Cyril Ramaphosa and the Economy of Black South Africa

Twenty-three years after independence, it is telling that the ANC’s new President Cyril Ramaphosa is believed to be the second wealthiest black person in South Africa. His wealth is estimated to be just $700 million, while South Africa’s 14 richest (mostly white) have a combined net worth of $28.79 billion, and an average net worth of $2.06 billion.

Many western news outlets hail him as a leader who will bring order and grow the economy because he is known to be sympathetic to the current economic status quo that leaves many black South Africans still in poverty. However, he is the lesser devil when compared to Nkosazana Dhlamini-Zuma whose only notable accomplishment would probably be the increase in the number of NGOs in South Africa. With Ramaphosa, his understanding of business may help black South Africans to invest in economic opportunities.

The Ramaphosa of 2017 is NOT the one who studied law at the then University of the North (Turfloop), where he became active in the South African Students Organization, a group aligned to black consciousness ideology espoused by Steve Biko. During that time, he became active in the University Student Christian Movement, which was steeped in the liberation black theology of the black consciousness movement. He is also NOT the same trade unionist who went on to serve articles and join the Council of Trade Unions of South Africa, which was to form the National Union of Mineworkers (NUM). He is NOT the same person who helped build the NUM into the largest trade union in the country, serving as its secretary-general for just over 10 years.

73% of land suitable for agriculture is still owned by whites.

It is estimated that only 10% of the Johannesburg Stock Exchange (JSE)’s top 100 are held directly by black people and 13% is held indirectly by black people (through individuals contributing to pension funds, unit trusts and life policies”)

Only 0.6% of the investments on JSE are directly managed by black people.

Black South Africans remain heavily under-represented in the skilled jobs market.

The Ramaphosa elected in 2017, will serve the interests of those who already control a substantial part of the economy, leaving the future of many black South Africans still uncertain. Land resettlement in South Africa is taking place at a snail’s pace, the cost of education continues to rise and most businesses and mines continue to be controlled by foreigners.

SHANDUKA INVESTMENTS

Most of the wealth Cyril Ramaphosa acquired in the last 15 years, first came through the investment firm, Shanduka which he started in 2001. Cyril Ramaphosa and partner Phuthuma Nhleko and a group of investors founded the large investment holding company which has interests in oil, gas, minerals, mineral resources, metals and infrastructure related (including in respect of and / or in connection with construction, construction materials and / or the like) sectors in Africa.

After becoming Deputy President Cyril Ramaphosa divested a 30% share in the Shanduka Group to investment group Phembani, led by MTN Chairman Phuthuma Nhleko. Nhleko is reportedly the fifth richest black person, with assets worth around $142 million (R1,7 billion). He also created a blind trust and will be holding onto his property investments as well as investments in the McDonald’s franchise.

In November 2017, Shanduka Group was listed in the Paradise Papers as one of the few South African companies engaged with Investec to seek advisory on dodging taxes on profits made from an energy deal in Mozambique by offshoring money to Mauritius

After leaving politics and going into business, Ramaphosa was elected into various Executive and Non-Executive positions on the largest firms listed on the JSE. He has held position and been involved with companies such as Glencore, Lonmin, SEACOM, Bidvest, MTN, Macsteel Holdings, Alexander Forbes and Standard Bank, SAB Miller, Coca-Cola, Unilever.