BEE transformation is a divisive topic ahead of November’s all-important elections.
No wonder then that two diametrically opposed viewpoints landed recently on how to solve the issue. They both share the same diagnosis that empowerment in South Africa is broken. However, each holds a wildly different prescription on how to fix it …
On one side: President Cyril Ramaphosa has backed Trade Minister Parks Tau’s R100-billion BEE transformation fund. Labour experts are calling it the biggest shake-up to the sector in a quarter century. The idea is that companies can now simply pay money to a central fund and earn empowerment points (instead of doing all the other stuff). Critically, President Ramaphosa frames it as transformation evolution 2.0, not a retreat from the existing system.
BEE TRANSFORMATION VERSION 2.0
Meanwhile, Solidarity has released a report arguing South Africa could be ‘race-free by 2030.’ Its case rests on the same complaint everyone’s been making for years. BEE transformation is expensive and has produced only a tiny pool of politically connected winners. However, it hasn’t moved the unemployment needle in any meaningful way. As such, it wishes to see affirmative action given a hard sunset.
WEEKEND-VIEWPOINT- Broad-Based Black Economic Empowerment (B-BBEE) application to family farming under the AgriBEE Sector Code:
Moreover, it’s got numbers to back its assertion. It puts the BEE compliance drain on South African companies at R290 billion a year. And it reckons unemployment could fall from 32% to 17% with the removal of race-based legislation. In turn, its preferred replacements are employee stock ownership plans measured by genuine broad-based ownership rather than contrived racial scorecards.
BEGINNING OF THE END FOR BEE TRANSFORMATION
President Ramaphosa believes the R100-billion fund is not a retreat from BEE transformation, but rather an evolution.
Moreover, government’s own economists are quietly agreeing with Solidarity’s argument, in principle. Economists believe government doesn’t want to scrap BEE transformation entirely. Instead, it wants to give businesses an easier way to comply. Under the newly proposed system they’ll simply write a cheque to the fund, instead of the current rigmarole of finding black shareholders, then proving their worth through lengthy audits.
Meanwhile, data from XA Global Trade Advisors finds 37% of firms are non-compliant with BEE transformation anyway. And 67% have no BEE shareholders of any description. Solidarity quotes these figures as reasons why the government system should be abolished. Ramaphosa’s camp reads the same identical numbers as proof the framework needs to be “refined, reworked and strengthened.”
Farming and BEE Comments
Black Economic Empowerment, or BEE, is still one of the most talked-about parts of South Africa’s agricultural policy. The idea is straightforward: open up ownership, skills and opportunity in a sector that was once tightly held, without losing the food security, exports and jobs that farming provides. Farming looks different today than it did in 1994. There are more black commercial farmers now, more joint ventures, and more black-owned businesses in inputs, logistics and processing. Government land reform, private-sector partnerships and commodity organisations have all played a role. The Agriculture and Agro-processing Master Plan, or AAMP, also places transformation at the heart of its growth and job targets. But progress has not been even across the board. Many new entrants still struggle to get finance, secure water rights, find mentors and reach markets. Infrastructure gaps make it harder, and the PLAS land issue has been a drag. About 2.5 million hectares of government land is still without title deeds, which makes long-term planning and investment risky. Add to that port delays and municipal service gaps, and costs rise for everyone, especially emerging farmers. Where transformation is working, it tends to rest on a few practical things. Secure tenure or long leases give farmers confidence to invest. Real market access means there is somewhere to sell at a viable price. Technical support and mentorship reduce mistakes. Blended finance from banks and development partners, contract-farming deals with agribusiness, and farmer-to-farmer learning have all helped. Cooperatives and commodity groups also matter because they make inputs cheaper and training easier to access. The conversation is now shifting from compliance to results. The focus is on getting land out with title, fixing rural roads and ports, speeding up seed and cultivar approvals, and building trust between government, business and farmers. If those pieces line up, transformation and growth can move together. More farmers can produce more, employ more people, and supply both local shelves and export markets. Most in the farming community are pragmatic about it. Transformation is necessary, but it has to go hand in hand with productivity. When policy, finance and know-how are aligned, BEE stops being a box-ticking exercise and becomes a way to grow a bigger, more inclusive agricultural economy.
