Review of BBBEE in Trade, Industry and Competition Committee Reports

Dear Editor

The Democratic Alliance (DA) successfully secured the inclusion of a recommendation for a review of the Broad-Based Black Economic Empowerment (BBBEE) legislative framework in two reports adopted this week by the Portfolio Committee on Trade, Industry and Competition.

The committee’s strategic and annual performance plan report notes that while the private sector has spent over R116 billion on Enterprise and Supplier Development and R186 billion on skills development since 2021, elite capture and limited broad-based impact persist. It calls for a comprehensive review of BBBEE to assess its effect on the economy and job creation.

The DA calls for this review to be undertaken by an independent body to avoid entrenching vested interests and repeating past mistakes. The review is especially urgent as the department prepares to launch a “Transformation Fund”—a move that risks doubling down on a policy that has failed to deliver true economic transformation.

The committee’s second report, on the department’s second and third quarter performance, recommends “initiating a review into the effectiveness of the Broad-based Black Economic Empowerment regulatory framework and its impact on investment, business growth, job creation, innovation, new market entrants and the levels of competitiveness in the economy.”

This follows Minister Parks Tau’s recent comments in committee that he wants to examine “what works and what doesn’t” regarding transformation.

Coinciding with these developments, a News24-commissioned Ipsos poll released today found that fewer than half of South Africans support retaining BBBEE in its current form.

The unanimous adoption of these reports reflects cross-party agreement: BBBEE, in its current guise, has failed to achieve its stated goal of broadening ownership and opportunity to the black majority. After 20 years, structural issues remain: high unemployment, low fixed investment, and the dominance of key sectors by a few large players.

According to Stats SA, the unemployment rate for Black South Africans stood at 35.8% in Q4 2024, compared to just 6.7% for White South Africans. Over the past decade, black unemployment has risen by 8.6 percentage points, while white unemployment has dropped.

BBBEE has fostered rent-seeking, fronting, and high premiums on imported goods rather than genuine enterprise development. Many so-called empowerment deals benefit institutional investors more than the unempowered.

South Africa needs a bold rethink of how to stimulate inclusive growth, not another attempt to salvage a policy that has not worked.

Regards

Toby Chance MP
DA Spokesperson on Trade, Industry & Competition