A businessman passes a sign at the entrance to the Johannesburg Stock Exchange in South Africa. The JSE is ranked among the top 20 largest stock exchanges in the world with a $1tn market capitalisation, including giant listings such as Anglo American, BHP Billiton and Sasol.


AFP/Johannesburg


Black empowerment in South Africa is not just a struggle for jobs, land, houses and education, share-ownership is now at the centre of a fierce debate over who owns what on the Johannesburg Stock Exchange (JSE).
President Jacob Zuma waded into the dispute last month, saying the country’s black majority owned just three% of the stock exchange and pledging to “de-racialise the economy”.
Zuma’s office was forced to defend their figures after the Johannesburg Stock Exchange (JSE) said that black shareholding in the top-100 index companies actually stood at 23%.
According to the JSE’s own figures, about 10% of shares were black-owned via direct ownership and 13% indirectly-held through unit trusts and pension funds.
Whites owned 22%, with foreign investors at 39%, and the remainder of shares not yet analysed but “likely to include a mix of shareholder demographics, including black South Africans”, the JSE said.
The dispute over black share-ownership has emerged as another thorny issue in the sluggish economic transformation of South Africa, where whites still hold the reins of financial power 21 years after the end of apartheid.
“Black ownership is important because it is one indicator of transformation of the economy,” said Stuart Theobald, a financial analyst at Leriba, a London-based consultancy specialising in Africa.
“At the end of apartheid, there was obviously a massive skew in economic resources in favour of white people. That skew needs to be addressed,” he said.
“Ownership is one way of seeing if we have made any progress.”
Different measures to calculate black share-ownership have only complicated analysis of the problem.
Zuma’s 3% figure came from the National Empowerment Fund (NEF), which calculated direct black ownership, while the JSE’s own figures included indirect ownership via the unit trusts and pension funds that hold nearly 90% of all black-owned shares.
For example, the Government Employee Pension Scheme, representing mostly black employees, is one of the largest investors on the exchange.
“The passive-shareholding methodology is... not a true indication of the level of transformation in the country,” said NEF chief executive Philisiwe Mthethwa in a statement.
The JSE is ranked among the top 20 largest stock exchanges in the world with a $1tn market capitalisation, including giant listings such as Anglo American, BHP Billiton and Sasol.
Some of the major companies have allocated a percentage of their shares to black investors as part of the government’s Black Economic Empowerment (BEE) policy.
But the policy has been criticised for only enriching some politically-connected individuals, further widening the wealth gap and creating a new elite.
The policy created by the ruling African National Congress was aimed at reversing the apartheid era economic imbalances by allowing private companies to sell a portion of their shares to black-owned enterprises.  
The Shanduka Group, whose holdings include energy, resources and food, is owned by ANC heavyweight and Deputy President Cyril Ramaphosa and is an example of a company that has benefited from BEE. Ramaphosa stepped down as executive chairman when he took office.
The JSE appeared unfazed over its clash with the president. In an interview with CNBC, JSE chief executive Nicky Newton-King described the shareholder figures collected over the last three years “as a positive step towards the transformation of our economy.”
“The shareholder analysis over this period demonstrates that economic transformation is taking place,” she said. South Africa’s racially-skewed wealth distribution is not only limited to the JSE.
A report last year by the Commission for Employment Equity showed 62.7% of top management positions were held by whites, with blacks at 19.8%. Data from the 2011 census also indicated that the income of white South Africans was nearly six times that of blacks, who make up 80% of the population.
Douglas Taylor, an economist from the University of the Witwatersrand, urged politicians not to focus on black share-ownership as a genuine measure of progress.
“The issue is whether black people have an opportunity to share in the growth in wealth,” he said. “No policy can increase black wealth if the black people have no money.”