DA’s BEE replacement bill opposed by GNU partners

The Democratic Alliance’s (DA’s) proposal to scrap Broad-Based Black Economic Empowerment is unlikely to receive the required support of over 50% in the National Assembly. 

Parties governing alongside the DA in the Government of National Unity (GNU) have expressed their opposition to the DA’s proposal. 

On Monday, the 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.

The DA’s proposed Economic Inclusion for All Bill, which the party plans to table in parliament, aims to do away with BEE legislation and, in its place, institute a new public procurement system.

In a recent interview on BizNews, the DA’s Head of Policy, Mat Cuthbert, said that the DA would “put every effort in” to try and sway its partners within the GNU to get on board with the plan. 

However, some of the party’s GNU partners: the African National Congress (ANC), the Patriotic Alliance (PA), the GOOD Party, Inkatha Freedom Party (IFP), RISE Mzansi, and Al Jamah-ah have already expressed that they will not outright support the bill. 

In response to the proposal, the ANC, the DA’s largest partner in the GNU, said that “there will not be a day in South Africa when B-BBEE is scrapped.”

ANC spokesperson Mahlengi Bhengu criticised the DA for proposing the change, arguing that the legislation has led to positive transformation, and it is the ANC’s generational and historic responsibility to protect it. 

DA bill denies link between race and poverty

The Inkatha Freedom Party (IFP) similarly immediately opposed the DA’s intention to scrap B-BBEE, with national spokesperson Mkhuleko Hlengwa saying that “there is no need” to replace the policy. 

Steve Motale, spokesperson for the Patriotic Alliance (PA), told Newsday that his party agrees with the DA that B-BBEE is failing its mandate, but still opposes the DA’s plan. 

“We think that BEE’s potential as a force for good has been squandered by benefiting a lucky group of elites, specifically, and more generally creating vast inefficiencies for state procurement,” he said. 

He added that the answer to lifting the overlooked masses out of poverty lies in unleashing economic growth and development, not squabbling over an increasingly shrinking economic pie. 

“Scrapping BEE in its current form was part of the PA manifesto. But our alternatives differ from the DA,” he said. 

Motale said that there needs to be collaboration within the GNU to tackle this issue and chart a way forward, as years of sluggish economic growth and R1.6 trillion in dormant capital in the market make it clear it is time for a change. 

“As the GNU, we need to be bold and show the electorate that the change they have voted for can be achieved,” he said. 

Spokesperson for RISE Mzansi, Mabine Seabe, said that the DA “is throwing the baby out with the bath water and trying to play dog-whistle politics.”

“Do we believe that B-BBEE has been corrupted – yes, but that does not mean it should be scrapped. It means we must elect leaders and appoint public officials who are committed to redress,” he said.

Seabe said that B-BBEE is a moral and constitutional imperative, arguing that economic justice is one of the cornerstones of building a truly non-racial society.

“To achieve this goal, we need our economy to double in size every 12 years, which can be achieved with an annual minimum GDP growth rate of 6%.” He said this requires visionary leadership and a professional civil service.

‘DA throwing the baby out with the bath water’

The GOOD party shares the outlook that BEE is failing, but criticises the ANC for its implementation, and not the policy itself. 

“The fact that the ANC has grossly manipulated Broad-Based Black Economic Empowerment policies to favour a small circle of its friends is disgraceful and wasteful,” said GOOD Secretary General Brett Herron 

“But that does not mean the national imperative to transform ownership of the economy should be abandoned.”

He explained that BEE has achieved a few wins, such as the transfer of company shares to employees, but these successes have been overwhelmed by a tide of ineptitude and corruption. 

“What the DA Anti-BEE Bill seeks to do is use the ANC’s integrity lapses as a tool to retain ownership of the economy in the hands of apartheid beneficiaries, while being charitable to poor people,” he said. 

“It denies the undeniable links between poverty and race, which appears to be part of a broader strategy of apartheid denial,” Herron added. 

He further criticised what he called the DA-ANC binary that has served the country badly. 

Al Jamah-Ah party leader Ganief Hendricks told Newsday that his party will “strongly call for reparations” if the BEE Act is scrapped.

Of the remaining GNU parties, the Pan Africanist Congress of Azania (PAC), the United Democratic Movement, and the Vryheidsfront Plus (VF+), the only party that has been vocal against B-BBEE is VF+.

The party has previously called the policy “discriminatory laws based solely on race.” However, even the VF+ has not yet publicly expressed support for the DA’s proposal.