Renowned economist says Cyril Ramaphosa has not built one successful business

Efficient Group chief economist Dawie Roodt said President Cyril Ramaphosa became wealthy through black economic empowerment (BEE) deals rather than launching and building successful businesses.

Roodt shared his views during a BizNews interview about Ramaphosa’s recent comments about BEE being the key to economic growth in South Africa.

He said Ramaphosa’s focus on capital, land, and labour resembles the thinking of communist Karl Marx, which is outdated and damaging to a modern economy.

He explained that a modern economy relies on services, which in turn are dependent on specialised skills and technology.

Ramaphosa’s recent comments do not align with the needs of a modern economy, its operation, or what it requires to grow.

“It sounds like the president got his economic training in the 1920s. He sounds like Karl Marx, who thinks economic growth centres around capital,” Roodt said.

He said the government’s empowerment objectives should focus on quality education and skills development, as well as creating a business-friendly environment.

“You need good quality roads, reliable electricity, good railways and trains, good infrastructure, and a safe environment to run a business,” Roodt said.

South Africa has been deindustrialising and is losing its factories due to a lack of reliable electricity, poor logistics services, and deteriorating infrastructure.

He said the lack of black economic empowerment comes from the ANC government’s poor economic policies, corruption, and incompetence.

Roodt added that the idea that increasing wealth by redistributing it through BEE is entirely misguided.

“Clearly, our president does not understand the importance and essence of a modern economy,” he said.

He stated that currently, capitalists, industrialists, skilled individuals, and wealthy individuals are leaving the country.

“What has been happening over the past fifteen years, with poor economic growth, will continue to happen until we make a U-turn,” he said.

“However, listening to the president and other politicians shows that we are a long way from that U-turn we so urgently need.”

Cyril Ramaphosa has not built any businesses – Dawie Roodt

When Ramaphosa was elected ANC President in December 2017 and became South Africa’s President in February 2018, the business world rejoiced.

They saw Ramaphosa, a billionaire, as a business-friendly leader due to his extensive business background.

He was involved in various companies, including the Shanduka Group, and held directorships in prominent firms like Bidvest, MTN, and Mondi.

This experience likely fostered a belief that he would be a more supportive and understanding leader for the business sector.

However, this optimism waned after the government continued to implement business-unfriendly policies, resulting in economic hardship.

Roodt commented on this situation, saying he could not think of one business Ramaphosa started and built that created his wealth.

Typically, it was easy to identify the businesses that other wealthy individuals had established, which contributed to their wealth. However, in Ramaphosa’s case, it was not the case.

He referenced Herman Mashaba, who became wealthy by creating the hair product company Black Like Me.

“Mashaba became rich by starting and building his own business. I have much more confidence in him running the economy than Cyril Ramaphosa,” he said.

“Ramaphosa did not start any businesses. He became rich through all kinds of black economic empowerment deals.”