The African economic ethic of indigenisation is understood to share the same fundamental precepts and is regarded as the same thing as some economic and social approaches such as
‘Africanisation’, ‘Nationalisation’, ‘Affirmative action’ and ‘empowerment’ (Murove, 2010:1).
In the broad sense, indigenisation is not unique to Africa. Similar practices with similar or identical spirit and intentions have been observed the world over even though different terms are used. Indigenisation has also been described by such terms as positive discrimination and was observed in Canada where it is called employment equity, in India and Napal where it is called reservation, in the United Kingdom where it is called positive action, and in Malaysia and Sri Lanka where it is called affirmative action (Jauch, 1998:1-12). In the United States of America, the term ‘affirmative action’, which is essentially the same as indigenisation, was used for the first time in the Executive Order Number 10925 which was signed by President John F Kennedy of the USA in March 1961.
In Africa, indigenisation seeks to correct economic imbalances inherited by African countries from their colonial past. It also seeks to enable greater control and ownership of resources and broader economic participation by the previously marginalised black African people in their national economies. This was after the realisation that in the post-colonial African states high levels of poverty were common. These levels of poverty were attributed to the systematic marginalisation and discrimination of the black people in favour of the minority whites. The attainment of political independence in the form of majority rule did not bring wealth to the black people. Instead, on the economic front the opposite was true with the minority whites controlling a far larger share of the economy. Black entrepreneurs or African capitalists were very limited compared to their white counterparts and the ratios did not match the racial proportions of blacks
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and whites in the population (Mazrui, 1986:215; Murove, 2010: 52; Hobden and Jones, 2011:133-136).
Indigenisation was introduced in almost all SADC countries as a deliberate policy to correct the socio-economic inequalities which were introduced by deliberate colonial policies, laws and strategies. Indigenisation was by implication designed to promote indigenous entrepreneurs and develop African capitalists who could help in the development of the African economies.
Without deliberate measures, the emergence of African capitalist players of repute in the economies was near impossible because of unfair colonial policies, strategies and laws. To that end, in his address at Howard University on 04 June 1965 but referring to similar previous discrimination in the United States of America, the then President Johnson, of the USA justified the thinking that informed ‘affirmative action’ which still makes sense even in the African context:
Imagine a 100 yard dash in which one of the two runners has his legs shackled together.
He has progressed 10 yards, while the unshackled runner has gone 50 yards. How do they rectify the situation? Do they merely remove the shackles and allow the race to proceed?
Then they could say that ‘equal opportunity now prevailed.’ But one of the runners would still be 40 yards ahead of the other. Would it not be the better part of justice to allow the previously shackled runner to make up the 40 yards gap, or to start the race all over again? That would be affirmative action towards equality (Weiner, 1993:9).
Similar, to Johnson’s explanation, indigenisation can be viewed simply as an ethic of favouring members of a group who suffered some disadvantages as a result of past discrimination or injustice. The different styles of discrimination which were used in the colonial past as well as areas in which discrimination was done gives rise to many equally diverse responses aimed at correcting past injustices. These different responses have further led to different indigenisation policies which emphasise and focus on defined areas and issues. For most of the SADC countries, past discrimination in areas such as participation in mainstream economic activities, education and employment are common. Though there is diversity in the areas of past discrimination and injustice, what is common in the approaches to indigenisation is the desire to
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eliminate disadvantages which were introduced by previous discrimination or injustice and introduce a new environment that offers equal future opportunities.
Post-colonial states argue that indigenisation helps in the compensation for past discrimination, exploitation, or persecution and even addresses existing policy differentials and allows equal opportunities for all. Indigenisation has been regarded as invidious by some critics who argue that it is unjust, unfair and racially divisive, and that it destroys the self-esteem and self-respect of the intended beneficiaries (Boxill and Boxill, 2003: 118).
Boxill and Boxill (2003:118) observed further that arguments in support of indigenisation have either a forward- or backward-looking approach. Forward looking arguments for indigenisation justify the policy on the anticipated future benefits where the present poor majority would be better off in the future, while the backward-looking arguments defend indigenisation or affirmative action on the basis of its ability to compensate those who were affected by the past harmful social, political and economic injustices. Earlier arguments were based on the backward- looking perspective as the intended beneficiaries had strong and credible claims for restitution or compensation for undesirable historical miscarriages of justice. Recent debates however have become increasingly forward looking as the arguments for expected future benefits of such policies are becoming more and more attractive, relevant and compelling with no ugly
accusations which refer to past discrimination or injustice. The futuristic arguments are viewed as more pluralistic
and are more appealing as they present diversity, a fashionable essential element of modern liberal society which is inextricable from the neo-liberal capitalist global economy (Boxill and Boxill, 2003:118).
Backward looking arguments lose credibility on account of their potential to reopen old wounds which further promote divisions. Such arguments tend to pursue compensatory justice as a high priority issue. Justice is regarded as not only the first virtue of ethics in society, but it is perceived as such by most members of society (Boxill and Boxill, 2003:118). Therefore, the backward-looking arguments in support of indigenisation still have relevance from a compensatory justice ethics perspective. The post-colonial SADC states, from inception, faced challenges of poverty and this was attributed to the discriminative colonial policies and strategies
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which restricted the participation of the black people in the mainstream economic activities. This backward-looking argument has been used to justify indigenisation as a policy for compensating the previously marginalised black people. The African states also argue that through indigenisation they will be able to create domestic or indigenous capitalists who will in future help reduce poverty among the black people (Jack and Harris, 2007:5; Jauch, 1998:15). This argument takes a forward-looking approach in support of indigenisation.
This study therefore applied both backward- and forward-looking arguments in analysing the African economic ethic of indigenisation. These ethical debates are discussed in more detail later in this chapter. To make a well-grounded backward-looking analysis it is essential to have a clear understanding of the historical underpinnings from which the current calls for indigenisation were founded on as a way of domesticating capitalism by creating indigenous capitalists in SADC countries.
2.2 African Capitalism and Entrepreneurship in Colonial and Apartheid South Africa