By: JN Reporter
Amid growing criticism of South Africa’s Black Economic Empowerment (BEE) policy, black business organisations - once seen as vehicles for transformation - are increasingly viewed as mere symbolic actors in a system that is now dominated by entrenched deviating interests that have granted them considerable visibility, but with little bite.
BEE was introduced as a transformative framework to address the economic disparities created by apartheid. However, it is now widely criticised for enriching the politically connected elite, while doing little to uplift the majority of black South Africans.
This scrutiny has intensified following a recent report by trade union Solidarity and the Free Market Foundation (FMF), who both claim that BEE compliance costs the country between R145 billion and R290 billion annually. According to the report, titled The Costs of BEE Compliance, these costs burden businesses without delivering meaningful economic inclusion.
In the wake of these revelations, prominent organisations such as the National African Federated Chamber of Commerce and Industry (NAFCOC), Business Unity South Africa (BUSA), as well as the Black Business Council (BBC) are now under fire.
Once champions of black entrepreneurship, they are now being labelled as toothless. They are deemed strong in rhetoric, but lack real influence or impactful results.
Speaking to Journal News this week, independent economist and Truckers Association of South Africa Deputy President, Tony Modise, said these organisations risk irrelevance if they fail to re-establish grassroots connections and move beyond political posturing.
“If these organisations are to remain relevant, they must re-establish grassroots connections and prioritise tangible support over rhetoric,” Modise said. He urges these bodies to offer tangible support by reinforcing conductivity in access to capital, mentorship, and market opportunities, instead of just issuing press statements.
“Organisations such as NAFCOC, Business Unity South Africa, and the Black Business Council have an important role to play in shaping an inclusive economy. While some of these organisations have provided meaningful platforms for policy engagement and enterprise development, others appear to have become bureaucratic or politically co-opted. The trucking industry, particularly among small and emerging black owned operators, often feels underrepresented in these forums,” said Modise.
As the country grapples with slow economic growth and high unemployment, the role of black business organisations is again under the spotlight. Without a shift towards meaningful engagement and accountability, their presence may continue to be symbolic—loud, but without bite.
While taking stock of these catastrophic failures, Modise did also defend the BEE policy with a degree of impartiality. He argues that dismissing it as a complete failure overlooks some of its genuine achievements.
“There is no denying that corruption and fronting have undermined the legitimacy and impact of the BEE policy. In some cases, empowerment has been limited to a politically connected elite, while the majority of black owned small businesses, especially in sectors like ours, continue to struggle.”
He adds: “Labeling BEE as a complete failure, however, overlooks some of its genuine gains. The challenge is not the policy itself, but the lack of robust monitoring, enforcement, and consequences for abuse. Where the system is manipulated, transformation stalls. Accountability must be central to BEE if it is to succeed.”
Journal News’ requests for comment from a BBC spokesperson Masedi Sesele went unanswered, while BUSA’s Tambu Mutizwa stated that she is currently “off sick and would assist” upon her return to work.
Meanwhile, the Congress of South African Trade Unions (COSATU) has come out in defence of the BEE policy. The trade federation argues that the report lacked a breakdown supported by concrete research to show any financial burden on the state or evidence that B-BBEE has hindered economic growth and job creation.
COSATU’s Parliamentary spokesperson, Matthew Parks, said the report oddly cited statistics on overall and potential growth, but failed to establish a link between these figures and B-BBEE.
“It might as well have blamed constitutional democracy for South Africa’s economic challenges,” he remarked.
Parks further criticised the report for ignoring the persistent racial inequalities in the country, pointing to numerous employment equity studies that show that most senior positions in the private sector are still held by white males, and that economic ownership, including shares within the JSE, remain largely in white hands.
According to the report, the cost of BEE compliance is between R145 billion and R290 billion per year. It claimed that this has resulted in an annual reduction of 1.5% to 3% in economic growth and to an annual loss of between 96 000 and 192 000 jobs.
“Our findings show that BEE, as currently designed, is enriching a small elite while throttling economic dynamism and deepening unemployment,” said Dr Morné Malan, FMF senior associate and co-author of the report, while speaking at the joint press conference.
The study compares South Africa’s model with global affirmative action policies in Malaysia, India, Brazil, United States and Namibia, which supposedly shows that South Africa’s version is the most intrusive and economically damaging.
At the media briefing, the organisations claimed that B-BBEE benefits individuals largely captured by politically-connected elites as South Africa now ranks 139th in GDP per capita, down from 87th in 1994.
