- BEE has failed, enriching a small ANC-connected elite while leaving most South Africans behind.
- The DA’s empowerment model will focus on need, poverty reduction, and real opportunity – not race or connections.
- The DA is driving reforms, including new procurement rules and a scorecard, to deliver real empowerment and growth.
Despite – and because of – the ANC’s three decades in government on their own until last year’s election, South Africa remains a vastly unequal society where there is great wealth alongside poverty.
This is clearly unacceptable and deserves the serious attention of the government. But Deputy President Paul Mashatile is wrong: BEE is not working, but it is certainly not the only option on the table, and moving away from BEE would take South Africa forward, not backward. Quite simply, with more effective policies and legislation South Africa would do away with crude race-based classification and produce real empowerment for people who really need it.
The DA is working hard to overcome those like Mashatile who are determined to keep the status quo. The DA is working on sound policy and legislation that will finally address South Africa’s empowerment problem without damaging the economy and worsening race relations.
For the last thirty years, the ANC has attempted to address this problem through BEE policies. The record is clear: Far from empowering those who need it most, BEE has led to a small super-rich elite and very little economic growth, fewer jobs, and worsening hunger. Professor William Gumede’s conservative calculation that just 100 beneficiaries have extracted R1-trillion Rand, should horrify everyone in South Africa.
The trouble is that the small super-rich elite which has been created by BEE exists at the expense of the rest of South Africa, and comprises mostly ANC insiders and their cronies.
This is why they continue to defend and continue to implement BEE when it has clearly failed to deliver real change in the lives of the most vulnerable citizens.
Mashatile and ANC insiders want to continue to shake down local businesses, demanding they hand over a slice of their ownership to those with insider ANC connections. And they do this even if it has disastrous results for jobs and investment, as was the case with Elon Musk, who chose not to bring Starlink to South Africa and subsequently made our country a target of the White House.
Collectively the business and investment community has slammed BEE as probably the most serious roadblock to investment into South Africa. They simply will not bring new money into our country while the law demands that they give away ownership of that investment for free, to people who are insiders at the BEE game.
The alternative to BEE is not by any conception “no more transformation” or even “less transformation” – but it is “real empowerment for the real people who really need it.” This is empowerment based on need, not on political connections.
The DA has built our Economic Justice Policy on the pillars of the UN’s 17 Sustainable Development Goals, which ask the right questions, including:
- Are we ending poverty?
- Are we ending hunger?
- Are we promoting health and well-being?
- Do we provide inclusive, equitable, and quality education for all?
- Are we building resilient infrastructure, promoting inclusive and sustainable industrialisation, and fostering innovation?
We must envision a new empowerment model for South Africa where the test is not just race, but whether procurement or economic opportunity is measured by ending poverty, ending hunger, promoting health, improving equitable access to education, and industrialising South Africa with infrastructure and innovation.
BEE today determines that a young hardworking entrepreneur, who is not politically savvy, nor socially connected and is economically excluded will get no opportunity or leg-up, while watching empowered connected persons drive past them in flashy multi-million Rand cars, to their latest insider deal. That is not what South Africa needs.
Beyond the policy level the DA is working on legislative changes too. We are proposing a Public Procurement Amendment Bill that will change the way the government procures goods and services to end the scourge of BEE fronting, inflated pricing and contracts for cronies. It has been too easy for BEE to turn government procurement into a patronage network for insiders, and our Amendment Bill will stop this.
Public Procurement must be turned into a key instrument in the fight against poverty and to create opportunities using an objective, outcome-based system – without racial classification – that gives a real fair shot to that same young hardworking entrepreneur, who is not politically savvy, nor socially connected and is economically excluded. Why should anyone defend a BEE that ensures such a needy South African would never stand a chance?
To give every person who works hard to fight their way out of poverty a real shot at empowerment, the DA will soon announce action around the Broad-Based Black Economic Empowerment Act of 2003 in its entirety and we will move to change the laws of South Africa which seek to entrench race-based procurement further.
This would include a new alternative empowerment scorecard that gives points to those entities that demonstrate that they address poverty and sustainable development, not race-counting the entities attributes.
The DA’s scorecard will evaluate bids on the bidder’s demonstrable contributions to the Sustainable Development Goals and on value for money on a 20/80 split. Imagine a new small business that can now be part of government procurement opportunities, assessed for points on its ability to deliver the alleviation of poverty, job creation, education, health and environmental responsibility to earn meaningful points.
This marks a dramatic change away from insiders benefiting over and over, and forever ends the reign of terror of the current BEE scorecard that would have given that same entity 0 points because it would racially bean-count the ownership or management instead of the good it does to society.
It’s time to end elite race-based enrichment and ensure that real empowerment occurs.
The DA is armed with policies and the legislation that can grow the economy, create jobs, and deliver genuine empowerment for all South Africans.
There will be a lot of moaning from the cronies as they try to protect their special interests – they metaphorically spit in the face of our poorest South Africans who desperately want to get ahead but are stuck without work, stuck in poverty, and know that this is the only way forward to overcome their economic exclusion.