Black Economic Empowerment has not added any value to the
South African economy and should be scrapped and replaced with a more
integrated business development policy, according to political economist Moeletsi
Mbeki.

Mbeki, a long-time critic of the legislation – which was
designed to address the inequalities of apartheid and drive economic redress by
increasing the participation of black people in the economy – reiterated his
rejection of the policy on Thursday.

“BEE, in my view, has been a disservice to the economy
of South Africa,” said Mbeki during a dialogue on Broad-Based Black
Economic Empowerment (B-BBEE) hosted transformation consultancy
BEEnovation. 

The discussion took place amid increased pressure on the SA
economy from the effects of Covid-19.

Failure

Mbeki believes that the legislation should be
“scrapped” and replaced by an integrated development programme which
will benefit all South Africans irrespective of race.

He argued that the failure of the legislation was evident in
the country’s high unemployment rate, which has continued to soar despite
the distribution of large empowerment deals to the connected elite.

The Covid-19 pandemic has revived debate around the
legitimacy of the legislation, including a failed legal bid by trade union
Solidarity and its associate, AfriForum, challenging the application of B-BBEE provisions in
the distribution of R200 million relief funding for tourism companies.

The court case was followed by remarks by Finance Minister Tito
Mboweni in Parliament, saying government has a responsibility to support
businesses regardless of the race of their owners during the pandemic.

This was in contrast to earlier comments by Tourism Minister
Mmamoloko Kubayi-Ngubane.

Critics of empowerment legislation had in the past described
it as a form of racism, saying it had failed to create new industries.

Transformation still necessary

But Duma Gqubule, the founder of the Centre of Economic
Development and Transformation, believes transformation is still a much-needed
tool to ensure equality and broader participation of black people in the
economy.

“Instead of scrapping BEE, we must look at ways of
strengthening it,” he said, adding that the focus now should be on stabilising
the economy.

“When you have a crisis, you can’t return to the old
crisis. Instead, we must use it to create a new future for our country.

“This coronavirus crisis has exposed so many fault
lines in our society, and inequality is one of them.”

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