At last it seems common sense, that rare trait, has visited protagonists in the debate about the country’s broad-based BEE (BBBEE) policy.
In about the past year this debate has been characterised by emotive, polarising statements and scurrilous accusations and counteraccusations about what BEE was supposed to be, what it is, and its achievements and failures.
For much of that period the dominant narrative was dominated by the policy’s opponents. The return of Donald Trump to the White House as America’s 47th president bolstered this camp. Soon after assuming office, he set his sights on South Africa, framing South Africa’s BEE law as discriminatory legislation before imposing punitive 30% tariffs.
His recruitment of Elon Musk, the South Africa-born billionaire and owner of the X platform, also bolstered the local anti-BEE lobby. Using personal grievance as a proof point of what he regarded as a racist policy, Musk used his short-lived stint as US government efficiency czar to discredit the policy and attempt to strong-arm Pretoria into ditching it.
Reluctantly, beneficiaries of BEE have ditched their diffidence and stiffened their spines in defending the economic redress policy. Even the professional class, beneficiaries of employment equity and affirmative action, weighed in on the debate. This class is known for its overly cautious approach to taking uncomfortable positions.
In the past few months some black oligarchs have been stating openly that BEE is (still) needed, while conceding that its implementation has been sub-par, resulting in unintended consequences.
Missing from the conversation has been the voice of large, established business shareholders, investors and CEOs. Yet they too have benefited. First movers gained handsomely from the advantage of access to government contracts and the ability to fine-tune transactions over time.
In the past few months some black oligarchs have been stating openly that BEE is (still) needed, while conceding that its implementation has been sub-par, resulting in unintended consequences.
Understandably, the government has been singled out for much of the blame for what has gone wrong. Even before the hollowing out of its capacity, the government outsourced a lot of the functions it ought to have performed as part of the process.
There were two other glaring failures. The government failed to adequately capitalise the National Empowerment Fund, its only agency with an explicit mandate to finance BEE, and, critically, it didn’t appropriately resource the BBBEE Commission, the watchdog body charged with clamping down on offenders such as fronting schemes.
As an afterthought, the government decided to use procurement as a BEE tool. But, as is its wont, the custodian of state procurement was placed in the National Treasury, not the department of trade, industry & competition.
This lack of co-ordination between BEE, employment and procurement ensured things fell into cracks. This fragmentation happened even though the ANC, the leading party in the government of national unity (GNU), leads all the economic cluster ministries.
For example, if the BBBEE Commission had proper resources, including procurement and BBBEE monitors, would Vusimuzi “Cat” Matlala or Katiso “KT” Molefe have happened? Also, the current administration hasn’t always been vocal about championing BEE, which in part explains why the anti-BEE lobby has often felt emboldened.
Even with a shrinking ANC, scrapping BEE will be almost an impossibility. The law will have to be repealed in a hung and chronically divided parliament.
The use of the courts has been another tool employed to frustrate BEE, but there is thankfully an emerging, albeit fragile, consensus about what needs to be done. It is clear that BEE policy needs to be reviewed. Only a fringe believes it needs to be scrapped.
Even with a shrinking ANC, scrapping BEE will be almost an impossibility. The law will have to be repealed in a hung and chronically divided parliament. The more sensible faction in the debate recognises the need for an overhaul and system reset. Crucially, they also agree about the primacy of facts and evidence.
The key lesson from the 1990s negotiation process to achieve democracy was that it was inclusive and not anti-facts or a hugger of alternative facts. The forums were star-studded and well-resourced by both public and private sectors. The outcome wasn’t known. But patriotism and clear-minded political leaders appeared to be the glue that kept it all together.
This makes today’s conversation all the more important. Even though South Africa has an elected parliament and government, legitimacy cannot be assumed. Ordinarily, this should have been sufficient. In today’s South Africa, it can’t be enough.
Common sense suggests that the government cannot be relied on to lead this review. The recent past has taught South Africans that the GNU is more of a tactical arrangement. Its constituent parties don’t hesitate to approach courts for the most minor of disagreements.
A government-led review is likely to be stymied by litigation from within and outside the GNU ranks. A well-resourced independent, multi-stakeholder review could help steer a sensible review of BBBEE.
• Dludlu, a former editor of Sowetan, is CEO of the Small Business Institute.
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