The Broad-Based Black Economic Empowerment (B-BBEE) Commissioner, Tshediso Matona, has raised concerns over the inadequate implementation and future of Black Economic Empowerment in South Africa. The remarks were made during a dialogue with the Black Management Forum (BMF), where the two entities signed a Memorandum of Understanding (MoU) aimed at safeguarding B-BBEE amid ongoing challenges.
B-BBEE’s Constitutional Mandate
The B-BBEE legislation was enacted under Section 9(2) of the Constitution to redress socio-economic imbalances created by apartheid and ensure economic opportunities for previously marginalized groups. However, 31 years into democracy and 22 years since the legislation’s introduction, Commissioner Matona noted that inequality, black poverty, and economic exclusion persist.
Challenges in Implementation
Matona highlighted that while some corporations have embraced B-BBEE, others have engaged in “gymnastics and tricks” to avoid full compliance.
“There are corporates who do this and believe in it, but there are others who didn’t buy into this… They engage in all kinds of tricks to game the system, to make an appearance as if they are complying when they are not,” he said.
He suggested that the legislation should have included stricter punitive measures for non-compliance, as the current framework lacks sufficient enforcement mechanisms.
Broad-Based Approach vs. Elite Enrichment
Initially, B-BBEE focused on equity ownership, but Matona explained that the policy evolved to include management representation, skills development, procurement, and socio-economic development to ensure broader impact.
However, he acknowledged that the broader aspects of B-BBEE lack visibility, particularly in rural development initiatives such as building clinics, schools, and infrastructure.
Who Has Benefited from B-BBEE?
BMF President Andile Nomlala cited research from Intellidex, revealing that more white millionaires have been created through B-BBEE transactions than black beneficiaries.
“The statistics tell us that we’ve created more white millionaires out of the same process meant to assist black people,” Nomlala said.
He attributed this to white-owned businesses retaining capital and control in transactions, with white lawyers, corporate financiers, and consultants benefiting disproportionately.
New Collaboration to Strengthen B-BBEE
The newly signed MoU between the B-BBEE Commission and BMF aims to:
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Develop strategies to advance economic transformation
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Implement nationwide awareness campaigns on B-BBEE
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Track and analyze ownership, management, and skills trends in public and private sectors
Conclusion
The dialogue underscored the need for stronger enforcement, transparency, and broader economic participation to ensure B-BBEE fulfills its original mandate. As South Africa continues its transformation journey, the partnership between the B-BBEE Commission and BMF seeks to revitalize the policy and address systemic inequities.