USIPHILE MPETSHENI: I was born into a New SA — but its economy still isn’t new

This year the constitution turns 30, and so do I. I no longer open it from a dog-eared booklet, as once handed out in classrooms, but download it onto my smart device, where the words in the preamble still carry economic ambition: to “improve the quality of life of all citizens and free the potential of each person”.

My mother recalls how, in the months after my birth, neighbours queued outside former model C schools, files in hand and expectations high. Fathers sat at kitchen tables marking job adverts, trying to calculate what a “new South Africa” might mean for households long excluded from its economy.

The constitution itself was still young. The Truth & Reconciliation Commission was opening old wounds in public. State-owned enterprises were being commercialised, the JSE was reconnecting with global markets, and the country was selling a powerful idea: political freedom would soon be followed by economic inclusion.

Thirty years on, the question is no longer whether South Africa is free, but whether its economy ever learned how to free its people. Today, I work in boardrooms where that promise is translated into spreadsheets, capital structures and transformation scorecards.

As a black South African chartered accountant I did not inherit apartheid, but I inherited its balance sheet. Few policies expose that inheritance more clearly than broad-based BEE.

Among the youth of my generation, and in influential critiques, BEE is often framed as patronage — a system that manufactured a black elite through proximity to political power rather than productive entrepreneurship. In this telling, empowerment is less capitalism and more concession; less market discipline and more favour allocation.

That argument deserves engagement. But working daily with leverage, cash flows and operating risk, I find the “handout” narrative analytically weak. It collapses a complex project of economic reconstruction into moral shorthand, while ignoring how markets are built.

Industrialisation everywhere has been political before it was market-based. Britain’s industrial revolution relied on enclosure laws, colonial monopolies and state protection. Germany and the US used tariffs and infrastructure investment to build domestic manufacturing. Japan’s Meiji state subsidised factories, railways and skills transfer long before private capital was dominant.

Markets do not simply appear; they are constructed through policy, power and institutions. South Africa’s transformation project is no exception. BEE is not a deviation from capitalism — it is an attempt, albeit imperfect, to build one that includes people deliberately excluded from it.

What often gets missed is how empowerment is structured financially. Most meaningful BEE transactions are not cash gifts. They are debt-financed, performance-dependent and risk-bearing. Equity is acquired through vendor financing, preference shares and leveraged instruments that must be serviced from dividends and operating cash flow.

What often gets missed is how empowerment is structured financially. Most meaningful BEE transactions are not cash gifts. They are debt-financed, performance-dependent and risk-bearing.

If the business underperforms, empowerment partners lose value, control and sometimes solvency. From a financial perspective, empowerment capital is conditional, not charitable.

The handout narrative also obscures black entrepreneurship that does not fit the caricature of political access. Saki Macozoma’s Tshipi é Ntle is often cited, but it is far from unique.

Tshipi has grown into one of the world’s major manganese exporters, moving millions of tonnes into Asian and European markets. It operates in a capital-intensive sector that demands logistics co-ordination, rail access, port capacity and exposure to global commodity cycles.

Politics alone cannot move ore to Shanghai. Similarly, Patrice Motsepe’s African Rainbow Minerals competes across iron ore, manganese, platinum and coal, carrying price volatility, labour risk and heavy capital expenditure.

Safika Holdings evolved from empowerment stakes into infrastructure finance and renewable energy development, structuring power and transport projects that require technical execution rather than symbolic ownership.

The data reflects this mixed outcome. The Broad-Based BEE Commission places average black ownership across measured entities in the high 20% range, with stronger gains in management control and skills development. Yet many firms remain below 25%, and inequality persists, with South Africa’s Gini coefficient still above 0.6.

The problem is not that BEE created black elites — every industrial economy does. The problem is that it has not yet become genuinely broad-based.

Analytically, empowerment is neither a wholesale giveaway nor a mass solution. It is uneven, narrow and constrained by the economy’s weak productive base. This is where the debate should move.

The problem is not that BEE created black elites — every industrial economy does. The problem is that it has not yet become genuinely broad-based.

Thinkers such as Moeletsi Mbeki and Sampie Terreblanche warned that inclusion without productive expansion reshuffles ownership without transforming output. If empowerment focuses on equity transfers without deepening industrial capability, supply chains, innovation and employment, it becomes distributive rather than developmental.

In practice, South Africa produces world-class accountants, engineers and entrepreneurs, but too many operate inside an economy that struggles to expand its productive core. Ownership matters, but production matters more. Without factories, logistics networks, technology platforms and export capacity, empowerment remains symbolic rather than structural.

This is why the real question is no longer whether BEE created elites, but whether it can create industries. For my generation, broadening BEE is not about polishing scorecards; it is about rebuilding markets.

Policy must shift from redistributing old equity to financing new productive capacity — beneficiation plants, logistics platforms, digital infrastructure and manufacturing. Capital must stop privileging collateral over competence through blended finance, state guarantees and enforceable offtake frameworks.

Empowerment must also be embedded in infrastructure and energy, positioning black firms as developers and operators. Imagine a black-owned consortium, backed by development finance institutions and banks, developing a battery manufacturing plant for the energy transition: government derisks the debt, Eskom signs long-term supply contracts, engineers earn equity and exports generate hard currency.

Empowerment as industrial strategy

That is empowerment as industrial strategy, not compliance administration. In a capitalist society like South Africa, broad-based empowerment cannot be moral redistribution alone. It has to be economic construction. The state’s role is not to replace markets, but to shape them so new entrants are not permanently priced out by history. Otherwise, born-frees inherit freedom but lease access to capital.

For my generation, the task is not to abandon BEE, nor to defend it uncritically. It is to complete it. The next phase of transformation must move from transactional equity to industrial capability — from boardroom symbolism to building businesses that export, employ and innovate.

I was born into a constitutional promise to “free the potential of each person”. Until the economy learns how to do the same, that promise remains incomplete.

This year, as B-BBEE comes under renewed scrutiny and major reforms are expected, the stakes are high. How South Africa retools empowerment now will determine whether political liberation is finally converted into economic participation — or whether another generation continues to manage a freedom that never fully learned how to produce.

• Mpetsheni is a chartered accountant working as a senior manager in audit who writes on corporate finance, economic policy, industrial development and transformation policy.