LETTER: BEE bars investment, boosts poverty and fuels graft

Mamokete Lijane is right to ask “who pays for BEE and who benefits”, but she is wrong to be “ambivalent” about the issue (“Expropriation highlights tension between poverty and inequality”, February 22).

The government’s policy of economic discrimination against white Africans and white-owned businesses has been disastrous for the country, the economy and the wellbeing of most South Africans.

BEE, preferential procurement, affirmative action, the Employment Equity Act and race-based quotas, targets and charters all create an umbrella under which theft and corruption on a grand scale continue to thrive.

There is extensive evidence of this. Government, municipalities and state-owned enterprises (SOEs) all pay hugely inflated prices for goods and services, hampering service delivery and bankrupting several SOEs. This has led to destructive, often violent, service delivery protests and taxpayers having to dig deep to rescue SOEs. These policies contribute to the emigration of much-needed skills and capital, and are a major cause of  reluctance to invest.

Fifteen months ago EU chargé d’affaires Raul de Luzenberger identified BEE as the main barrier to investment by EU companies in SA (“BEE tops list of bars to investment by EU companies”, November 17 2020). no-one listened, and these job-killing policies remain.

There is another reason BEE must go. Using section 217 of the constitution the ANC ruled that all black South Africans had been subjected to “undue discrimination” and were thus entitled to preference in the procurement process. However in 2022 this is not true. Most South Africans living now, and most companies trading, were born after 1994. This means most black South Africans have been economically advantaged in terms of ANC policy and in law for their entire lives. Most whites have been similarly disadvantaged.

Certainly, a government that takes taxes from companies and then refuses to do business with them (or help them in times of a pandemic) because of the owner’s skin colour is guilty of undue discrimination. It is true that millions of black South Africans are unemployed and live in poverty, but this is because of, not despite, the ANC’s race-based policies.

No action the government takes would reduce unemployment more decidedly than scrapping the burdensome BEE and preferential procurement policies, especially as they affect small businesses.

Peter Samson
Wynberg

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