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In a recent annual general meeting speech, Gareth Ackerman, the prominent South African tycoon and chairman of leading retailer Pick ‘n Pay, expressed deep concern regarding the government’s plans to revise empowerment policies and legislation.
Ackerman, known for his influential position in the private sector and his significant contribution through Pick ‘n Pay’s operations, warned that the proposed changes could place undue burdens on the private sector.
In his address released on Wednesday, Ackerman, who leads Pick ‘n Pay and ranks among the country’s wealthiest businessmen, spoke candidly about his apprehensions for South Africa’s future, stating: “It’s been hard to stay positive about the future of SA for a long time now.”
Of particular concern for Ackerman were the legislative changes to the Employment Equity Amendment Act, which he believes threaten private employers with punitive measures if they fail to maintain a workforce reflecting racial demographics. He warned that the act may lead to widespread unemployment among qualified individuals, replacing them with unqualified workers, and could have severe repercussions for the country’s economy.
“The act is probably unconstitutional and could ruin many productive companies and foreign investments on which the economy depends. I cannot understand why our government has not caught up with the times,” Ackerman asserted during his speech.
Moreover, Ackerman highlighted that most large corporates, including Pick ‘n Pay, were already striving to achieve diversity and empowerment in their workforce. He emphasized that his company had dedicated more than R50 billion ($2.78 billion) to “BEE businesses” in the past year, outperforming its peers.
The government’s amendment Bill grants the minister of employment and labor the authority to establish employment-equity targets for specific economic sectors and regions with slow transformation progress.
Furthermore, the minister gains the power to regulate compliance criteria for issuing Compliance Certificates in accordance with Section 53 of the Employment Equity Act. The amended act enables the minister to set regional targets, recognizing the regional variations in racial diversity within South Africa.
However, the additional empowerment expectations imposed on private companies could lead to a potential exodus of skilled professionals, devaluation of farms, and threaten food security.
As the scion of the Ackerman family, one of the wealthiest families in South Africa, Gareth Ackerman’s views carry considerable weight in the business community.
Under his leadership, Pick ‘n Pay has expanded its operations significantly, with over 2,000 stores spread across eight African countries. The Ackerman family owns a substantial 25.53-percent stake in the retailer, valued at over $280 million.
Despite facing challenges due to load shedding in the country, Pick ‘n Pay posted a profit after tax of R1.169 billion ($64.1 million) at the end of its 2023 fiscal year.
Although this figure represents a 3.7-percent decline from the previous year’s profit of R1.214 billion ($66.3 million), the company’s financial statements also showed an 8.9-percent surge in revenue from R97.9 billion ($5.36 billion) to R106.6 billion ($5.84 billion) for the same period.
