Biko was critical of the homeland (Bantustan) policy. At the height of his influence, between 1963 and 1976, Steve Biko called the homelands “the greatest single fraud ever invented by white politicians”. He made it clear that Blacks who said homelands could be exploited to wring concessions from whites 'have already sold their souls to the white man'.

Biko observed that Transkei president Kaiser Matanzima and Chief Gatsha M Buthelezi of KwaZulu- Natal:

“...are perhaps more than anybody else acutely aware of the limitations surrounding them. It may also be true that they are extremely dedicated to the upliftment of black people and perhaps to their liberation. Many times they have manifested a fighting spirit characterising true courage and determination.”

Nonetheless, Biko condemned these leaders both for accepting leadership of the white-made homelands and for unknowingly helping the apartheid government consolidate its policy of separate territorial development. In an article written under his pseudonym Frank Talk, Biko said, 'If you want to fight your enemy you do not accept from him the unloaded of his two guns and then challenge him to a duel.”

Therefore, Biko believed that Whites were using Buthelezi, not the other way round:

“For white South Africa, a man like Buthelezi ...solves so many conscience problems ...The combination of Buthelezi and the white press [also] make up the finest ambassadors that South Africa has ever had ...When you use Bantustan platforms to attack what you do not like you epitomize the kind of militant black leader who in South Africa is freely allowed to speak and oppose the system. You exonerate the country from the blame that it is a police state.”

An increasing number of Biko’s supporters agreed. In 1978 in Graaff Reinet, at PAC leader Robert Sobukwe's funeral, Buthelezi was jeered at and stoned by young Black Consciousness followers. Desmond Tutu advised the chief to leave. In the haste to usher the humiliated chief to safety, one of his bodyguards shot and wounded three of the mourners. The incident signalled a split between Buthelezi and the ANC, as the latter did not want to alienate the young Black Consciousness follower’s that they were recruiting.

Buthelezi fell into further conflict with his former allies in the Congress movement after clashes between his Inkatha supporters and Black students. In May 1980, secondary-school students boycotting classes in KwaZulu were attacked by a mob armed with spears and assegais. At the University of Zululand at Ngoye, the national student organisation, AZASO, was banned from the campus, not by the Pretoria government, but by the KwaZulu homeland government.

In October 1983, students denounced a visit to the campus by Buthelezi. As a result, Inkatha impis – soldiers wielding spears and clubs – were bussed in from all over the province. Students entering the campus were searched, but the impis were permitted to pass through the checkpoints with their weapons. The impis then attacked the students. Four students were killed and more than 100 others stabbed. Buthelezi later justified the incident by saying the Inkatha followers were provoked and said they “did no more than defend my honour and the honour of His Majesty the King.” The gulf between Buthelezi and other Black leaders increased.

Despite the fact that some of the incidents took place after Biko’s death, his supporters upheld his philosophy and continued to denounce the homeland policy for its negativity and its failure to recognise the growing stature of Black Consciousness. In fact, Biko saw all moderates working within the system as collaborators with the apartheid government.

With the expulsion of the moderate and pragmatic Themba Sono, this radical ideology was entrenched. Sono’s message and expulsion came at a time when SASO was beginning to take a more radical approach against apartheid. SASO then became overtly confrontational with the state. Older and more cautious political leaders feared that open militancy would undermine the youth’s future education.

Biko and the young leaders stressed that the liberation of Black people was first a psychological struggle against the portrayal of a Black man as an inferior person, lacking the good qualities that made a White person superior. As a result, culture took centre stage in the struggle. Biko taught Black people to be proud of their culture and personal appearance. The BC leaders discouraged the use of whitening skin lotions and hair products to straighten one’s hair because, in their view, these were equivalent to accepting White as superior to Black.

The second phase of the struggle focused on participating in national campaigns, backed by financial resources and much needed mobility to dismantle apartheid structures. As a result the Black People’s Convention was launched in 1971. Almost immediately, it was under police surveillance. Eight Black consciousness leaders were banned in 1973, and publication of BPC material became difficult.

However, by the end of the 1973, 41 branches were said to exist. Black churchmen were becoming increasingly politicised, and Black Consciousness became more outspoken and defiant of white authority. Schools also became politicised and this resulted in expulsions and attacks on Black education. Boycotts and school closures followed as Black-White confrontation began to yield the racial polarisation needed to bring about change. At Black schools, Biko and his student leaders became heroes, and high school youth organisations became the nurseries for revolt.

The government reacted by systematically depriving SASO of its leaders. As indicated earlier, in 1973 a number of banning orders were issued. Biko, Pityana and other SASO and BPC leaders were detained under the Terrorism Act, and the following year nine leaders of SASO and the BPC were charged for enticing disorder. The accused used the seventeen-month trial to their advantage, as a platform to state the case of Black Consciousness. They were found guilty, and sentenced to various terms of imprisonment for revolutionary conspiracy. However, they were later acquitted.

Their convictions strengthened the Black Consciousness Movement, and the repression instituted under the Terrorism Act caused Blacks to lose sympathy with moderate revolutionary policies, and lead to more militancy and demands for freedom. In June 1976, there were violent clashes between high school students and police, which marked the beginning of widespread urban unrest.

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