President Cyril Ramaphosa has strongly defended the government’s Black Economic Empowerment (BEE) policy, saying it is “empowering” previously disadvantaged groups.
Ramaphosa was responding to a question from DA leader John Steenhuisen in Parliament this week.
“BEE millionaires have used race as a means to hijack empowerment and have crowded out the 30 million people who live in poverty in this country. Race-based policies are tearing our country apart. Mr President, would you commit yourself to non-racialism and ensuring that we scrap all policies that seek to divide South Africans based on something as arbitrary as their skin colour?”
In response, Ramaphosa said the Constitution has provisions that seek to promote equality because apartheid privileged one race over another.
One race “continues to reap the benefits” of that privilege, he added.
“We cannot then say, when provision is made to lift up those who were unprivileged, that that in itself is a racist act.”
“Our government is not a racist government. Our government seeks to promote the rights and interests of all, the president added.
Ramaphosa said if the government takes steps to promote black economic empowerment, those who think that it is a racist policy would be wrong, adding that BEE should be embraced and applauded by all.
“I’m frankly surprised at those who, having enjoyed the privileges of the past regime, take umbrage [and] are very angry when those who have never enjoyed those privileges are lifted up.”
EU study highlights BEE constraints
Earlier this month, the EU-South Africa partners for growth project published results of a study looking at the effects of Broad Based Black Economic Empowerment (B-BBEE) in South Africa and the impact these policies have on international investment.
The study, funded by the European Union, found that South Africa offers many attractive assets for foreign investors, such as its diversified and advanced economy, its abundance of natural resources and its well-developed infrastructure.
Among the key findings were:
- The effects of B-BBEE implementation on the company are far-reaching, extending beyond the resourcing for a mere administrative exercise. The frustrations experienced in implementing B-BBEE range from ‘too many ambiguous and often-changing rules,’ to trying to stay focussed on business imperatives whilst attending to the intricacies of B-BBEE compliance.
- Costs incurred through B-BBEE were highlighted as a key challenge experienced by the businesses. Interviewees provided candid responses to the expenses related to B-BBEE and the resulting concerns about the financial viability of these costs, as well as the concerns around the sustainability of their businesses.
Investors are, according to the study, also concerned about the lack of clarity concerning policy and structural reforms.
They added that the policies often elicits a ‘deer-in-the-headlights’ response from even the most seasoned investors.
“As the proponents of B-BBEE sought to increase the regulatory and measurability aspects of B-BBEE, the policy, primarily effected through the B-BBEE Codes of Good Practice, has become rather convoluted and complex, often frustrating businesses rather than encouraging transformative practices.”
In June, responding to calls for BEE to be scrapped, President Ramaphosa argued that BEE should in fact be enhanced.