South Africa: BEE Policy Is a Hive of Obfuscation


There is only one certainty when it comes to the government's policy-making - that it will always be uncertain. My specific fascination has been the erstwhile, thankfully removed, minister of Trade and Industry Dr Rob Davies, specifically his empowerment legislation, which is as clear as mud.

It was never adequately communicated as to why the former minister of trade and industry Dr Rob Davies changed the BEE codes in 2013 to the ones that now deter foreign investment and discourage economic growth. The Department of Trade and Industry (dti) suggested that small black businesses were being charged exorbitant amounts for BEE certificates as a justification.

The most likely reality was that compliance levels were so high that black businesses were no longer able to compete for state contracts with their competitors whose ownership levels did not match theirs. Davies' solution was to launch a new phase of empowerment with exemptions for significant black ownership and a stick for those companies who chose to either have no black ownership or not meet the desired level of black ownership.

There was some method to this madness. Davies knew that corporate South Africa would never rock the empowerment boat. No large company was...

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