Opening door for blacks into economy

Thursday, June 30, 2016

By Minister of Communications Faith Muthambi

The transformation of the country’s R124 billion revenue marketing, advertising and media sector is imperative, given the strong influence it has on the aspirations and values of many South Africans.

In guiding the sector to be more reflective of our country’s diversity, the government has gazetted the Marketing, Advertising and Communications (MAC) Sector B-BBEE Codes of Good Practice.  

The codes are in line with our commitments to transform the economy, broaden ownership, and create jobs. The government has since 1994 taken active steps to fundamentally change the economic landscape.

Our work is guided by the Constitution to create a society that has equal opportunities across all areas. The Constitution emphasises that South Africa belongs to all who live in it, united in our diversity.

Our transformation initiatives allow for new players into the economy by deracialising ownership. It opens up more opportunities for black people, women and the youth and promotes new black enterprises.

The ground-breaking MAC Sector Codes - a collective effort of industry organisations and professional-aims to increase black ownership to 45 percent by the end of March 2018.

In striving to reach this target government is certain that it will bring about change in diversity for the sector. The industry is often described as a white male-owned and managed sector, not in keeping with our aspirations for gender, race and generational diversity.

While the Marketing, Advertising and Communications industry has recorded some progress in transformation, at an ownership and management level this change has been limited.

An analysis of the country’s top advertising agencies by revenue of over R50 million shows that there are strikingly no blacked owned-businesses. When extended to include agencies with revenue above R5 million only two have a B-BBEE level 1. The majority of top agencies in terms of revenue have a B-BBEE level of 3 and above.

The MAC Sector Charter will open up the industry to more South Africans and grow the sector’s talent base. This will encourage a more vibrant sector that is more in tune with a South African perspective that is cognisant of our place in Africa and the world.

The codes fosters creativity and promote the expression of a proud local identity.

Importantly, increased shareholding and management by South Africans in local marketing, advertising and communications companies will result in a greater share of profits being kept in the country and reinvested into the industry. The codes will also stimulate greater competition within the industry.

Government will use its sizeable spending in the advertising and communication space to support the implementation of the codes. Through the State Owned Enterprises Communicators Association representing our 700 entities and agencies, we will begin a process to affirm compliant companies through the communications supply chain. We encourage companies that want to do business with the government and its entities to meet the codes commitments.

We are confident this will give the MAC Sector charter the push they requires to be implemented. Furthermore, it will pave the way to reach the ambitious transformation targets of greater participation of women and youth.

The codes set clear targets to grow the representation of black South Africans in the industry, particularly that of women at executive, senior and middle management levels.  

It stipulates that black females should hold 25 percent of executive board positions and 30 percent of executive and senior management positions.

To realise the changes the sector wants to see, the codes commitment must be fully implemented. Businesses in the sector are encouraged to align their transformation plans to that of the adopted codes.

This begins with inculcating its five founding values of inclusivity and diversity, the soul of the nation, respect and human dignity, sensitivity to people’s needs and responsible creativity into all aspects of work.

We encourage business to commit to broad-based ownership through community and employee ownership schemes and in supporting the careers of aspiring black South Africans.

The codes commitments apply to all South African businesses that derive more than 50 percent of their turnover from advertising, public relations and communications services.

Companies have a two-year window period that started on April 1 to deliver against their business’ transformation plans. They will then be required to submit themselves for annual verification against the new codes.