As part of Business Day’s 40th anniversary reflections, we continue our deep-dive series into the policy pivots that reshaped South Africa — from inflation targeting and the rollout of a national HIV/AIDS programme, to landmark M&A deals and high-profile corporate collapses
Saki Macozoma stepped into his Safika Holdings boardroom, newsboy cap sitting snug on his head. The walls around him carried history — framed newspaper clippings chronicling his company’s turning points and a man’s journey through them.
In postapartheid SA, few figures straddle the political and corporate spheres as deftly as Macozoma. Once imprisoned for student activism, he emerged as a reformer in state-owned enterprises, a voice in national policy and the architect of Safika Holdings, one of SA’s most enduring BEE firms.
“When Safika began, we treated our empowerment equity as patient growth capital — never a one-off cash-out to fund lifestyle,” Macozoma recalls of Safika’s 2001 founding. His approach was methodical. Identify high-growth platforms, secure an initial foothold, let the stake appreciate, then recycle proceeds into new ventures. MTN Group offered the model. Safika became a shareholder in the early 2000s alongside President Cyril Ramaphosa’s Shanduka Group and other entities through a BEE deal.
“We let our stake in MTN appreciate, then sold small parcels to fund new projects — never splurged on consumption,” he explains. Today Safika’s footprint spans mining, banking, manufacturing, technology and property across three continents, embracing the origin story even as it has transcended it. “That mindset keeps us doubling down on new opportunities, not coasting on past credentials.”
Still, BEE’s original moral clarity has been shrouded by elite capture and uneven outcomes. At home, critics argue that a handful of well-connected insiders reaped the lion’s share of whole broader empowerment deals. The DA has gone as far as to propose replacing BEE with the UN’s development goals, while constitutional challenges to the Employment Equity Act underscore public fatigue.
Globally, BEE has become a geopolitical headache. In Washington, conservative legislators and opinion-makers cast race-based redress as reverse discrimination. That framing risks snagging trade talks and foreign direct investment, the opposite of BEE’s intent and a marked departure from early ANC economic debates that assumed the nationalisation of the economy’s commanding heights, breaking up of monopolies and absorption of major firms into the state.
BEE didn’t fail
The purpose has always been redress until BEE took a dark turn in the late 1990s that forms the basis for the raging debate about the policy as having failed to deliver on its intended purposes. Yet Macozoma is hitting back, saying SA did what was possible in a hurry, but left too much to goodwill and headline-chasing.
“BEE didn’t fail. It didn’t answer every question. I always say that this policy is not going to deal with all the issues alone. But the fact of the matter is that Sim Tshabalala would not have been CEO of Standard Bank without the BEE policy,” said Macozoma, who was imprisoned alongside Nelson Mandela.
The renewed scrutiny of the policy — born of well-meaning but ultimately layered colourblind liberalism — came after late 1990s and early 2000s deals were threaded with tokenism and fronting, leading to a cascade of failures that hollowed out genuine empowerment, enriched a narrow elite and eroded public trust in race-based redress.
But companies that embraced BEE as a strategic growth initiative, rather than punitive obligations, on the one side, and those that treated it as patient growth capital, rather than a one-off windfall to fund lifestyle, have prospered. “Those companies that actually did it the right way by understanding exactly what we are trying to address are the ones who thrived,” Macozoma said.
For instance, Standard Bank boasts one of the highest returns on equity in the sector, outpacing the wider industry average of 15%-16% — Exhibit A that empowerment is as much a redress measure as it is a powerful catalyst for superior financial performance. And black business leaders such as Patrice Motsepe and Macozoma viewed BEE as the seed funding, building broad mining, digital banking and telecom portfolios with recycled capital that transcend their BEE origin story.
Other firms saw the market opportunity that BEE legislation, from employment equity and sector codes to enterprise development and skills funds, was creating. The success of Capitec, which grew from zero to 24-million customers in just more than two decades, helped it break into the upper echelon of SA’s banking sector and Discovery, which runs the country's largest medical insurance, sprang from meeting BEE law-cultivated demand among black South Africans.
Capitec is a postapartheid institution. Was it driven by its adherence to the BEE concept, or was it by pure commercial opportunity? I think it was largely a pure commercial opportunity,” Macozoma said. “It’s a great success story.”
BEE pitfalls
Still, BEE’s original moral clarity has not weathered well. While Safika and others treated empowerment equity as seed capital, the policy itself was too often co-opted by short-termism, fronting and transactional excess.
More damning was the government’s 25-year review of inequality. SA remained the world’s most unequal society by Gini coefficient, with the bottom 60% holding less than 10% of the total wealth. A negligible effect despite decades of redress efforts.
The Zondo commission added a final indictment. BEE credentials, manipulated for procurement and enrichment, had become a lever for state capture, hobbling Eskom, Transnet and the SA Revenue Service.
“If asked who has spoiled the BEE story, it’s tenderpreneurs,” Macozoma said, reinforcing a common critique that BEE, in practice, has been hijacked by opportunism, leading to superficial and self-serving empowerment outcomes rather than systemic equity.
“Some of these guys are running businesses from cafe laptops — they submit applications, someone nudges them and next thing there’s a ‘gift’ under the table. It works — for some. But if you look at who’s truly made it, some of the richest black South Africans aren’t in traditional BEE companies. They’re tenderpreneurs. Just look at Sodi,” Macozoma said, referring to Edwin Sodi, who gained notoriety for his role in the Free State multimillion rand asbestos scandal and whose name has become shorthand for a certain kind of politically connected wealth.
BEE 3.0
These high-profile failures have fed into the narrative that BEE has failed, or it should have a sunset clause, a time limit at which it is phased out. Macozoma recalls how sunset clauses defined the tension at that heart of SA constitutional negotiations, quoting Albie Sachs, a poetic jurist, freedom fighter and constitutional architect rolled into one, as saying, “sunset clauses are bad for constitutions. Sunsets are good for lovers”.
“The reason there was never a sunset clause is [that] you’re dealing with social processes. You can’t schedule the end of inequality or transformation like it’s a contract. Social change isn’t predictable — it evolves through human behaviour, institutions and culture. So you can’t say, ‘by this year, it will be done.’ It’s nonlinear, messy, and often resists the timelines we try to impose,” Macozoma said.
Still, he sees room for BEE 3.0, saying transformation must be performance driven rather than perpetual and cautioning against the idea that BEE should adapt forever as it risks diluting its purpose.
“I understand the argument that transformation needs to evolve. But if it keeps adapting endlessly, then we’ve failed to deliver the kind of societal change that allows us to say, ‘we are all economic citizens now.’ I say this to my children: you can’t claim victimhood — you are not victims. You went to private schools, you had access to top universities, and now it’s up to you. That’s the mindset we need to instil in our people.”
Macozoma also rallied behind the “once empowered, always empowered principle”, the proponents which argue that once a company has met its empowerment obligations, it should retain the statues even if black shareholders later exit. “Because you can’t turn around after someone has exited and say, ‘give back your shares’ — especially if they never wanted to sell in the first place,” he said.
Macozoma questioned lock-in periods, arguing that their rigidity, often 10 years, lacks room for commercial realism, especially if the investor wants to exit or reinvest elsewhere.
“What happens when black investors enter a 10-year lock-in, and the company grows so much by year five that the debt is fully paid off? Why should they remain locked in? The whole idea was to provide capital, right? If the debt is settled and empowerment credentials remain intact, what’s the logic of denying liquidity? The risk is obvious — what if they wait until year 10 and the value has dropped by half? There’s no flexibility in that,” he said.
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