The Act was assented to on 7 January 2004 with the aim of establishing a legislative framework for the promotion of black economic empowerment as well as to empower the Minister of Trade and Industry to issue codes of good practice and to publish transformation charters. The Act recognises that in the past race was used to deny the majority of the population access to the formal economy’s resources and employment opportunities, including the opportunity to acquire advanced skills. As a consequence, black people were assigned to low-income occupations by default. The preamble goes further to indicate that if steps are not taken to address this race-based inequality the very future and economic prosperity of the Republic and all its people, regardless of race, may be in jeopardy. On the other hand, the question of enrichment versus empowerment quickly entered the mainstream BEE debate, as the political elites were in the main the major beneficiaries of the BEE deals struck to date. Ernst & Young revealed that 60% of the value of the total BEE deals struck in 2003 valued at R42.2 billion accrued to just two companies controlled by Patrice Motsepe, brother-in-law of another ex-politician become BEE entrepreneur, Cyril Ramaphosa, and yet another ex-politician, former Gauteng Premiere, Tokyo Sexwale. According to economist Azar Jammine many of these supposedly BEE companies are actually still being run by whites, and yes, you have got a nice *black+ guy at the top and couple of directors, but the actual businesses are still being run by white people, to me that’s not empowerment, that’s just enrichment – and it’s a very important distinction. Moeletsi Mbeki, brother of Former President Mbeki, considers BEE to be a white invention meant for “co-opting – and perhaps even corrupting – ANC leaders by enriching them as private individuals. The objective was to play on the leaders’ weaknesses of many years of deprivation in prisons and in exile by dangling in front of them unconceivable riches that would be given to Circle of Concern Magazine
them by the oligarchs, all for free.” The acuteness of this claim manifests itself in arguments that point out that, since only the political elite have materially benefited from the majority of BEE transactions to date, there is no such thing as a black middle class. Too few of the black masses have benefited from BEE equity transactions for such a phenomenon to arise. The development of a black middle class is not solely a function of BEE equity transactions alone, but rather of all the elements of BEE, i.e. employment equity, preferential procurement, enterprise and skills development. The black middle class was already in existence by the Eighties and comprised black professionals such as doctors in private practice and store owners. One need only look at the affluent parts of townships around the country as evidence of this, prime examples being Diepkloof Extension in Soweto and Hospital View in Tembisa.
Issue 3 | June 2014
Circle of Concern Magazine