The ANC is the only party with a BEE policy, and the DA is keeping it in power
Political economist Moeletsi Mbeki said that the government’s poor policies are South Africa’s biggest problem, as they facilitate corruption and related issues.
While these government policies come directly from Luthuli House, the Democratic Alliance (DA) has the means to change them, said the political economist.
Mbeki made these comments during a panel discussion about the role of the business sector in addressing South Africa’s problems.
“South Africa’s biggest problem is not corruption. It is the government’s poor policies, and corruption is a by-product of these policies,” he said.
He cited black economic empowerment (BEE), which he said is the policy of only one political party, the ANC.
“What we should not forget is that majority of the voters of the ANC have rejected the party, including its policy of BEE,” Mbeki said.
“The voters have said they don’t want the ANC. However, the DA keeps it in power, along with its policies like BEE.”
He said if the DA withdraws its support of the ANC, the ANC government will collapse, and its BEE policies will be abandoned.
BEE only enriches a small group of connected people – Mbeki
Mbeki previously explained that it is a misconception that BEE places the economy in the hands of the majority of black people.
Instead, it benefits a small handful of politically connected elites and hinders the emergence of entrepreneurs, which stalls the economy, he said.
“In a capitalist system, a small number of people own the means of production in the economy. It is irrelevant whether they are white or black,” he said.
“The English people do not control the economy of England. A few capitalists control the economy of England. The same in France or the Netherlands.”
Most people in these countries, regardless of their race, do not own much. They are employees. The same, he says, happens in South Africa.
“You cannot have 80% of the population which becomes capitalists. That is not a capitalist country.”
BEE, established in around 2003, is framed at redressing apartheid-era economic inequalities by promoting Black participation in ownership, management, skills development, enterprise, and socio-economic development.
However, Mbeki said that instead of empowering black people, BEE is preventing companies from investing in South Africa.
Many companies desire and have the money to invest in the country. However, they are unwilling to give away part of their business for no benefit.
Capitalists can invest anywhere in the world, and taxing capital on arrival, which is what BEE does, makes South Africa an unattractive destination.
He said that while BEE is framed as addressing historical injustices, it primarily serves to enrich “a small political elite within the ANC.”
Mbeki has cited research from Professor William Gumede, whose studies have found that BEE has seen over R1 trillion move between just a handful of people.
The evidence that such policies are not working for all is seen in the ANC’s electoral decline, he said.
In a discussion with BusinessTech, Mbeki offered a sharp critique of the current coalition, describing it as “the ANC in drag”.
He argues that despite the DA’s inclusion, the fundamental policies favouring the African middle class have not changed.
While the DA used its leverage to ensure the reelection of key parliamentary figures, Mbeki suggests that it has thus far failed to bring about any significant policy shifts, which he argues should have been done in the negotiations.
DA calls for BEE to be abolished
Since then, the DA has formally urged the ANC to abandon its BEE policy and support a new DA bill.
The DA plans to table the “Economic Inclusion for All” bill, which would repeal race-based procurement rules and replace them with a needs-based system focused on value for money, economic inclusion, and anti-corruption measures.
Like Mbeki has primarily enriched a small elite while failing to reduce poverty or unemployment among the majority.
Since 2014, unemployment among black South Africans rose by 9 percentage points, while white unemployment fell slightly.
The bill would gradually wind down the BEE commission, remove BEE references from legislation, and align procurement with constitutional requirements for fairness and transparency.
The DA acknowledges the ANC will likely resist, but aims to table the bill to shift parliamentary debate and public opinion, saying the policy has become “a cash cow for corrupt ANC cadres.”
The ANC continues to defend B-BBEE, insisting it will not abandon its transformation agenda.
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When BEE was introduced, Cyril went to companies that needed government BEE approval and did a simple thing. CR gave them BEE status in exchange for being a Director of the company for a year. The fee for being a director was 16 Million rand for one year (early 1990’s), so CR was one of the few ANC elite who profited from BEE. The principle was, of course, legal corruption.