BEE: EXPERT HIGHLIGHTS TRANSFORMATION FAILURE

Fri 30 May 2025:

Prof. argues that an overemphasis on ownership led to critical neglect of other BEE pillars, hindering broad-based success.

Black Economic Empowerment (BEE) has largely failed to achieve its broad objectives in South Africa due to an excessive focus on ownership quotas while other crucial elements of its scorecard were neglected, according to Professor Mthunzi Mdwaba, CEO of TZoro Global Advisory & Thuja and Chair of KasiKonnect. Mdwaba contends that this narrow application has prevented genuine economic transformation for the majority.

“The application of BEE in its broadness has failed us,” Mdwaba stated in an interview with Salaamedia. He pointed to the disillusionment among young South Africans, saying, “I have a lot of young people who say to me they hear about BEE, they hear about the economy, but they can’t touch it. There’s no way they can touch this economy because they can’t access it.”

The Perils of Narrow Implementation

Mdwaba, who was involved in drafting the Information and Communication Technology (ICT) charter in 2002, emphasised that the original goal was comprehensive. “As part of that process, we spent a lot of time going around the country trying to understand what the ills are that must be addressed, what the challenges are and how to get this economic development that covers everybody,” he recalled. “I want to repeat: economic development, emancipation and empowerment that covers everyone.”

However, he believes the implementation of BEE strayed from this holistic vision. Regarding the various components of the BEE scorecard, which include elements like skills development, enterprise and supplier development, and socio-economic development, Mdwaba observed, “These elements unfortunately have not been applied with the same passion and enthusiasm as the ownership one has been. That, for me, is the biggest problem.” This imbalance, he argues, is a primary reason for the policy’s shortcomings.

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The Broader BEE Debate

Mdwaba’s critique resonates with a wider debate about BEE’s effectiveness. Some argue that the current BEE model has predominantly benefited a “politically connected few” and “has failed to empower Black South Africans” broadly, instead empowering only an “elite.”

The discussion around BEE’s structure and efficacy is ongoing, as evidenced by recent proposed changes in the telecommunications sector. These proposals aim to provide alternatives to the strict 30% Black ownership requirement for companies like Elon Musk’s Starlink. These proposed amendments themselves have sparked controversy, with some lawmakers fearing they might undermine the original intent of BEE by favouring big business.

Mdwaba urges a return to foundational principles. “We need to start by going back to what the intention was,” he asserted. “When you seek to understand a legal policy, you have to go back to what was intended. Did we do what was intended? Was the objective met with reality and practical implementation? The answer here is no.”

He attributes this failure significantly to the lack of enthusiastic implementation of all BEE elements, particularly skills development. “We haven’t given the same enthusiasm to ensure that skills development is done in a way that is able to translate to employability so that we don’t have high levels of unemployment.” This widespread scorecard neglect, Mdwaba believes, lies at the heart of why BEE has not delivered on its transformative promise for all South Africans.