Business
Big changes proposed for BEE in South Africa and what they mean now
A long-debated policy enters a new phase
For many South Africans, BEE is one of those policies that sparks instant opinion. Some see it as essential unfinished business from the apartheid era. Others view it as flawed, abused, or overdue for reform. Now, the government has put a bold new idea on the table that could reshape how empowerment works in practice.
The Department of Trade, Industry and Competition has proposed changes to Broad-Based Black Economic Empowerment that would allow companies, including white-owned ones, to earn BEE points by paying into a massive R100 billion Transformation Fund aimed at supporting Black-owned businesses.
It is a move that has already reignited old debates and introduced new political fault lines.
How BEE works and why it is under pressure
BEE operates on a scorecard system. Companies earn points for things like Black ownership, management control, skills development, and buying from Black-owned suppliers. A strong score opens doors to government contracts and certain tax advantages.
The policy was designed to tackle the deep economic inequality left behind by apartheid. More than three decades into democracy, those gaps remain stark. The government’s latest employment equity report shows that white South Africans still occupy the majority of top management positions, despite being a small fraction of the population.
At the same time, criticism of BEE has grown louder. Detractors argue it has often benefited a politically connected elite rather than driving broad-based change. Some business leaders say it has become rigid and difficult to implement, especially for smaller firms.
International pressure has also entered the picture. Hostility from US President Donald Trump towards South Africa’s empowerment policies has added strain to diplomatic relations and is widely seen as part of the backdrop to heavy tariffs imposed on South African exports.
The transformation fund explained
The proposed Transformation Fund sits at the centre of the draft amendments. Instead of changing ownership structures or management teams, companies could choose to contribute financially to the fund in exchange for BEE points.
That money would then be used to finance Black entrepreneurs and Black-owned businesses across the economy.
Trade and Industry Minister Parks Tau has described the amendments as the start of a broader review of transformation policy. The proposals are now open for public comment for 60 days before any final decisions are made.
Supporters say the fund could unlock large-scale funding for Black businesses that struggle to access capital. Critics worry it could become a pay-to-comply option that weakens the original intent of BEE.
Political fault lines and public reaction
President Cyril Ramaphosa and the ANC have doubled down on the view that BEE remains necessary to correct historic injustice. Within government, however, unity is not guaranteed.
The Democratic Alliance, the ANC’s coalition partner, has rejected the idea outright. The party opposes race-based economic interventions and has warned that the fund could turn into a slush fund if not tightly controlled.
On social media and talk radio, reaction has been predictably mixed. Some commentators welcome the flexibility for businesses and the potential cash injection into Black entrepreneurship. Others fear it lets companies buy their way out of meaningful transformation.
What happens next
For now, nothing has changed. The amendments are still in draft form, and the public comment period will likely draw strong responses from business, labour, and civil society.
What is clear is that BEE is once again at a crossroads. The debate is no longer just about whether transformation is needed, but about how it should be funded, measured, and enforced in a South Africa still wrestling with inequality, economic growth, and global pressure.
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Source: Daily Investor
Featured Image: Moneyweb
