“You can’t trust the white men any more,” says South African businessman Peter Vundla. “They’ve been behaving badly for years. This is why the country needs a set of rules that tells white business, ‘This is how you need to behave’.”

Mr Vundla’s bluntness is symptomatic of a growing impatience among black South Africans at the slow pace of economic change in a country still bedevilled by large wealth disparities between black and white. More than 12 years after the African National Congress took political power, big business still remains largely in white hands, with just over 3 per cent of the market capitilisation of the Johannesburg stock exchange owned directly by black South Africans.

“We have this very thin band of very rich people and a very thick band of very poor people,” says Mr Vundla. “This isn’t sustainable.”

Frustration over this paltry progress has been mounting and over the past 12 months has found a voice in the form of an active lobby, of which Mr Vundla is part, which has taken its case as high as President Thabo Mbeki’s office.

The message to Mr Mbeki has been unequivocal. “The process of drawing black people in to the mainstream economy is going much too slowly,” says Mr Vundla. “We have been spectators up until now. We need to be participants.”

The attempt to influence government policy - and Mr Mbeki’s willingness to listen - has been driven by another factor: growing unease about the way in which the government’s flagship policy of black economic empowerment - the final details of which were released just before Christmas - is being seen as benefiting only a handful of people, many with strong political connections.

The number of deals between established white companies and black entities worth billions of rands has proliferated since government first set out its black economic empowerment policy, but many of these have involved well-established black businessmen.

The government is aware that it is in danger of alienating the poor, its largest constituency. “We need to move away from narrow-based black economic empowerment. There has to be a meaningful transfer of wealth into black hands,” says Polo Radebe, director general in charge of empowerment policy in the Department of Trade and Industry.

Many blame the early formulation of the policy. Under the draft codes devised by government in 2005, companies gained points for including black participants in seven areas of activity, from selling equity stakes to hiring more black managers.

But in the view of many, too much emphasis was placed on selling equity to black business people, a policy that resulted in a small group of individuals becoming exceptionally wealthy while the majority of black South Africans remain poor. “In the past it was all about selling an equity stake. But government has realised that the only people who can play in that space are the elite,” says Jimmy Manyi, president of the Black Management Forum.

Thrashing out a policy to change the status quo has been difficult. Members of Mr Mbeki’s cabinet, notably Trevor Manuel, finance minister, have been mindful that aggressive regulation can slow down economic growth and that well-intentioned policies can produce unintended consequences. Others, such as the trade and industry minister Mr Mandisi Mpahlwa, have been keen to satisfy the demands of the black lobby.

“There was a real tussle in cabinet,” says a leading businessman. “They had to strike a balance and realise there had to be a bit of give and take.”

The final set of codes is a compromise intended to change the emphasis to affect a broader cross-section of black business by rewarding companies that assist the development of black enterprises, the promotion of black managers, the hiring of black staff and spending on social projects.

Other notable changes were the exclusion of all small businesses from compliance as well as an exemption for foreign companies from having to sell a stake in their local subsidiaries to black partners.

The latest codes are unlikely to take the sting out of the debate. Many believe that government has embarked on a complex system that will burden companies with red tape and stifle competitiveness.

“We have been given a much simpler set of codes to what we saw 18 months ago,” says one foreign businessmen. ”But there are more hoops and loops and I don’t think we are out of the woods yet in creating an environment to attract foreign investors.”

Mr Vundla is unsympathetic to this view. He believes that the objectives of economic growth and black economic empowerment make a virtuous circle. “You can’t have strong growth if the majority of the people in the country are excluded from the economy. We have been part of it only as labourers and consumers. We need a bigger stake.”

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