Evaluating transformation progress of historically disadvantaged South Africans: Programme perspective on the downstream petroleum industry

Msuthukazi Makiva,Isioma Ile,Omololu M Fagbadebo

doi:10.4102/aej.v7i1.373

Msuthukazi Makiva, Isioma Ile + Show 1 more

Open Access

https://doi.org/10.4102/aej.v7i1.373

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Abstract

Background: Since the dawn of democracy in 1994, the South African (SA) government has sought to ensure economic transformation of historically disadvantaged people, using a series of programmes and projects. The petroleum downstream of SA, regulated by the Department of Energy, is among the industries that government uses to maximise transformation. Through a licensing sub-programme, one major condition stipulated prior to awarding licences to operate is the inclusion of historically disadvantaged South Africans in the business plans.Objectives: This article evaluates the extent to which one of the sub-programmes developed to empower historically disadvantaged South Africans (HDSA) in the downstream petroleum industry (petroleum licensing) meets the requirements of the identified relevant evaluation criteria, based on the guidelines of the Development Assistance Committee of the Organisation for Economic Cooperation and Development (DAC/OECD).Method: This sub-programme (partial summative evaluation) is critical as it sought to determine its alignment to the tenets of government policy of addressing past inequity by means of economic ownership. The DAC/OECD evaluation criteria were selected to measure the relevance, effectiveness, efficiency, impact and sustainability of the sub-programme. The justification for using this model is that it is appropriate to public policy response and management tool, especially for developing countries. Some of these measurements were conducted qualitatively, while some were done quantitatively.Results: Emerging data trends analysed indicate that there is a great deal of efficiency in the delivery of licences to operate in the downstream petroleum sector as these were issued in high volumes. The same cannot be said about the HDSAs’ economic empowerment, by means of ‘dealer’ and ‘company’ ownership.Conclusion: Research concludes that the lack of critical resources, such as funding, land, infrastructure and critical skills, were the main reasons why the sub-programme is DAC/OECD non-compliant.

Highlights

The structure of the petroleum and gas industry has three major streams. These are the upstream, which facilitates exploration and includes the development and production of crude oil or natural gas; the midstream, which is centred around oil tankers and refiners; and the downstream, which deals with retailers and consumers (Republic of South Africa [RSA] 2003b:2)
It is paramount to note that the focus on the transformation of historically disadvantaged South Africans (HDSAs), especially in the petroleum industry, post-1994, embodied the painful historical past that sidelined HDSAs from the economic benefits of this critical sector of the economy
A key issue is that the sub-programme did not show a logical link with the policy objective of ensuring perceptible HDSA transformation

Summary

Introduction

The structure of the petroleum and gas industry has three major streams. These are the upstream, which facilitates exploration and includes the development and production of crude oil or natural gas; the midstream, which is centred around oil tankers and refiners; and the downstream, which deals with retailers and consumers (Republic of South Africa [RSA] 2003b:2). It is paramount to note that the focus on the transformation of historically disadvantaged South Africans (HDSAs), especially in the petroleum industry, post-1994, embodied the painful historical past that sidelined HDSAs from the economic benefits of this critical sector of the economy. In this regard, this article focuses on the downstream petroleum sector with a view to understanding the economic empowerment of HDSAs, with reference to ‘dealership’ and ‘company’ ownership. Through a licensing sub-programme, one major condition stipulated prior to awarding licences to operate is the inclusion of historically disadvantaged South Africans in the business plans

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Conclusion