Black economic empowerment in South Africa

Black Economic Empowerment (BEE) was an initiative launched by the South African government to cancel out apartheid’s inequalities. Through a 2003 Act, disadvantaged groups collectively called ‘Black’ (black Africans, coloureds, Indians and Chinese who are South African citizens) were given economic opportunities previously denied them.

Apartheid’s legacy

Years of apartheid resulted in a sick economy and rampant poverty. The final verdict of economic ill health came in the 1970’s when the GDP fell to zero, despite South Africa’s  rich natural resources. Racial discrimination, with the ensuing isolation of the country by means of the sanctions imposed by the rest of the world, was the culprit.

Post apartheid and majority rule, control in the private sectors remained vested with the whites, who constitute just 10 percent of the population. 

BEE was instituted to nurture a new, more inclusive economy  to meet the needs of all citizens, one that the Department of Trade and Industry (DTI) says, “ will only be possible if built on the full potential of all persons and communities across the length and breadth of this country."

The outcome

Unfortunately, BEE benefited only a few black individuals, and widened the rich-poor gap. To correct this anomaly, a new Broad-based Black Economic Empowerment (BBBEE) was instituted in 2007.

BBBEE targets growth, social and enterprise development. It has a generic scorecard that measures companies' empowerment progress in four key areas – direct ownership, senior-level management, employment equity and indirect empowerment.

Ironically, BBBEE faced charges of creating a reverse-apartheid situation. Qualified whites, feeling discriminated against, left South Africa, resulting in a brain drain. BBBEE unveiled a new class of blacks in power who were primarily interested in amassing personal wealth using state resources, neglecting their brethren.

BBBEE ‘s scorecard is a mixed one. Undeniably, it has empowered many marginalised blacks;  it has also created a culture that glorifies false notions of success, epitomised by political connections and conspicuous consumption.  Hopefully, broad based black economic empowerment will, in time, live up to its promise.

Also see:

Department of Trade and Industry on BEE

BEE News