By Johnathan Paoli
President Cyril Ramaphosa has defended the country’s Equity Equivalent Investment Programme (EEIP) as a critical policy tool to reconcile the country’s imperative for economic redress while attracting sustainable foreign investment.
Writing in his weekly newsletter, Ramaphosa said empowerment laws, such as the Broad-Based Black Economic Empowerment (B-BBEE) legal framework, were not a burden, but a strategic asset that supported inclusive growth and long-term economic stability.
“Amongst the most salient features of our country’s empowerment laws are their practicality, feasibility and responsiveness to economic conditions without deviating from the objective of redressing the economic injustices of exclusion of the past,” Ramaphosa said.
The president’s remarks come amid renewed public debate around the EEIP, with critics saying it allows multinationals to bypass B-BBEE ownership requirements.
Ramaphosa pushed back against these claims, describing them as “factually incorrect”, and reaffirmed that the EEIP was firmly embedded in South African law.
“Some in the public space have recently sought to suggest that the EEIP represents a circumvention of B-BBEE laws and that it is a response to the conditions of a particular company or sector. Neither are factually correct. Firstly, the EEIP is not new and has been in existence for a decade. Secondly, there are stringent requirements for multinationals to participate,” Ramaphosa said.
The president said that South Africa’s empowerment framework was grounded in the need to meet two interdependent goals, namely, to achieve substantial change in the racial composition of ownership, control and management of the economy; and to promote inclusive and sustainable economic growth through the participation of Black South Africans, women and the youth.
Unlike rigid localisation laws in other emerging economies such as Nigeria, India or Malaysia, the EEIP offered multinationals flexibility.
It allows companies whose global policies prohibit the sale of equity in local subsidiaries to instead invest in skills development, enterprise support and socio-economic upliftment projects aligned with South Africa’s developmental priorities.
Ramaphosa described this as an innovative approach that enabled compliance while encouraging meaningful contributions to the country’s transformation agenda.
“By supporting firms with compliance, they are able to embrace empowerment as a meaningful investment in South Africa’s long-term economic stability. This is a sound strategy that recognises that a transformed South African economy is one in which their investments are safe and guaranteed,” he said.
The EEIP has played a crucial role in mobilising billions of rand in non-equity-based investments across sectors.
Major global corporations such as Hewlett-Packard, Samsung, Amazon, JP Morgan, IBM, and automotive giants like Toyota, Volkswagen, Nissan and BMW have all used the EEIP to support enterprise development, youth training and innovation.
One notable example is Microsoft, which in 2024 committed R1.32 billion over a decade toward skills development, supplier incubation and research in the Fourth Industrial Revolution.
Ramaphosa cited this investment as a model for how transformation and technology-led growth could successfully align.
“These firms have leveraged the EEIP to direct investment into local development, to incubate black, youth and women-owned businesses, and to fund skills development. This has in turn assisted the government in achieving a number of policy and infrastructure goals,” he said.
Ramaphosa stressed that all EEIP initiatives must meet strict government oversight requirements, ensuring alignment with national priorities and broad-based impact.
He also urged the public and private sectors to discard the false binary between growth and transformation.
“We must move away from the perception that we must choose between the two. Both are essential and mutually reinforcing.”
With South Africa seeking to expand its footprint in emerging sectors such as artificial intelligence, digital technology, advanced manufacturing and renewable energy, the president said that maintaining adaptable, but firm empowerment mechanisms, was essential to staying competitive.
“Our empowerment laws remain central to our goal of economic transformation in South Africa and are here to stay. As business and industry, as labour, and indeed as all of society, we should remain firmly behind these laws that are integral to undoing the injustices of the past,” Ramaphosa said.
Looking ahead, the president said the government would continue to refine the policy environment by reducing regulatory barriers, fostering innovation and encouraging partnerships that unlocked new growth opportunities, particularly for historically marginalised South Africans.
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