By Lehlohonolo Lehana.
Minister of Trade, Industry and Competition Parks Tau has announced both a short-term and long-term review of SA’s Broad-Based Black Economic Empowerment (BBBEE) legislation.
This comes after BBBEE has come under increasing criticism from business leaders, lobby groups, and parties within the Government of National Unity (GNU).
Responding during a question-and-answer session to DA MP Toby Chance in the National Assembly, Tau detailed the dual-pronged approach aimed at refining and realigning South Africa’s economic empowerment framework.
He said the first phase will be a short-term review, focusing on refinement and review of subordinate legislation.
“This should be completed by the end of this financial year,” he said, adding that they have been in a process of consultation to finalise the Transformation Fund, and its implementation was also part of the review process.
Tau also said the second phase was a long-term review, which involved a review of the Broad-Based Economic Empowerment Act for substantive amendments.
The review of the Act aligned with South Africa’s growth and inclusion strategy of the government.
The path to economic growth, inclusion, and transformation is underpinned by broad-based economic empowerment through preferential self-performing policies. This approach helps create jobs in marginalised communities, strengthen local supply chains and ensure that economic benefits are widely shared, “he said.
“Therefore, reviewing the Act in the context of socio-economic shifts ensures that South Africa’s legal framework supports broader transformation, “said Tau.
BEE has come under increasing pressure in South Africa, with critics ranging from within the African National Congress (ANC) to business leaders and other political parties.
Much of the criticism is directed at making changes to how the government’s current BBBEE framework is implemented, with the focus being on limiting cronyism and corruption.
Tau’s previous critique and that of other ANC members fall into this category, with the party remaining dedicated to BBBEE and its implementation.
This is notable in that the ANC has historically refused to acknowledge criticism of BEE and famously snubbed opposition parties’ attempts to debate the issue.
The Solidarity Research Institute estimates that BBBEE costs South Africa around 3% of GDP a year in lost economic activity, which equates to R226 billion.