Black empowerment laws not enough for lasting success

Lawyer Sisa Namandje's remarks at the recent John Akapandi Endjala Memorial Lecture in Windhoek have reignited the debate around black economic empowerment – and reopened a far more uncomfortable conversation that has largely been avoided for years.

Why do so many businesses built through empowerment opportunities still struggle to survive beyond founders, contracts, political cycles and sudden wealth?

Namibia has had empowerment-driven interventions for years, ranging from affirmative action and SME financing schemes to TIPEEG and procurement preferences.

Yet despite these interventions, many black-owned businesses continue to face the same structural patterns seen across Africa.

Companies rise rapidly through contracts, licences or politically connected opportunities but struggle to transform into institutions capable of surviving economic pressures, leadership changes, illness, founder deaths, or the loss of state contracts.

Namandje himself pointed to one of the deepest and least openly discussed pressures affecting black professionals and entrepreneurs when he described black poverty as “vicarious and contagious”.

“It is the continuous and daily requests for donations to bury loved ones, daily requests to pay school fees for others, and daily requests to buy basic food for others that make black success illusory and futile,” he said.

That statement touches on a reality that cuts across much of Africa, where first-generation black professionals, executives and entrepreneurs often become the financial backbone of entire families and communities still trapped in poverty.

ATM culture

A successful business owner is frequently expected to carry unemployed siblings, cousins, funeral costs, medical emergencies, village responsibilities, school fees and endless requests for assistance all at once.

The moment someone secures a major tender, opens a successful business or enters senior management, the expectation immediately emerges that the individual must now uplift an extended network of relatives and community members.

While rooted in communal solidarity and survival traditions developed over decades of poverty and exclusion, the unintended consequence is that business capital is often consumed before it can compound. Company accounts become emergency funds. Operational capital gets diverted toward social obligations.

Profits are consumed before reinvestment.

A growing “ATM culture” has emerged, in which the business owner becomes a permanent source of immediate financial rescue for an ever-expanding network of dependents.

Such pressure undermines capital accumulation and long-term business sustainability, as companies struggle to build reserves, expand operations, or institutionalise governance structures while carrying overwhelming social obligations.

The ‘elite’ problem

Another major challenge is the rise of empowerment systems that create politically connected beneficiaries faster than they create productive industrialists and institution-builders.

South African economist Moeletsi Mbeki has argued that many empowerment systems on the continent have produced consumption elites rather than productive business classes capable of building sustainable industries.

The African Development Bank has warned about “elite capture” in African economies where procurement systems, empowerment programmes and state contracts disproportionately benefit politically connected groups without necessarily expanding productive capacity or broad employment growth.

Namibia has witnessed similar warning signs through politically connected tenders, procurement scandals and businesses that expanded rapidly during periods of political proximity, only to weaken once contracts disappeared, investigations began or political networks changed.

Corruption itself has become one of the biggest destroyers of genuine black enterprise because it rewards access over competence, proximity over productivity and connections over competitiveness. Businesses built primarily on state contracts or political relationships frequently struggle to survive in competitive markets once the flow of contracts slows or political protection disappears.

The founder trap

The deeper structural weakness, however, lies in the fact that many businesses are built around personalities rather than systems.

The founder negotiates contracts personally, controls finances personally, manages suppliers personally and remains the centre of all decision-making.

When the founder falls ill, operations slow down. When the founder dies, the business often collapses because no succession systems are in place: institutional governance structures or professional management layers capable of sustaining operations independently.

Most black-owned businesses don't survive into second or third generations due to founder dependence, governance failures, succession disputes, and the inability to separate company finances from personal or family obligations.

Earlier this year, NTB chief executive Sebulon Chicalu said about 97% of Namibian SMEs are considered non-bankable by traditional financial institutions due to poor documentation, lack of collateral, weak financial management and limited business preparedness.

Those figures suggest that tenders alone do not create a business institution. A licence alone does not create competitiveness. Political access alone does not create governance systems.

Black poverty does not need empowerment legislation but a stronger entrepreneurial and money culture built around reinvestment, governance discipline, tax compliance, succession planning and institution-building. Namandje is correct that Namibia still faces unfinished business regarding economic advancement and inclusion, but the deeper question is whether empowerment alone can succeed without a parallel culture of financial discipline, institutional thinking and long-term business building.