BEE under siege

Anthea Jeffery said that black economic empowerment (BEE) has only enriched a small number of black elite to the detriment of other South African citizens.

This is the view of Anthea Jeffery, author of Countdown to Socialism and head of policy research at the Institute of Race Relations.

Jeffery shed light on the state of black economic empowerment during an interview with the Free Market Foundation CEO, David Ansara.

She said that the ANC has embraced Black Economic Empowerment from the start as a way to curb business autonomy in South Africa.

“Managers must be chosen according to racial targets. They’re expected to do deals with people chosen by race rather than what they can bring,” she said.

This is opposed to free-market principles, where a person’s value is measured by investment, experience, and capacity.

“BEE procurement very often has to be from companies that are black rather than companies that are the most efficient and cost-effective,” she said.

Jeffery said that there is growing criticism of BEE, which is encouraging, especially as the government of national unity (GNU) has been ineffective in addressing it.

“Civil society is playing an important role, and the media is more willing to criticise BEE and point out that it only helps a small elite,” she said.

“This small elite is generally black people with strong political connections, the cadres at the top of the ANC’s totem pole.”

“BEE has a devastating impact on the majority of black South Africans because it’s such a barrier to investment, to growth, and to employment.”

She explained that most people in South Africa suffer rather than benefit from black economic empowerment policies.

Jeffery noted that the government of national unity was ineffective at addressing damaging policies such as BEE and Affirmative Action.

“If the GNU was really a way of rolling back bad policies, we would have seen it on something like BEE,” she said.

“Instead, we’ve seen various initiatives aimed at tightening it up. The Employment Equity Act is an example.”

She said the Minister of Employment and Labour has set targets for 18 sectors of the South African economy.

Businesses are expected to have reached compliance with these targets by the end of a five-year period in August 2030.

She said that this targets white males, who are very often the people with the best skills, knowledge, experience, and entrepreneurial capacity.

She said that cutting white males in certain sectors who have the skills and experience has negative economic consequences.