MACOZOMA He says he's trying to transform South Africa's boardrooms the way he helped change its government
South Africa's mining magnates and millionaires have been meeting in the imposing Rand Club in downtown Johannesburg for more than a century. The neo-Baroque building boasts the longest bar in Africa and is filled with paintings of such celebrated past members as British colonizer Cecil Rhodes as well as, of course, the ubiquitous portrait of Queen Elizabeth II. Built on the wealth of the largest goldfield in the world and the sweat of black labor, the club's membership was, until a few years ago, closed to South Africa's blacks. But these days, there's a new breed of tycoon walking the club's wood-paneled corridors and sipping whiskey in its stuffed leather chairs. A black élite has crossed over from politics and the ruling African National Congress (A.N.C.): Rand Club members over the past few years have included Cyril Ramaphosa, 52, one of South Africa's richest men, who was once touted as a possible successor to Nelson Mandela, and Tokyo Sexwale, also 52, another politician turned capitalist.
The two men with gold-mining magnate Patrice Motsepe, 43, whose wealth South African newspapers put at more than $500 million, and banking and media tycoon Saki Macozoma, 47 form a quartet of rich, well-connected black businessmen who symbolize South Africa's new corporate élite. Although they work separately, Macozoma, Motsepe, Ramaphosa and Sexwale have been dubbed the Fabulous Four for their growing power and wealth, and between them, they have more than a billion dollars' worth of interests in some of South Africa's largest companies, including mining heavyweights Harmony Gold and Gold Fields, life insurer Sanlam, Alexander Forbes Financial Services as well as banking giants ABSA and Standard Bank. The men are also buying playthings. Motsepe owns the Mamelodi Sundowns, one of South Africa's most successful soccer teams. Sexwale, who bought the Oude Kelder winery outside Cape Town in 2002, sponsors the national soccer league and is financing a South African entry on the A1 Grand Prix circuit. Later this year, he will appear in a South African version of reality TV show The Apprentice, in the Donald Trump role.
Just how the four have reached this rarified level, though, has become a matter of deep controversy in South Africa. Although apartheid is dead a decade and the country is ruled by blacks, whites still dominate the economy and hold most of the wealth. Comprising only 10% of the nation's 45 million people, whites (directly or through equity positions) control 69% of the companies listed on the Johannesburg Stock Exchange; 27% are in foreign hands, and just 4% are controlled by blacks. The imbalance is also pronounced among wage earners. Some 100,000 white South Africans earn more than $60,000 annually; just 5,000 blacks do. While there is some good news according to the South African Advertising and Research Foundation, almost 300,000 blacks became middle-income earners (between $13,000 and $23,000 annually) over the past three years there is still 40% unemployment, which largely hits the black community.
In that context, the rise of the Fab Four is a point of pride for some and a sign of worrisome cronyism to others. The A.N.C.-led government of President Thabo Mbeki has been pushing a policy of black economic empowerment (bee), designed to put more of the economy in black hands, in part by forcing the country's largest industries to set targets for training more black workers, promoting more black managers, using more black-owned suppliers and this is where the controversy comes in selling ownership stakes to black capitalists. Big firms that want to do business with the state must now file a bee scorecard to prove they are promoting "previously disadvantaged individuals," including blacks, mixed-race "coloreds" and Indians. Since government spending is some $20 billion a year, or about 20% of gdp, it's a deal not many companies can afford to pass up.
A handful of prominent and well-connected black South Africans Macozoma, Motsepe, Ramaphosa and Sexwale among them recognized the opportunity that presented. As South Africa's biggest companies rushed to meet their bee requirements, they often turned to the same small group of black capitalists, offering to sell or grant equity stakes at favorable terms, often financed by the companies themselves, in return for connections, expertise and links to the black marketplace. Last year, for instance, Macozoma and Ramaphosa bought, respectively, 1.8% and 1.2% stakes in Standard Bank in a deal financed by the firm. Standard ceo Jacklo Maree said at the time that the men would provide "leadership ... in a rapidly transforming South African banking environment." "We're the forerunners, the role models," says Ramaphosa, who spoke to Time last week. "My wish is that black entrepreneurs should multiply bountifully. The more the merrier."
Ten Years On [April 19, 2004]
A decade after the end of apartheid, South Africa has a spring in its step — and severe problems. What does the future have in store for Mandela's children?
Mandela [April 19, 2004]
What happens to South Africa's revolution after the revolutionary leaves the stage?
The New Elite [April 19, 2004]
Wealthy young buppies enjoy their success
AIDS [April 19, 2004]
Ignorance and inaction allow the disease to flourish
The African Bush [July 13, 2003]
The idea of a trip to Africa had been in George W. Bush's mind since before he took the oath of office. Last week, he finally made it.
Positively Sesame Street [Sep. 22, 2002]
Meet Kami, the world's first HIV-positive Muppet and the latest recruit in South Africa's AIDS war
An African New Deal? [June 10, 2002]
South Africa's Thabo Mbeki is trying to sell a plan to encourage both democracy and investment. It could be Africa's last hope for joining the global economy
Let's Put Africa Back on Track [June 10, 2002]
TIME talks to former A.N.C. activist turned entrepreneur, Tokyo Gabriel Sexwale
Mogadishu at 60 Miles an Hour Arms merchants are once again doing brisk business after a rapid change of power in this tough town, but so far the peace has held
The Year of The Nuke A rundown of the world's nuclear powerhouses, and what to expect in the coming months
premium content
