S.Africa lost 3.8 million jobs due to BEE: The Big Black Scam of BLACK ECONOMIC EMPOWERMENT: BEE is bringing SA economy to its knees – FMF/Solidarity

(005875.811-:E-000062.43:N-AC:R-SU:C-30:V)   

12 June 2025

A new report provides devastating evidence that South Africa’s policy of broad-based black economic empowerment (B-BBEE) has caused serious damage to the country’s economy and to its population – while only enriching a small, politically connected elite.

This report was prepared in collaboration between the Solidarity Research Institute (SRI) and the Free Market Foundation (FMF) and also serves as a much needed and timeous criticism of Pres Cyril Ramaphosa’s recent statement that BEE policies are necessary and do not impede economic growth in South Africa.

According to the report, the annual cost of BEE compliance is between R145 billion and R290 billion. This represents 2% to 4% of South Africa’s gross domestic product (GDP). This burden on economic growth results in an annual reduction of 1,5% to 3% in GDP growth, and to an annual loss of between 96 000 and 192 000 jobs.

Over time, this impact has led to the loss of about 3,8 million job opportunities for South Africans.

“This huge economic cost is not simply the result of negligence or the mere poor implementation of a plan. It is a deliberate government policy that causes it,” Theuns du Buisson, economic researcher at the SRI, and co-author of the report said.

“It is irrelevant when someone then says BEE was introduced with good intentions. Today it serves as a mechanism to enrich the elite at the expense of our country’s economy and especially at the expense of its poorest citizens.”

The report shows how the policy places a particularly heavy burden on critical sectors such as mining and finance, while it deters foreign investment, encourages capital flight and stifles technological progress.

Although limited progress has been made when it comes to black ownership and skills development through BEE policies, these benefits are completely overshadowed by the adverse consequences of BEE, such as greater inequality, elite involvement in state capture and economic stagnation at a very large scale.

As a result, South Africa has fallen far behind other middle-income countries with which it was once economically comparable. South Africa’s policy is also without the necessary focus with which other countries following a similar approach to redress, drive such policies.

This enables the enrichment of a small elite.

According to Du Buisson, countries such as Brazil and the USA have also realised that this type of policy has become obsolete and are phasing it out.

“Moreover, in other countries affirmative action policies are precisely there to prevent discrimination, while in South Africa they in fact make discrimination compulsory.

“South Africa must now follow the path of the other countries and get rid of it. BEE has become an instrument that benefits a small, politically connected elite and has long ago stopped being a policy that could empower a disadvantaged society,” he said.

Some of the report’s main conclusions are:

– Annual BEE compliance costs: R145–290 billion (2–4% of GDP);

– Estimated annual loss in GDP growth due to BEE: 1,5–3%;

– Estimated annual loss of jobs due to BEE: 96 000–192 000 jobs;

– Total number of jobs lost due to BEE to date: approximately 3,8 million;

– No meaningful progress in reducing systemic inequality (Gini coefficient 0,62);

– South Africa’s international economic position has deteriorated;

– Overall inequality has not improved but has worsened;

– Without race laws, unemployment would have been 17%, rather than having increased to 31,9 %; and

– Since 2007 South Africa has lost economic growth of 69% (R5 trillion’s) potential economic growth due to race laws .

Solidarity welcomes the pressure being applied locally and internationally on the South African government to do away with this devastating policy – especially in a year in which South Africa is the host country of the G20 Summit.

Along with this report Solidarity calls on policymakers to immediately abolish the failed BEE policy and to replace it with a framework that promotes real economic participation without impeding economic growth.

See the attached report here.

Issued by the FMF and Solidarity, 12 June 2025

Source: https://www.politicsweb.co.za/documents/bee-is-bringing-sa-economy-to-its-knees–fmfsolida?utm_source=Politicsweb+Daily+Headlines&utm_campaign=a02c093bb3-EMAIL_CAMPAIGN_2025_05_29_11_20_COPY_01&utm_medium=email&utm_term=0_-59ed0c78cb-140246843

jlamprecht