ALAN BEESLEY: SA can no longer ignore the failure of BBBEE

Trade, industry and competition minister Parks Tau’s proposal for yet another “Transformation Fund” has reignited a long-standing debate about the effectiveness of SA’s BBBEE framework.

Shakespeare’s famous line from Hamlet — “To be or not to be, that is the question” — captures the gravity of the protagonist's existential reckoning. Similarly, SA faces its own pivotal question: to BBBEE or not to BBBEE? 

Introduced in 2003, BBBEE was meant to advance economic inclusion and undo the systemic exclusion of black South Africans by apartheid. Yet, after two decades, its failures are undeniable.

Expanded unemployment stands at a staggering 42%, inequality is at world-record levels, more than half of SA households face hunger and racial economic divides remain stark. The evidence is clear: BBBEE has failed to deliver on its promises. 

The reality of ANC economic empowerment 

In practice, BBBEE has primarily enriched a small, politically connected elite, turning what was intended as broad-based empowerment into ANC economic empowerment (ANC-EE). This system of cronyism has entrenched corruption, nepotism and cadre deployment at the expense of true economic inclusion. 

The costs to businesses striving for compliance are immense, with estimates placing them at up to 7% of profits. For companies already struggling amid SA’s stagnant economy, this burden is an unnecessary drag on growth. While the need for economic transformation remains urgent, the solution must foster genuine broad-based empowerment without stifling economic progress. 

Opportunity Fund — a new path to economic empowerment 

ActionSA has introduced a bold and innovative alternative to ANC-EE: the Opportunity Fund. Grounded in the core mandate of expanding access to opportunities, this initiative seeks to drive inclusive socioeconomic empowerment for those still burdened by the legacy of apartheid-era racial exclusion. It is designed to break down barriers that have perpetuated exclusion, transforming neglect into inclusion, dignity and shared prosperity. 

The Opportunity Fund would replace BBBEE compliance costs with a streamlined 3% tax on private sector profits, excluding SMMEs, for a limited period of 30 years. Special tax allowances and tax-free investments would encourage additional private-sector contributions. This structure would reduce financial burdens on businesses while driving impactful economic transformation. 

The fund’s expenditures would be strategically allocated as follows: 10% for education — investing in skills development and access to quality education; 30% for entrepreneurial funding — supporting small businesses and start-ups, fostering innovation and job creation; 35% for infrastructure development — building schools, clinics, public transport, housing and other facilities that expand economic access; 25% for sustainability investments — ensuring the fund remains a catalyst for lasting empowerment. 

To maximise efficiency, overlapping government agencies such as the National Empowerment Fund, sectoral education and training authorities, and the National Youth Development Agency would be dissolved, with their resources redirected to the Opportunity Fund. 

Choosing a future that works for everyone

The choice is clear: to persist with BBBEE is to accept a flawed system that has failed millions of South Africans. To reject it is to embrace an Opportunity Fund that offers a genuine chance to right the wrongs of the past and build an inclusive future. 

The Opportunity Fund represents a bold step towards economic justice. It will empower the marginalised, restore dignity through work and opportunity and chart a path towards true broad-based economic inclusion. 

This is not just about policy — it is about people. With the Opportunity Fund, ActionSA is committed to changing lives, not just legislation. It is time to leave behind what hasn’t worked and move boldly towards a new era of empowerment. 

SA’s moment of reckoning is here. Let us choose a future that works for everyone. 

• Beesley is an ActionSA MP.