19 pandemic has dealt Black-owned businesses a tough hand. Stifled by stay-at-home orders, on-again off-again store closures and stricter limits occupancy limits, many businesses are struggling to outlast the seemingly unending virus outbreak.&nbsp;



Although they’ve&nbsp;<a href="https://www.washingtonpost.com/business/on-small-business/us-black-owned-firms-make-surprise-comeback-to-pre-covid-level/2020/10/28/be1e3100-194b-11eb-8bda-814ca56e138b_story.html" target="_blank" rel="noreferrer noopener">rebounded</a>&nbsp;slightly in recent months, Black-owned stores have experienced the greatest decline this year, plummeting from 1.1 million businesses in February to 640,000 in April—a&nbsp;<a href="https://siepr.stanford.edu/sites/default/files/publications/20-022.pdf" target="_blank" rel="noreferrer noopener">41% drop</a>.



But spurred by a national movement to support Black businesses, which kicked off this summer, a new number of corporations are taking small steps to put the Black in Black Friday.



Black Friday online sales pulled in a record $7.4 billion in 2019— the second largest online shopping day ever and a 19.6% increase over the previous year—while the holiday season overall generated more than $72 billion in online sales, according to&nbsp;<a href="https://blog.adobe.com/en/publish/2019/12/02/adobe-data-shows-record-cyber-monday-with-9-2-billion-in-online-sales.html#gs.lqxvdv" target="_blank" rel="noreferrer noopener">Adobe Analytics</a>. Online sales for this Black Friday are projected to generate&nbsp;<a href="https://www.adobe.com/content/dam/www/us/en/adi/2020/pdfs/Adobe_Holiday_Forecast_Press.pdf" target="_blank" rel="noreferrer noopener">$10.3 billion</a>.



The surge in digital spending over the holiday season and the heightened visibility that’s been awarded to small businesses through corporate sponsorships could have a considerable impact on Black businesses in particular, sustaining them through the a few more months of the pandemic.



Facebook, for one, launched its #<a href="https://about.fb.com/giftguide/" target="_blank" rel="noreferrer noopener">BuyBlackFriday initiative</a>&nbsp;and a corresponding toolkit and gift guide in October as part of a broader three-month campaign to buttress small businesses during the holiday season.



The gift guide features products from Black-owned businesses and was curated alongside the U.S. Black Chambers and several corporate partners.&nbsp;



“Black-owned businesses have been hit especially hard by the pandemic, closing at twice the rate of other small businesses,” Facebook COO Sheryl Sandberg wrote in a blog post announcing the initiative. She added, “But we know that millions of people want to help.”



The campaign runs through Black Friday on November 27, a symbolic starting gun for the holiday shopping season.



More recently, Google partnered with Grammy-winning musician Wyclef Jean and the U.S. Black Chambers to promote its&nbsp;<a href="https://smallbusiness.withgoogle.com/blackowned#!/" target="_blank" rel="noreferrer noopener">#BlackOwnedFriday</a>&nbsp;campaign, an effort to make November 27 “Black-owned Friday” and galvanize shoppers to buy Black beyond the Thanksgiving weekend.



The tech giant has also showcased Black-owed businesses on its social platforms since mid-October and now&nbsp;<a href="https://twitter.com/Google/status/1331266675543564292" target="_blank" rel="noreferrer noopener">allows users</a>&nbsp;to find nearby stores that identify as Black-owned through its search engine.



“I’ve seen firsthand the strain and struggle that Black-owned businesses face,” Jean said in a statement. “For many of them, this holiday season will be critical to their survival.”



TikTok, the latest viral social media platform, threw its weight behind Black-owned businesses months after facing&nbsp;<a href="https://www.theverge.com/2020/6/1/21277505/tiktok-black-creators-censorship-algorithm-donation-diversity-council" target="_blank" rel="noreferrer noopener">censorship allegations</a>&nbsp;from Black creatives in June. Earlier this month, the video sharing platform, which has about 200 million monthly active users in the U.S., launched&nbsp;<a href="https://newsroom.tiktok.com/en-us/amplifying-black-owned-businesses-on-tiktok" target="_blank" rel="noreferrer noopener">Support Black Businesses</a>, a digital hub to amplify Black entrepreneurs.&nbsp;



TikTok also announced #ShopBlack, an in-app campaign that allows users to create videos spotlighting their favorite Black-owned businesses or to share their experience as a Black entrepreneur.



As small businesses reel from the pandemic’s economic disruption, many big retailers have had breakaway growth. Amazon’s profits and sales exceeded analysts’ expectations, reporting a 37% sales growth and tripling its third-quarter profits as more shoppers turn to the e-commerce giant during the pandemic.&nbsp;



But celebrities and influencers alike have started to leverage Amazon’s omnipresence to highlight Black sellers on the platform.&nbsp;<a href="https://www.oprahmag.com/style/a34480587/oprah-favorite-things-2020-black-owned-businesses/" target="_blank" rel="noreferrer noopener">Nearly 70%</a>&nbsp;of the products on Oprah Winfrey’s highly anticipated annual list of her favorite things are created by Black-owned or Black-led businesses this year and all are available for purchase on Amazon.



The billionaire media mogul has partnered with Amazon on the list&nbsp;<a href="https://www.marketwatch.com/story/get-your-oprah-on-this-holiday-season-2015-11-05" target="_blank" rel="noreferrer noopener">since 2015</a>&nbsp;and her yearly picks have provided brands with considerable gains in sales since the list’s 1996 advent.



Black Americans have developed a growing presence among small businesses owners and could stand to gain considerable sales from dedicated shopping holidays like Small Business Saturday, which raked in an estimated<a href="https://www.businesswire.com/news/home/20191201005232/en/American-Express%E2%80%99-10th-Annual-Small-Business-Saturday%C2%AE-Hits-a-Record-High-with-an-Estimated-19.6-Billion-in-Reported-Spending" target="_blank" rel="noreferrer noopener">&nbsp;$19.6 billion</a>&nbsp;in 2019. And while physical distancing measures will significantly curb foot traffic this year, more than 112 million Americans visited a small business on that day last year, a record high.



As shoppers increasingly reject winding lines that snake around the store, a trend that’s long been in the making but was exacerbated by the pandemic, they’re also looking to support independent local businesses, providing a potential economic windfall for Black businesses with an online presence this holiday season.



-by Ruth Umoh, Forbes Staff

man in black carrying bags, legs only

Black Businesses Receive Tech Industry Push Ahead Of Holiday Shopping Bonanza

Busi Mabuza was born in Barbeton, a white town in Mpumalanga, South Africa, but grew up in the townships. At the age of 12, she went to a private Catholic boarding school in Limpopo but finished her matric in Pietermaritzburg.
Her nomadic life was just beginning. Hoping to acquire an engineering degree, Mabuza enrolled for it at the University of Natal in South Africa’s KwaZulu-Natal province. However, this did not happen as she didn’t do well in one of the subjects – engineering drawing – mandatory to complete the course. Undeterred, she commenced a degree in mathematics at the University of the North (now the University of Limpopo); she didn’t finish this either due to the state of emergency declared in 1986 by the old South African government. Mabuza was arrested and then banned from all educational institutions.
With nowhere else to go in South Africa, Mabuza moved to Atlanta, United States, where she had to start her mathematics and computer science degree all over. She worked part-time in the computer room and at a systems integration company. Working helped her realize that she didn’t know much about the business world, so she enrolled for an MBA in finance and information systems.
“The lesson that sticks in my mind is how integrated the world is, and that you have to understand every single economy and product in the global context,” says Mabuza.
She says that big business in South Africa knows this while start-ups are inward facing until the businesses grow or face failure.
“Since coming back into the country I’ve had a fair amount of time looking at the investment environment,” she says.
When Mabuza returned to South Africa, she joined Investec Asset Management in Cape Town, where she learnt all about analyzing companies and management strategies.
In the mid to late 1990s, there was a growing trend towards Black Economic Empowerment (BEE) transactions. This meant she had to start looking at non-listed investments too. This required more contact with management to understand the business and was therefore more personal.
Mabuza moved to Johannesburg hoping to be a BEE queen. After a couple of years on her own, a group of women asked her to join the Woman’s Private Equity Fund, later moving on to Ethos Private Equity, where she became a director.
After three years as a board member at the Industrial Development Corporation (IDC), Mabuza’s appointment as chairperson of the board came as somewhat of a shock to her. She was asked if she would stay on for another term on the board but it wasn’t until the Annual General Meeting that Ebrahim Patel, the minister of Economic Development, pulled her aside to let her know of the new responsibility placed on her shoulders.
The development component of the IDC has a personal appeal to Mabuza. She thinks the IDC will have done well if it has a visible impact on the economy through backing more black entrepreneurs to play a meaningful role in the country’s economy and in reigniting manufacturing. The Department of Trade and Industry launched the black industrialist program, which the IDC will support but not be directly involved in.
She also says we need infrastructure that can continue to attract foreign investment and help local businesses to worry less about basic infrastructure.
The IDC is South Africa’s largest development finance institution with a R100 billion ($8.4 billion) plan over the next five years and Mabuza believes the board is a guide, the conscience of the organization and custodian of values. She says the board will advise the good management team in place and make sure they focus on the necessary sectors.
“I’ve had a very interesting career in financial services,” says Mabuza. And it’s a long way from being over.

Busi-Mabuza-037

The Boardroom Queen

It’s the three-letter acronym, with a sting, that few can ignore. BEE—Black Economic Empowerment—is a decade old this year and has rarely been free of controversy.
Questions are being asked about whether BEE has brought more people of color into the South African economy or reached its expiry date.
There are many critics of the ruling African National Congress’ (ANC) policies. They claim that BEE has far from closed the gap between rich and poor, despite South Africa’s solid economic infrastructure and increased social welfare spending. South Africa’s GINI co-efficient numbers—the global measurement of inequality—remain among the highest in the world.
Professor Adam Habib, political commentator and new vice-chancellor of the University of Witwatersrand in Johannesburg, says BEE was never intended to be a policy to bring previously disadvantaged South Africans into the economic mainstream, even though it was presented as such. For him BEE was an exercise in exquisite deception.
“The ANC’s aim was not to deracialize the economy, through investing in small business or entrepreneurs, but a critical decision to deracialize the apex of white business in South Africa, which they did and created a class of capitalistic and parasitic bourgeoisie,” says Habib.
Habib uses the word “parasitic” because he says the BEE super elite have not created new business, promoted Greenfield projects or stimulated job creation or entrepreneurship that’s sustainable or meaningful.
“The irony is, it’s easier to get a tender worth R250 million ($25 million) than it is to get R25,000 ($2,500) to start a small business,” he says.
Habib says, the policy needs a complete overhaul. As he puts it: “Pigmentation becomes a tradable commodity in South Africa.”
His three checkboxes to justify BEE are: for small business development to be prioritized; a “one bite at the cherry” clause to apply for those who benefit from BEE deals; and firm action to stimulate new enterprise.
Moeletsi Mbeki is less confident that there is anything worth salvaging from the policy enacted during his brother, Thabo Mbeki’s, presidential tenure. He says BEE has not benefitted the majority of South Africans, black or white.
“In the 10 years of BEE, what we’ve learnt was that it was an important device to create an economic oligarchy for the politically connected, which was always the aim. The majority of South Africans, black or whites, are no better off because of policies like BEE or affirmative action,” says Mbeki.
“The ANC needs BEE to continue to perpetuate the illusion that everyone can enter into this circle of wealth.”
BEE has come with a complex system of scorecards, codes and charters that cut across two broad aims of skills development and employment equity. It is broken down into additional categories and indicators so government can assess companies for BEE compliance.
The ANC’s man on economic transformation is Enoch Gondongwana, who failed to respond to FORBES AFRICA’s requests for comment.
The party’s secretary general, Gwede Mantashe, has criticized BEE, saying he has “serious grievances with BEE focusing on shareholding rather helping beneficiaries gain a deeper understanding of business”.
Mantashe has slated a lack of transformation, saying the new breed of black CEOs is mere window dressing. He has also criticized growing wastage as BEE companies use the state as a cash cow, by providing poor quality goods at inflated prices.
The Black Management Forum (BMF) disagrees and says BEE has to continue because it serves the country’s growth and development needs.
“BEE is a moral initiative to redress the wrongs of the past. It’s also a pragmatic growth strategy that aims to realize the country’s full economic potential, while helping to bring the black majority into the economic mainstream. Given the fact that the economy has not transformed to encourage participation, which reflects the demographics of South Africa, makes talk of a ‘sunset clause’ irrelevant and premature,” says Rowena Baird of BMF.
Baird argues that BEE is not a racially divisive policy because its aim is not to take wealth from one group to give to another.
There are lessons from countries such as Malaysia that embarked on a 20-year-long National Economic Policy (NEP) in 1970. It was meant to eradicate poverty and restructure society, to eliminate the identification of race in economic life. It promoted affirmative action in favor of Malays but also had the effect of pushing Chinese economic, educational and cultural life to society’s periphery, leading many Chinese to feel like second-class citizens.
For Mamphela Ramphele, former managing director of the World Bank and leader of new political party Agang, the Malaysian story should be a warning to South Africa that making citizens feel alienated is a recipe for disaster.
“BEE can only work if it has real intentions to redress the legacy of the past that systematically disadvantaged black people,” she says.
Ramphele says that more structured programs need to be in place. She says well planned employee share schemes can mean money in the pockets of a wider range of previously disadvantaged individuals.
The South African Institute of Race Relations (SAIRR) says racial inequality has been declining, but it’s not because of the post-apartheid policies.
Anthea Jeffrey, head of special research at the SAIRR, says: “Such inequality has been declining steadily since 1970 and started under the Nationalist Party.”
Factors she cites include rising skills, unionization, and better paid jobs for Africans.
“Redistribution via the budget has played a vital part; 16 million people are now on social grants. The government also provides free RDP houses, free schooling in 60 percent of schools, free healthcare to many, and free basic water and electricity to the indigent. In addition, public sector employment has been steadily expanding, while average wages in the public sector, where Africans predominate, outstrip those in the private sector by around 40 percent,” she says.
“Despite its evident successes, racial inequality remains stark. The poor are far from being content as rising social and labor unrest makes clear. The number one aspiration of adults living in relative poverty is to get a job,” says Jeffrey.
Unequal skills and a lack of opportunity divide; makes policies like BEE and employment equity irrelevant to the poor because legislation doesn’t bring them in from the cold.

Tag: Black Economic Empowerment

FORBES AFRICA SOCIAL MEDIA

Black Businesses Receive Tech Industry Push Ahead Of Holiday Shopping Bonanza

The Boardroom Queen

Paragons Or Parasites?