An Empirical Evaluation a Dissertation Submitted In
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BLACK ECONOMIC EMPOWERMENT IMPLEMENTATION IN THE NAMIBIAN FINANCIAL SECTOR: AN EMPIRICAL EVALUATION A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF BUSINESS ADMINISTRATION OF THE UNIVERSITY OF NAMIBIA BY EVANS MULELE SIMATAA 9217436 SEPTEMBER 2019 MAIN SUPERVISOR: DR. ALBERT ISAACS (UNIVERSITY OF NAMIBIA) CO-SUPERVISOR: DR. FANNY SARUCHERA (UNIVERSITY OF THE WITWATERSRAND) Abstract Economic empowerment in Namibia has a valid historical grounding. The country’s history before and after independence, as the consequences of the apartheid regime, has been marked by inequality and profound economic exclusion of the majority black people from participation in mainstream economic activities. To deal with the legacy of apartheid, direct intervention in the distribution of economic assets and opportunities was deemed desirable. The Namibian government introduced various policies aimed at redressing inequalities of the past subjected on the black majority by the former regime. One of these policies is Black Economic Empowerment (BEE). It was envisaged that for the economy to succeed, the majority of the citizens must play a meaningful role, beyond being workers, but must participate also as business owners, executives and senior managers, entrepreneurs and also as decision-makers in the economy. The financial sector in Namibia is crucial to the growth of the economy and the overall achievement of developmental goals of the country. The sector, in response to the call by government to transform, developed and adopted a voluntary charter to spearhead, guide and drive the implementation of BEE in the sector. This study evaluates the implementation outcomes of BEE in the financial sector of Namibia. A gap and disconnect was identified in the literature between the intentions and prescripts of the voluntary adopted Namibia Financial Sector Charter, and the financial sector’s response to and implementation outcomes of the BEE initiative. Furthermore, a gap was identified between the government’s objectives and intended outcomes of the BEE initiative on one hand and the financial sector’s response, progress made and outcomes in implementing BEE policy on the other. The study adopts an outcome evaluation design that utilises sampling, data collection and data analysis methods that are aligned to both the research objectives and theoretical foundations of the research paradigm. The research employs a mixed research methodology with predominantly qualitative approach to assemble and analyse the data in examining the implementation outcomes of BEE in 13 large-scale financial institutions. Primary data was collected from individuals officially designated to represent these institutions through a 42 item questionnaire and through semi-structured interviews of a highly selective sample of 11 prominent, knowledgeable individuals representing industry regulators, trade ii unions, industry bodies, academics as well as selected economic, social and political commentators. The interviews were based on an interview guide consisting of predominantly open ended questions. The data in this study was analysed by using a combination of qualitative and quantitative methods. The processing of qualitative data analysis, involved transcribing collected data into rich text format, then cut and pasted onto Microsoft Word (2010). The data was coded and labelled using the appropriate coding and labelling technique. Quantitative data was analysed using SPSS (version 20) and Microsoft Excel (2010) software packages. A number of informative findings emerged, but chief among them is that in its current form, the voluntary financial charter adopted to drive the implementation of BEE in the sector, performed below expectations and is not as successful and effective as anticipated. Lack of a legislative and policy framework to guide and enforce implementation is one of the numerous highlighted contributing factors. The study provides a range of suggestions for research to fill a number of identified gaps in the existing body of knowledge on BEE. Finally, the study presents a number of recommendations to the regulators, financial institutions, executives and to the government that may be useful in making BEE implementation effective. It is the conclusion of the study that, despite the highlighted flaws and defects, BEE initiative is necessary and Namibia should not deviate from the principle of a more equitable society and economy. iii Acknowledgments All glory and honour to God Almighty for giving me wisdom, strength, guidance, dedication and for aiding me complete this dissertation. I further express my infinite gratefulness to Him for providing me with the privilege of being able to further my education. My utmost gratitude and special thanks goes to my supervisors, Dr Albert Isaacs and Dr Fanny Saruchera, for their invaluable inputs throughout this project. I am deeply indebted to them for patiently assisting, meticulous evaluating and guiding me in the completion of this dissertation. I would also like to thank my supportive family, in particular my wife and children, who have always stood by me and assisted me whenever possible. Above all I would want to thank them for their understanding during the long hours when I was not home working on this dissertation and for giving me all the time and support through this journey. Thanks for your patience, unconditional love and for believing in me and for uplifting me up to new heights all the time. My wife Agnes, my sincere appreciation for unwavering support, commitment and constructive comments, I am truly blessed to have you in my life. This essay has benefited greatly from responses and comments from Taara Shaanika, Ndangi Katoma, Kenneth Matomola, Herbert Jauch, Mally Likukela, Chrisch Siririka, Klaus Schade, Ntwala Mwilima, Salatiel Shinedema, Samuel Vries and Tim Parkhouse. I am also particularly grateful to Dr Agnes Simataa for editing and for extensive written comments and criticisms provided. iv Dedication This study is dedicated to my parents, Mr Bartholomew Mabuku Simataa and Ms Rosemary Moola Lifalaza, and to all my children, who are the sun that brightens my days and the stars that light up and glorifies my nights. Thank you for the countless delights. v Declarations I, Evans Mulele Simataa, declare hereby that this study is a true reflection of my own research, and that this work, or part thereof has not been submitted for a degree in any other institution of higher education. No part of this dissertation may be reproduced, stored in any retrieval system, or transmitted in any form, or by means (e.g. electronic, mechanical, photocopying, recording or otherwise) without the prior permission of the author, or The University of Namibia in that behalf. I, Evans Mulele Simataa, grant The University of Namibia the right to reproduce this dissertation in whole or in part, in any manner or format, which The University of Namibia may deem fit, for any person or institution requiring it for study and research; providing that The University of Namibia shall waive this right if the whole dissertation has been or is being published in a manner satisfactory to the University. …………………………… Date………………………………. Evans Mulele Simataa vi Table of Contents Abstract ................................................................................................................... ii Acknowledgments .................................................................................................. iv Dedication ............................................................................................................... v Declarations ............................................................................................................ vi List of Figures ....................................................................................................... xiii List of Tables ........................................................................................................ xiv List of Abbreviations ..............................................................................................xv CHAPTER ONE ...................................................................................................... 1 INTRODUCTION TO THE STUDY ....................................................................... 1 1.1 Orientation of the study ................................................................................. 1 1.2 Background to the Namibian financial sector................................................. 6 1.3 Statement of the problem ..............................................................................14 1.4 Objectives of the study .................................................................................15 1.4.1 Broad Objectives of the study..........................................................................15 1.4.2 Specific Objectives of the study ......................................................................15 1.5 Significance of the study ..............................................................................16 1.6 Limitations of the study ................................................................................19 1.7 Delimitations of the Study ............................................................................20 1.8 Clarification and Definition of key terms and concepts .................................20 1.9 Structure and organisation of the study .........................................................24