Black Economic Empowerment
[1][4] However, although earlier initiatives were governed by different legislation and sets of arrangements, the underlying principles and policy are very similar, and BBBEE is often still referred to as "BEE" in common parlance.
In June 2021, President Cyril Ramaphosa announced that South Africa's BEE strategy and legislation would be reviewed, especially to ensure that they are not exploited for corrupt purposes.
Under apartheid, legislation and practice had restricted the access of non-whites to job opportunities, capital, business and property ownership, and other forms of economic advancement, leaving vast racial inequalities in wealth and income.
[1] The central socioeconomic policy framework of Nelson Mandela's government was the Reconstruction and Development Programme (RDP), which did not specifically refer to "black economic empowerment".
Amid dissatisfaction with the progress of existing initiatives, in May 1998 the Black Business Council appointed future President Cyril Ramaphosa to chair a BEE Commission.
It is aimed at redressing the imbalances of the past by seeking to substantially and equitably transfer and confer the ownership, management and control of South Africa’s financial and economic resources to the majority of its citizens.
[7] This is what sociologist Roger Southall called the "maximalist" (now the "broad-based") approach to BEE, envisaging a more dramatic transformation of the South African economy, with redistributive objectives going beyond black ownership.
[8] According to Southall, a major force behind this shift in strategy was the growing popular perception that BEE had thus far worked to benefit only a tiny black elite,[2][8] a criticism prominently voiced by the influential Congress of South African Trade Unions.
[7] At the 51st National Conference of the ANC in December 2002, President Thabo Mbeki committed the government to drawing up a "Transformation Charter" involving a consolidated and clarified strategy on BEE.
The Codes of Good Practice set out specific criteria (known as "targets") under each of the seven elements or pillars of BBBEE, which correspond to the seven categories on the scorecard.
[13] There are sector-specific codes defining targets specifically applicable to the agriculture, finance, defence, ICT, transport, property, forestry, construction, tourism, and media, advertising and communication sectors.
Moreover, Exempted Micro-Enterprises (including businesses with total annual revenue below R10 million and all start-ups in their first year) are automatically given Level 4 BBBEE status.
At the advent of the policy, and especially during the Mbeki presidency,[20] the ANC was explicitly committed to promoting the development of a "patriotic black bourgeoisie"[8][21] whose rise could initiate broader transformation in the economy.
The 50th National Conference of the ANC in 1997 agreed that:Though such instances may be an exception to the norm, experience in other countries has taught us that, without vigilance, elements of these new capitalist classes can become witting or unwitting tools of monopoly interests, or parasites who thrive on corruption in public office.
Archbishop Desmond Tutu expressed this view, asking, "What is black empowerment when it seems to benefit not the vast majority but an elite that tends to be recycled?
The Institute of Race Relations found that the number of black South Africans employed as managers had increased by 176.3% between 2001 and 2017 (compared to 32.1% population growth in that group over the same period).
[33] As of the second quarter of 2021, the unemployment rate for white South Africans, at 8.6%, remained significantly lower than that for blacks (38.2%), coloureds (28.5%), and Indians and Asians (19.5%).
[35][36] However, the phrase is most commonly used in reference to so-called "window-dressing," a form of tokenism whereby entities improve their BEE status by appointing black directors, managers, employees, or suppliers, who are, in practice, discouraged or inhibited from substantially participating in or benefitting from the enterprise.
[41] A notable criticism of BBBEE is that the policy has been co-opted by members of South Africa's political elite, mostly within the governing ANC, for the purpose of self-enrichment.
[8] Perhaps most prominently, several politically connected ANC stalwarts – notably Saki Macozoma, Tokyo Sexwale, Cyril Ramaphosa, and Patrice Motsepe – gained substantial wealth and influence in key sectors such as mining and finance through BEE deals.
[65][66][67] In 2018, for example, as a condition for increasing investment in South Africa, the European Union requested a relaxation of BEE ownership rules, calling the targets unfairly onerous.
[69][70] One study found that corporate brain drain from South Africa is "very low if not rare",[71] and others argue that the emigration of some skilled workers "creates opportunity" for diversifying the relevant sectors while appointing their replacements.
