ANC’s GNU partner suggests scrapping BEE to boost South Africa’s growth

The Freedom Front Plus has urged the removal of Black Economic Empowerment (BEE) and Affirmative Action (AA) policies, arguing that they are detrimental and obstruct economic growth.

The party said this during a debate in Parliament on measures to relieve the mounting financial pressure of living costs on households.

SHOULD BEE AND AFFIRMATIVE ACTION BE SCRAPPED? 

Black Economic Empowerment is a distinct economic policy that seeks to alter the structure of ownership and control in the economy. On the other hand, one of the cornerstones of attempts to transform the workplace is the affirmative action policy in South Africa, which was introduced in 1998.

There have been complaints and calls for the policy to be looked at again.

In 2022, anti-apartheid activist Barbara Hogan said BEE prioritises those with political connections and that the bulk of black South Africans remains unempowered.

“It became an excluding thing where only people with political connections and status could benefit from the policies and the bulk of black South Africans remained unempowered,” she said.

Meanwhile, FF Plus member of Parliament Philip van Staden said the policy introduced by the African National Congress (ANC) when it first came into power has done nothing but promote patronage to the detriment of the economy and the general population, which has been plunged into poverty. 

He said the only antidote to rising living costs, which is a given, is having a job with a steady income.
 
Further, van Staden cited a poll by a financial institution that showed that 55% of South Africans are currently unable to save and that 31% are not saving for their retirement at all. Moreover, 11% of the population spends more than they earn monthly. They survive on debt.
 
“So, it comes as no surprise that thousands of people who do have a pension fund have already applied to make withdrawals from their retirement funds with the implementation of the new two-pot system. The Government Employee Pension Fund (GEPF) received 17 000 such applications in just one week.
 
“This undeniably shows that South Africans are struggling financially. The Government of National Unity (GNU) is a ray of hope, but decisive action is needed to create more jobs. The country’s general unemployment rate has exceeded 44%. More than 64% of those aged between 15 and 24 are unemployed,” he said.

POLITICAL PARTIES AGAINST THE “CONTROVERSIAL” POLICIES

This is not the first time political parties and businesses have called for BEE and AA to be scrapped.

The Democratic Alliance (DA) and ActionSA have been vocal in urging government to do away with the “discriminatory” policies.

In 2023, the Constitutional Court declared the Department of Tourism’s “discriminatory” Tourism Equity Fund for granting relief only to businesses that were 51% black-owned unlawful.

The decision came after the department appealed against the 2021 Supreme Court of Appeal’s 2021 ruling in favour of AfriForum and Solidarity in terms of the use of black economic empowerment (BEE) as criteria for granting relief from the Tourism Equity Fund was unlawful.

At the height of the Covid-19 pandemic Mmamoloko Kubayi, the then Minister of Tourism, introduced the Equity Fund in 2020 as an institution that would only allocate loans and grants to businesses with at least 51% black ownership.