Rubbish from the small-minded Minister for Small Business

Chris Gibbons

“Foreign business owners in SA’s townships cannot expect to co-exist peacefully with local business owners unless they share their trade secrets,” says Small Business Development Minister Lindiwe Zulu.

That was the astonishing statement which greeted me as I picked up my copy of Business Day this morning, in a story detailing the Minister’s response to the deadly wave of xenophobic looting which has swept a number of townships over the past couple of weeks.

Cabinet ministers of all stripes quite often speak drivel on subjects they know little about, but this is a masterpiece of its kind.

Let’s break it down into two key components.

The first is that a foreign business coming to South Africa should be expected to share trade secrets with local business owners.

Why would that be, Minister Zulu? If my company has spent years developing a product or a process or a technique or – in the case of the Somali traders – building up skills, knowledge and networks of like-minded individuals, why should I be expected to share anything with anyone? It’s called Intellectual Property (IP) and companies go a long way to protect it. There may be commercial advantage to forging local alliances or local licensing deals, but that’s up for negotiation, like any aspect of business.

The second and more worrying aspect of Minister Zulu’s unusually crass statement is that foreign business owners who refuse to obey her command to share “cannot expect to co-exist peacefully”. In other words, if I refuse to divulge my IP, I should expect violence in return, and violence that the South African government, through the words of a cabinet minister, appears to sanction.

Business Day makes the point quite forcefully that this stance is in direct contradiction to the message conveyed by President Zuma at Davos. There he was at pains to depict South Africa as a safe and welcoming place in which to do business. Or perhaps this only applies to giant multinationals building (or trying to build) power stations and suchlike? Smaller businesses would be expected to divulge trade secrets or face violence – is that the way the ANC actually thinks?

Inevitably, Minister Zulu also played the apartheid card, suggesting – and again I quote from Business Day – that “local business owners had been marginalised and been offered poor education and a lack of opportunities under apartheid.”

In many circumstances, she would be justified. Even though the ANC has been in power for 20 years, the structural effects of racial segregation remain deep-seated. At stretch, we might even be able to ignore the government’s criminal mismanagement of the education system and blame that on apartheid, too.

But not in this case.

The mainly Somali, but also Pakistani and Bangladeshi, traders who run many of the looted township spazas are almost always themselves victims of violence, oppression, racial discrimination and negligible education. In many instances, their lives have been a great deal worse than the average South African township dweller and certainly with fewer opportunities. Especially the Somalis.

So Minister, to save you any further anguish, allow me to share some of the “trade secrets” enjoyed by these “foreign business owners”: they work incredibly hard; they don’t expect government handouts; they look out for each other, watch each other’s backs and help each other with loans; they don’t expect to become instant millionaires; they do understand business basics, especially the fact that no-one is obliged to buy from them and won’t unless their prices are ultra-competitive; and they don’t whine and continuously blame other people for their lot in life. They just try to get on and do the very best they can.

Secrets, Minister, or just plain common sense?

Chris Gibbons edits Acumen, the recently established magazine of the Gordon Institute of Business Science (GIBS) at the University of Pretoria. With an interest in radio that goes back more than 40 years to when he was 16, Chris also maintains an on-air presence via the Morning Market Report on AlgoaFM (weekdays, 07.15). Previously, he presented The Mid Day Report for Gauteng’s Talk Radio 702 and 567 Cape Talk in the Western Cape. Chris has also worked for the BBC, ABC, NBC and Australia’s Maquarie Network.