South Africa seeks to reform faltering Black empowerment system

By Nellie Peyton and Olivia Kumwenda-Mtambo

The head of South Africa’s flagship Black economic empowerment programme plans to introduce additional incentives and potential fines to improve corporate participation and curb exploitation of the system meant to tackle the country’s gross inequality, he said.

The African National Congress, which had ruled unchallenged for 30 years until it lost its parliamentary majority in May elections is under intense pressure to improve the lives of Black people left disadvantaged by decades of white minority rule.

The empowerment law enacted in 2003 created a scorecard system that encourages companies to hire and promote Black people by offering them tax breaks and access to government contracts.

Two decades later, unemployment is five times for Black people than for white people and income inequality is the worst in the world, according to the World Bank, and critics say the empowerment policy has not worked.

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