By Thebe Mabanga
The Democratic Alliance (DA) has formally called for the scrapping of Black Economic Empowerment (BEE), including all references in legislation, and the dissolution of the BEE Commission within 12 months.
The party blames the policy for South Africa’s high unemployment, poverty, corruption, hunger, and malnutrition.
In its place, the DA proposes the Economic Inclusion for All Bill, which focuses on preferential procurement, especially by the State, and specifically targets Section 217 of the Constitution, which calls for fairness and transparency in the procurement of goods.
“This bill aims to replace years of ineffective ANC empowerment policies that have left the majority of South Africans unemployed, impoverished, and hopeless,” said Mat Cuthbert, a seasoned public policy expert who serves as the Head of Policy.
The party claims the proposal aligns with the United Nations’ Sustainable Development Goals (SDGs), though it does not specify which goals or cite examples of other countries that have successfully used SDGs to redress historical inequality.
Cuthbert cited research by academic William Mervyn Gumede, who stated that since 1994, fewer than 100 black people have received R1 trillion through BEE, reinforcing the view that BEE has benefited a tiny minority.
According to a 2015 report by Krutham (formerly Intellidex), The Value of BEE Deals, the total value of active BEE deals between 2004 and 2014 was estimated at R317 billion, which accrued to black employees, community groups, and investment consortia.
Cuthbert also referenced the controversial Transnet 1064 locomotive contract, in which Transnet allegedly inflated the 2014 procurement contract from R39 billion to R54 billion to favour Chinese suppliers and channelled over R6 billion in kickbacks to Gupta-linked companies under the guise of transformation.
However, he did not mention successful examples, such as the Passenger Rail Agency of South Africa (PRASA), which spent R51 billion in 2013 to procure 600 modern trains from Gibela, a consortium including Alstom and local empowerment partners, delivering 60 trains per year from its Nigel factory, or the seven successful bidding windows for renewable energy concluded with empowerment partners or black-owned firms since 2013.
The DA’s proposal does not address ownership, management, or control, which are key pillars of the BEE framework, and seeks to abolish the existing seven-pillar scorecard.
Its alternative scorecard comprises three components: Value for Money, which accounts for 80%, Economic Inclusion, which accounts for 20%, and Disqualification Criteria, which considers a bidder’s track record on delivery and corruption, though it seemingly carries no weight.
“The DA’s approach to empowerment fundamentally differs from that of the ANC. While the ANC’s policy is only for cadres, the DA’s policy demands no political connections. Under the ANC, race is the sole criterion, whereas the DA emphasises needs-based empowerment,” Cuthbert said.
Referring to South Africa’s deepening economic crisis, Alexandra Abrahams, DA National Spokesperson on Social Development, said: “This is not just an economic crisis, but a human one, a deeply personal and painful one.”
She pointed out that 12 million South Africans are anxious about livelihoods due to unemployment and noted growing food insecurity and malnutrition, though she did not explain how BEE specifically contributes to these issues.
Dr Ivan Meyer, the DA’s Federal Chairperson, noted that the proposal is “not just a
policy choice but South Africa’s chance at economic justice, real empowerment and
shared prosperity.”
The party also used the opportunity to outline a future in which it leads government.
”South Africans deserve better, and under a DA-led national government, they will get it.”
Cutberth said.
For now, the DA expects the ANC to back its proposal or to get support from other parties in parliament, presumably including those outside of parliament.
The DA expects the new bill to be implemented by the Department of Trade Industry
and Competition (DTIC), which was one of the key contested portfolios during
negotiations for the Government and National Unity (GNU).
The DTIC is currently headed by Parks Tau, a fervent proponent and architect of BEE
who is backed by officials such as BEE Commissioner and former Director General,
Tshediso Matona, who are likely to give the proposals short shrift or outright dismissal.
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