Share

BEE a disservice to South Africa's economy - Moeletsi Mbeki

accreditation
The role played by social assistance and the protection of jobs remains a critical all-inclusive response, says the writer. (iStock)
The role played by social assistance and the protection of jobs remains a critical all-inclusive response, says the writer. (iStock)

Black Economic Empowerment has not added any value to the South African economy and should be scrapped and replaced with a more integrated business development policy, according to political economist Moeletsi Mbeki.

Mbeki, a long-time critic of the legislation – which was designed to address the inequalities of apartheid and drive economic redress by increasing the participation of black people in the economy – reiterated his rejection of the policy on Thursday.

"BEE, in my view, has been a disservice to the economy of South Africa," said Mbeki during a dialogue on Broad-Based Black Economic Empowerment (B-BBEE) hosted transformation consultancy BEEnovation. 

The discussion took place amid increased pressure on the SA economy from the effects of Covid-19.

Failure

Mbeki believes that the legislation should be "scrapped" and replaced by an integrated development programme which will benefit all South Africans irrespective of race.

He argued that the failure of the legislation was evident in the country's high unemployment rate, which has continued to soar despite the distribution of large empowerment deals to the connected elite.

The Covid-19 pandemic has revived debate around the legitimacy of the legislation, including a failed legal bid by trade union Solidarity and its associate, AfriForum, challenging the application of B-BBEE provisions in the distribution of R200 million relief funding for tourism companies.

The court case was followed by remarks by Finance Minister Tito Mboweni in Parliament, saying government has a responsibility to support businesses regardless of the race of their owners during the pandemic.

This was in contrast to earlier comments by Tourism Minister Mmamoloko Kubayi-Ngubane.

Critics of empowerment legislation had in the past described it as a form of racism, saying it had failed to create new industries.

Transformation still necessary

But Duma Gqubule, the founder of the Centre of Economic Development and Transformation, believes transformation is still a much-needed tool to ensure equality and broader participation of black people in the economy.

"Instead of scrapping BEE, we must look at ways of strengthening it," he said, adding that the focus now should be on stabilising the economy.

"When you have a crisis, you can't return to the old crisis. Instead, we must use it to create a new future for our country.

"This coronavirus crisis has exposed so many fault lines in our society, and inequality is one of them."

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
+0.1%
Rand - Pound
23.88
+0.1%
Rand - Euro
20.38
+0.2%
Rand - Aus dollar
12.32
+0.2%
Rand - Yen
0.13
+0.1%
Platinum
908.05
+1.2%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders