South Africa's Economy
Black Economic Empowerment
How Black Economic Empowerment policies aim to increase Black ownership and management in business, and debates about whether they helped many or a few.
Black Economic Empowerment (BEE) aims to redress apartheid’s economic exclusion.
How it works
- The BEE Act (2003) and Broad-Based BEE codes score companies on:
- Ownership by Black South Africans.
- Management representation.
- Skills development.
- Procurement from Black-owned suppliers.
- Scores affect eligibility for government contracts and licences.
Results
- Black representation in management and ownership increased.
- A new Black middle class grew.
Criticisms
- Early deals benefited a small, politically connected elite.
- Fronting: firms appointing Black people nominally to gain scores.
- Costs for businesses and reduced investment, some argue.
Broad-based focus
Later codes emphasised broad-based benefits like employee share schemes and skills.
Comparison
India’s reservation policies also aim to address historic exclusion, though through education and public jobs rather than business ownership.
A mining company sells a 26 percent stake to a Black-owned consortium to meet empowerment rules, but critics note the consortium's owners are a few well-connected businessmen.
Early deals favoured a small elite.
- BEE aims to increase Black ownership and management.
- Companies are scored for government contracts.
- A Black middle class grew.
- Critics cite elite capture and fronting.
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