Government doubles down on BEE in South Africa

The South African government has responded to a co-governing party’s proposal to drop Broad-Based Black Economic Empowerment (B-BBEE), saying that it “remains a key policy instrument of the State.”

On Monday, the Democratic Alliance (DA), the second-largest party after the ANC in the so-called government of national unity (GNU) coalition, said it will introduce an Economic Inclusion for All Bill to replace B-BBEE legislation.

The party said it had become a conduit for state-sponsored corruption, theft, and fraud, and has failed to reform the economy.

In response, the Government Communication and Information System (GCIS), which falls under the African National Congress (ANC) controlled Presidency, issued the statement on 21 October.

It said that “the policy remains central to South Africa’s economic transformation and forms part of South Africa’s long-term strategy to redress historic injustices, broaden economic participation, and build a truly inclusive economy.”

Critics like the DA argue the system deters investment, benefits a politically connected few, and hampers growth and job creation.

South Africa’s unemployment rate remains above 33%, and economic growth has averaged just 1% over the past decade.

The bill aims to “repeal all race-based preference preferential procurement provisions,” and replace them with a needs-based empowerment system that is not race-based, said DA head of policy Mathew Cuthbert.

This has set up a clash with the ANC, which views BEE legislation as key to its efforts to address persistent racial disparities in one of the world’s most unequal nations.

Broadly, B-BBEE is a policy that uses a scorecard system to encourage companies to hire previously disadvantaged groups under apartheid by offering access to lucrative government contracts and tax breaks. 

Following the DA’s announcement, the government, which the DA is part of, issued a statement saying that the policy “remains central to South Africa’s economic transformation.”

It said it forms part of South Africa’s long-term strategy to redress historic injustices, broaden economic participation, and build a truly inclusive economy.

The B-BBEE Act was passed through full democratic procedures, including public consultation and parliamentary approval, and that any policy changes should follow the same process, read the statement.

It said that B-BBEE “is not prejudiced” but rather “a constitutional and moral imperative” for equality, fairness, and redressing the imbalances of the past.

“As part of the GNU, all parties within this collective administration share a responsibility to advance policies that contribute to economic transformation and sustainable development.”

Government said that despite progress since 1994, major inequalities in ownership, management, and income persist.

It said that B-BBEE remains key to integrating previously disadvantaged groups into the economy, and that ongoing refinements aim to make the policy more effective, transparent, and aligned with national goals.

“The Government remains steadfast in advancing an inclusive economy that works for all South Africans.”

“The B-BBEE framework continues to be a central pillar in achieving this goal, addressing the inequalities of the past while unlocking the potential of every citizen to contribute to South Africa’s growth and prosperity,” it concluded.

GNU fault lines grow: DA challenges ANC to scrap BEE

Multi-party policies needed, says expert

Professor William Gumede has warned that South Africa’s governance is hampered when the African National Congress (ANC) treats its party policies as synonymous with national policies.

He argues that this approach undermines consensus in the GNU, stifles multi-party collaboration, and limits the country’s ability to respond to economic and social challenges.

Gumede is an associate professor at the Wits School of Governance, founder of the Democracy Works Foundation, and multiple-time best-selling author.

In the 2024 general elections, the ANC lost its three-decade-long majority, receiving 40% of the vote.

It formed a coalition, or ‘GNU’, with the DA, Inkatha Freedom Party (IFP), Patriotic Alliance (PA), Vryheidsfront Plus (VF+), and five other smaller parties.

However, various parties within the GNU have complained about the ANC’s dismissive nature to the ideas, inputs and concerns of their coalition partners.

“Now, if the ANC continues to insist on the ANC’s party and ideological policies being the country’s policies, the journey will become unsustainable,” Gumede told Newsday. 

“This is supposed to be a whole new multi-party government with new policies. Meaning every ANC policy must be set aside for new policies, which are GNU policies.”

Gumede emphasised that a coalition can only function effectively if policies are multi-party and consensus-driven, rather than dictated by the majority party.

The ANC’s majority-based decision-making culture, Gumede said, has historically shaped government decisions to align with party ideology rather than the country’s best interests. 

“A governing party’s interest is not necessarily the best interest of a country,” he said.

This has had tangible consequences. Policies driven primarily by ANC ideology have often prioritised symbolic or transformative goals over pragmatic measures to boost growth and reduce unemployment.