By Akani Nkuna
The Solidarity Movement has launched legal action against the Transformation Fund, condemning the initiative as yet another example of the ANC government’s alleged preference for racially discriminatory laws.
It argues that such policies marginalise minorities in South Africa, reinforcing divisions rather than promoting true equality and inclusivity.
“Through this legal process Solidarity is intensifying its opposition to this planned race fund which complies with all the characteristics of yet another enrichment scheme for the political elites, and one which cannot be afforded by an administration currently facing a budget crisis,” said Solidarity spokesperson Anton van der Bijl.
Earlier this year, Trade, Industry and Competition Parks Tau outlined his intent to facilitate discussions around the R100 billion Transformation Fund to reach a consensus on its implementation.
The fund has been punted as being essential for advancing South Africa’s constitutional commitment to economic redress and inclusive growth, which it is obligated to uphold.
During the contextualising of the fund, Tau said that it was “not about imposing new obligations but about ensuring that existing commitments under the B-BBEE legislation are strategically utilised to create meaningful economic transformation”.
“It embodies our constitutional mandate to achieve equality and empower historically disadvantaged communities.”
The Fund aims to drive economic inclusion by supporting black-owned businesses with financial and non-financial aid.
Additionally, it streamlines resources for greater impact, fosters growth in key sectors, expands market access through technical support and aligns with South Africa’s industrial policy to boost development in under-represented areas.
Solidarity claims that the government’s plans to raise R20 billion annually until 2029 to support black businesses through the Fund, compelling private sector contributions.
It further alleges that businesses that refuse to participate may face penalties, including fines or exclusion from government contracts.
“We are one of the countries in the world with the highest unemployment rates and which has the most race discrimination laws in the world. Our government contrives something new every day to make our country even more unpopular internationally,” said Bijl.
“Now it has been decided to make it even more difficult for South African companies to survive by establishing this mandatory race fund. Had it not been tragic, it could certainly have been dismissed as a joke.”
Solidarity says in its letter of demand that the fund is unjustifiable and unconstitutional, warning that “government would make itself guilty of abuse of power, ill-considered racial preference and the contravention of international conventions”.
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