Finance Minister Enoch Godongwana has emphasised that Black Economic Empowerment (BEE) remains a constitutional imperative to address the imbalances of the past.

Speaking at the end of the two-day Nedbank Top Empowerment Conference in Sandton, Godongwana says BEE has become increasingly unfashionable to the extent of being the subject of abuse and attack.

The minister highlighted that the debate has become very polarised, as some argue that empowerment policies are costly.

He warned that some criticisms carry racist undertones.

Godongwana’s comments come amid renewed debate over whether empowerment policies help or hinder economic growth.

He rejected the suggestion that transformation and growth are mutually exclusive, saying structural transformation is also necessary.

“Our economy has been concentrated, and that has suffocated emerging small and medium enterprises. But everybody is doing some work on the small and medium enterprises, but we’re not seeing the impact. It’s going to be important that we have some collective work and coordination between the different constituencies, business, government and everybody who is involved in this sector.”

While noting the debate on empowerment is polarising, the minister acknowledged that there are some who treat the policy as beyond scrutiny.

“There’s another extreme on our side that sees black economic empowerment like a religion, as if it does not have any weaknesses. After 30 years, we need to sit down and examine the unintended consequences of black economic empowerment. There’s nothing wrong with posing that question as part of the discussion, which we should be doing. But keeping BEE on track is a fundamental policy objective enshrined in the constitution.”

Godongwana says the next challenge is to attract investment after winning the approval of rating agencies. He says the recent moves suggest financial markets are beginning to recognise the progress made by the government over the past five years.

“So, we’re going to focus on investment and growth. We defined four pillars for ourselves to achieve this objective. Macroeconomic stability and that macroeconomic stability is being rewarded by the markets. As I’ve indicated, structural reforms are beginning to bear fruit. We’re investing in infrastructure. We are placing about a trillion rand on investment. The key question is, are we having the quality impact? That’s the challenge we’re going to be talking about.”

Two hundred and seven billion rand of the R1 trillion infrastructure spend is set to go to municipalities over the next three years.

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