23/05/2017 05:47 SAST | Updated 23/05/2017 10:04 SAST

Behind The Busa And Black Business Council Split

The bigger body, Business Unity SA, had had enough of the Black Business Council going rogue in meetings

Dr. Danisa Baloyi, Executive Director of the National Black Business Caucus, South Africa.

Different approaches to South Africa's downgrade to junk, to strengthened money laundering rules and to former finance minister Pravin Gordhan caused the very public business divorce on Monday, say business insiders.

Divorce papers were served on May 11 when Business Unity South Africa (Busa) told the Black Business Council (BBC) it would no longer share seats at the National Economic Development and Labour Council (Nedlac), the council where economic policy is negotiated among labour, government, business and civil society.

On Monday, the BBC issued a smouldering press statement headlined "The Black Business Council will not extend the olive branch to white business forever". This followed a Nedlac meeting last week where a BBC representative was ejected from a meeting on the Critical Infrastructure Bill for not having standing to be there. This was the equivalent of arriving at your marital home and finding your spouse has changed the keys.

Busa is a sectoral business umbrella body that represents a diverse set of members from the banks, to casinos and the tourism industry. Busa's leadership is comprised of four whites and four blacks. The Black Business Council is an all black umbrella body of major black business organisations.

Busa and the BBC have shared the business seats at the negotiating chamber for 23 years. But the bigger body, Busa, had had enough of the BBC going rogue in meetings, said a source.

Busa's most powerful member, Business Leadership South Africa (BLSA), has taken a more muscular approach to political risk. Busa opposed the removal of Gordhan from office and also warned that the investment rating downgrade was bad news. The BBC regarded the downgrade as less serious. BBC president Danisa Baloyi also expressed public annoyance at Gordhan's CEO Initiative to bring business into a social pact; she felt that President Jacob Zuma's presidential working group on business was sufficient.

The two organisations also took different positions on the Financial Intelligence Centre Amendment (FICA) bill with the BBC threatening to take the beefed up anti-money laundering laws to the Constitutional Court. The organisation later welcomed the passage of the Fica amendment.

In February, the BBC took a very different approach to Busa's when Gordhan presented the national budget to Nedlac. The BBC complained that the budget did not flesh out or sufficiently fund radical economic transformation.

Busa said it triggered the divorce with the BBC because of an irretrievable breakdown. "It was informed by recent developments at Nedlac where it became apparent the parties were not aligned in relation to key issues facing the economy. Such issues included the impact of the downgrade and on matters of monetary policy, as well as the appropriate way to address those issues," said the organisation in a statement.

The BBC said it was disappointed that Busa had shattered a working unity.

"In the past black and white business worked tirelessly to achieve a consensus on matters pertaining to the successes of business even when they were representing different constituents: monopoly capital on the one side and black entrepreneurs on the other side."

The BBC is likely to apply for its own representation at Nedlac.