The ANC has vehemently rejected the DA proposal to eliminate South Africa’s Black Economic Empowerment (BEE) policy, reigniting tensions within the Government of National Unity (GNU).

This latest clash between the two largest partners in the GNU appears to have exposed deep ideological divisions, with the ANC doubling down on its commitment to BEE and stating unequivocally that the legislation will not be removed.

President Cyril Ramaphosa, speaking in his capacity as ANC president during a visit to Soshanguve in Pretoria on Monday night, made it clear that any amendments would need to align with the policy’s constitutional underpinnings.

“Currently, we have a BEE policy that is rooted and underpinned by our Constitution, so if anyone wants an amendment to the BEE Act, they must table their proposals, and they must be taken for discussion in Parliament. At the moment, BEE policies, legislation, and regulation apply, without any dilution whatsoever.”

The DA’s Economic Inclusion for All Bill, introduced to replace the existing BEE policy, aims to remove race as a determining factor, and replace it with a needs-based approach. 

The party argues that BEE, since its introduction in 2003 as a redress policy for apartheid-era economic inequalities, has been ineffective and has primarily benefited a connected elite, leaving the majority of South Africans impoverished and unemployed.

ANC spokesperson Mahlengi Bhengu, however, launched a scathing critique of the DA’s intentions. 

“The DA foresees a South Africa that is without transformation laws starting with B-BBEE (Broad-Based-Black Economic Empowerment)… This is an idea that has to be challenged by any democracy-loving people and patriots. Many of whom are beneficiaries of this particular policy,” Bhengu said. 

She highlighted the rise of black individuals in corporate and public sectors, including women in CEO positions, as proud beneficiaries of BEE. 

Bhengu further reiterated the ANC’s stance that they were open to any discussions but were not willing to scrap the policy.

“We are a country that is founded in the culture of dialogue, and if the DA was sincere about their intentions, they would be part of the national dialogue process, which they have boycotted and abandoned. But the ANC is willing to engage.

“However, what I want to stress is that there won’t be a day in South Africa where BEE is scrapped as legislation. Amendments are acceptable as long as they do not deviate from the substance of that legislation,” she said.

The Congress of South African Trade Unions (Cosatu) has also vehemently rejected the DA’s call, describing it as “naïve” and questioning who would benefit from it.

“Cosatu remains a steadfast supporter of BEE’s progressive objectives, asserting its fundamental necessity in a country still grappling with the legacies of systematic discrimination. 

“As long as South Africa remains scarred by the painful legacies of exclusion, then transformation legislation such as B-BBEE and Employment Equity will continue to be critical tools to overcoming our still entrenched levels of poverty and inequality,” the federation’s spokesperson Matthew Parks said.

The trade union federation dismissed claims that BEE has primarily enriched a few politically connected individuals, calling them “long debunked fairy tale claims”. 

Cosatu pointed to the success of Employee Shareholder Ownership Programmes (ESOPs) as a key component of BEE, which has enabled 500,000 workers of all races to become shareholders, boosting their incomes and promoting inclusion.

The DA’s proposed bill seeks to amend the Public Procurement Amendment Act of 2024, repealing race-based preferential procurement and introducing an outcomes-driven system focused on job creation, poverty reduction, skills enhancement, and environmentally sustainable practices.

 Their alternative scorecard includes “Value for Money” (80%), “Economic Inclusion” based on UN Sustainable Development Goals (20%), and “Disqualification Criteria” for fraud or corruption.

Mat Cuthbert, DA head of Policy, argued that the ANC’s policy is “only for cadres”, while the DA’s emphasises needs-based empowerment and promotes social impact and value-for-money. 

“Despite growing evidence of BEE’s failures, the ANC continues to defend it due to its vested interests. One only needs to look at their President and much of the senior leadership to realise this,” Cuthbert said.

Political Analyst Sandile Swana offers a different perspective on BEE’s origins and efficacy. 

He argues that the foundations of what would become BEE were laid in the 1970s by American corporations and white South African businesses like Anglo and Sanlam, not the ANC. 

These early initiatives, he contends, aimed at creating a black elite to defend capitalism and, to a degree, white privilege. 

“So what the ANC did in 2003 was simply to take what was practiced widely and voluntarily by white monopoly capital and actually formalise it into law in South Africa so that every company, nationally or internationally, could follow the same principle. So ANC did not invent BEE but quantified it… so the inventors of BEE were the whites,” Swana explained.

Swana further argued that the DA’s proposals were “peripheral”.

“BEE cannot change the GDP growth rate… There are other macro policies that developed the Chinese economy and other economies that have nothing to do with BEE.”

Swana suggested that the DA’s approach to procurement, as seen in the Western Cape, has worsened black unemployment.

mashudu.sadike@inl.co.za

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