Charles Webster
I see commentary on Black Economic Empowerment (BEE) has reignited a familiar argument: that BEE is responsible for South Africa’s sluggish growth, high unemployment, investor flight, and worsening inequality.
This argument is at best partially right. While it is true that BEE has not worked as intended, it is simultaneously historically disingenuous to place the blame for sluggish growth solely in its lap. To some extent, this argument confuses correlation with causation. It also obscures the wider roots of South Africa’s economic malaise, and overlooks one essential fact: BEE, in principle, is no different from what came before it — except in who it tries to empower, and for what reasons.
White Economic Empowerment Worked
Before BEE, South Africa operated under a vast, state-orchestrated programme of white economic empowerment. For decades, the state directly and indirectly enriched white citizens through policies that dispossessed, excluded, and disempowered the black majority.
The 1913 Natives Land Act barred black South Africans from owning most land. The 1926 Mines and Works Amendment Act instituted job reservation for whites. State institutions like ISCOR and Eskom were built to benefit white capital. Education, credit, infrastructure, and labour rights were all racially skewed. The results were effective: by 1994, a small white minority had amassed a huge and disproportionate share of the country’s wealth, assets, and skills — all with decisive help from the state.
If BEE is being judged by whether it empowers a group economically, white economic empowerment is the clearest proof that such efforts can succeed — if backed by state will and properly structured systems.
And as Sean Stevens points out, BEE has played a pivotal role in creating a growing Black middle class of previously disadvantaged individuals who now own property, vehicles, and businesses. These citizens are making significant contributions to the economy—not just through their labour, as in the past, but also through increased spending power and asset ownership. It’s just sad that this benefit has been minimised by the inept ANC.
Claims of “reverse racism” and “oppression” by white South Africans are illegitimate and disingenuous given that BEE is not ideologically predicated on white inferiority and white people still experience only a small fraction of the poverty and unemployment faced by black South Africans, both in absolute and proportional terms. But the reality is that 30 years of ANC mismanagement have severely undermined the impact of BEE and as a result, BEE may need to remain in place longer than would have been ideal. In the meantime, the reality on the ground prolongs the frustration of black South Africans who have yet to see the transformative change they were promised, while simultaneously giving white right-wing figures a pretext to weaponise BEE for political gain.
The Issue Is Not BEE — It’s How It’s Done
To point out that BEE hasn’t yet created inclusive prosperity is correct. But to conclude that BEE is therefore inherently harmful is a bit like blaming the idea of medicine for the failures of a corrupt healthcare system.
The real problem lies in how BEE has been implemented:
– Narrow empowerment of a politically connected elite has crowded out broader participation.
– Compliance checklists and scorecards have encouraged fronting and cosmetic changes rather than real transformation.
– Lack of synergy with education, infrastructure, and entrepreneurship support has made many BEE gains unsustainable.
– Poor governance and corruption have undermined the credibility and impact of well-intentioned policies.
But these failures are not unique to BEE — they are symptoms of deeper institutional decay across government and state institutions. We do not abandon public healthcare because hospitals are mismanaged. Nor should we abandon empowerment because it’s been poorly managed.
BEE Is Not the Sole Cause of Economic Decline
Critics often cite South Africa’s declining GDP growth, rising inequality, and unemployment as evidence of BEE’s failure. But this argument ignores global and local economic dynamics that have nothing to do with empowerment policy.
South Africa’s growth has been hampered by:
– Load shedding and Eskom’s collapse,
– Dysfunctional rail and port infrastructure,
– Soaring crime and security costs,
– Policy uncertainty and slow reform implementation,
– Global shocks like the 2008 financial crisis and COVID-19.
Yes, investor confidence has wavered. But that has a lot to do with energy insecurity, corruption, and governance failure, too.
We Need a Better BEE, Not No BEE
South Africa remains one of the most unequal countries in the world, and that inequality is still largely along racial lines. Ignoring this reality is both morally bankrupt and economically short-sighted. Inequality fuels instability, undermines consumer demand, and limits long-term growth.
We need to reform BEE, not abandon it:
– Focus on broad-based ownership, small business development, and access to finance.
– Shift away from passive ownership targets and toward active skills development and innovation.
– Incentivise transformation that delivers real economic inclusion, not just compliance.
– Invest in education, infrastructure, and enterprise development as complements to equity reform.
In other words, make BEE less about enriching a few, and more about enabling the many.
A False Dilemma
The idea that we must choose between BEE and growth is a false dichotomy. There is no long-term economic success in South Africa without broader economic inclusion. Empowerment is not the enemy of growth — it’s a precondition for sustainable growth in a democratic society.
Let us stop pretending that the alternative to BEE is some “neutral”, merit-based market (which favours those who already have power and capital). The economy we inherited was never race-neutral. It was structured, by law, to benefit a select group. We are still living with the consequences of that system.
BEE, imperfect as it is, is an attempt to redress that legacy. It must be fixed, reimagined, and improved — not scrapped.
Because if we do not correct historical injustice through policy, we will eventually correct it through crisis. And no investor wants to be around for that.
