When I first encountered this truth at university, the realisation was strangely liberating. For years, the dominant narrative had implied that Black South Africans simply had not built businesses or accumulated wealth on their own. The implication was clear: the absence of a Black entrepreneurial class reflected some internal failing, some lack of initiative or ambition.
The truth was far more disturbing. It was not a lack of agency. It was the deliberate removal of it.
Apartheid did not merely segregate people. It systematically crushed the possibility of a Black entrepreneurial class. Understanding how it did this is essential to understanding why economic transformation remains so challenging today.
The Memory That Haunts
My mother often told me how white traders would drive into Soweto to sell goods to Black residents in the township. Even as a child, the story sounded absurd to me. How could people living in a community of hundreds of thousands not be the ones selling to each other? Why did goods have to be brought in from outside?
The answer lay in a web of laws and regulations designed for precisely that outcome. Licensing laws, zoning restrictions, and urban planning policies tightly controlled who could trade, where they could trade, and what they could sell. Economic participation was regulated to ensure that Black people remained consumers and labourers rather than owners. They could buy. They could work. They could not build.
The Labour Dormitories
The design of the townships themselves reveals the intention. They were never meant to be places of commerce or opportunity. They were deliberately constructed as labour dormitoriesplaces where workers could sleep before returning to jobs in white-owned factories, mines, and homes.
Mining and industrial companies depended heavily on the migrant labour system. Black men were housed in single-sex compounds near the mines while their families remained in rural areas. This arrangement ensured a steady supply of cheap labour while shifting the social costs of family life, care, and survival onto rural households.
In practice, this meant that Black women in rural areas carried an enormous invisible burden. They sustained families, raised children, and absorbed the instability of migrant incomes. Some scholars have described them as the unpaid welfare state of apartheid.
The Businesses That Could Exist
Some Black-owned businesses did exist, but only within tightly circumscribed boundaries. They were survivalist enterprises serving local communitiesspaza shops, shebeens, hair salons. They could not scale. They could not formalise. They could not integrate into the broader economy.
The result was an entrepreneurial class that was systematically prevented from accumulating capital, building networks, or passing down wealth to the next generation. Entrepreneurship did not disappear. It was forced into the shadows, into informality, into survival mode.
Why History Matters
This history matters because entrepreneurship does not emerge overnight. It develops through networks, inherited capital, education, and market accessresources that apartheid systematically denied to the majority of the population.
When apartheid ended in 1994, South Africa did not start with a clean slate. It started with a population that had been deliberately excluded from economic participation for generations. The skills were missing. The capital was missing. The networks were missing. The confidence was missing.
The Conglomerate Era
During the 1980s, five large conglomerates controlled a staggering 80% of the Johannesburg Stock Exchange. This concentration of wealth emerged during decades of economic isolation and was reinforced by the structures of white minority rule. Breaking this concentrated accumulation became the central challenge of post-apartheid economic policy.
Broad-Based Black Economic Empowerment was a strategic necessity to dismantle the “old-boys networks” of the apartheid era. It sought to open doors that had been deliberately closed. But its implementation has been uneven, contested, and often criticised. The underlying structures it sought to transform have proven remarkably resilient.
The Second Economy
Thabo Mbeki’s concept of the “Second Economy” remains a lived reality for millions of South Africans. It describes a structurally disconnected space of underdevelopmentstill suffering from what some have called the “Shadow of History.”
This geography continues to impose high transaction costs and limited market access for many small and medium enterprises. If your business is in a township, your customers have less money to spend. Your access to finance is restricted. Your ability to reach broader markets is limited by transport costs and infrastructure deficits. The spatial legacy of apartheid endures.
The Education Deficit
The effects of the education system are equally enduring. The deliberate denial of quality education and technical training under the Bantu Education Act created a generational skills deficit. This deficit is most acute in high-skill sectors where global capital is most likely to invest.
When investors look for opportunities in South Africa, they look for skilled managers, technical expertise, and innovative capacity. These resources remain concentrated in the same networks that benefited from apartheid. Breaking that concentration requires not just policy, but generational investment in education and training.
The Entrepreneur’s Reality Today
For a young Black entrepreneur starting a business today, the obstacles are not the same as those faced by their grandparents. Licensing laws do not explicitly exclude them. Zoning regulations do not target them. They can register companies, open bank accounts, and compete for contracts.
But they are also not starting from scratch. They are entering value chains that were historically structured in ways that excluded people like them. They are competing against established firms with decades of accumulated capital and connections. They are navigating an economy where the rules may be equal, but the starting points are not.
The Era of Reclamation
I see this era as one of reclamation. Reclaiming the meaning of economic freedom. Reclaiming the possibility of ownership. Reclaiming the dignity of building something that lasts.
We are analysts, founders, policymakers, and investors helping to shape the next chapter of the South African economy. The entrepreneurs building businesses today are not just creating jobs and wealth. They are writing a new storyone that challenges the legacy of exclusion and asserts the possibility of inclusion.
Human Rights Day Reflections
As South Africa marks Human Rights Day, the question is not only whether we have the right to vote, but whether we have truly dismantled the structures that once determined who could own, who could build, and who could prosper.
Political freedom was the first step. Economic justice is the longer journey. The architecture of exclusion was built over centuries. Dismantling it will take generations.
But the entrepreneurs building businesses todayin townships, in rural areas, in cities across the countryare proof that the spirit of enterprise was never destroyed. It was suppressed. It was forced into the shadows. But it survived.
Now it is emerging, slowly and unevenly, into the light. The question for policymakers, investors, and all of us is whether we will help it flourish.
