How many potential jobs has SA lost over BEE? IRR asks government

This week, the Institute of Race Relations (IRR) will be writing to key state ministries to ask hard questions South Africans deserve real answers to. Beyond the grandstanding and political games, it is time for answers about foreign businesses and investment opportunities the country has lost due to the barriers of BEE laws.

Says IRR Strategic Engagements Manager Makone Maja: “From the IRR’s calculations and estimates, the potential missed investment injections likely represent tens of thousands of unemployed South Africans who could have been placed in jobs, and families lifted out of poverty. This represents development gone down the drain that could have taken place in key sectors where skills transfers, and booming expansion of infrastructure, would massively transform key sectors in the country.”

The ministries the IRR will engage with on this matter include Employment and Labour, Trade, Industry and Competition, Small Business Development, and International Relations and Cooperation. These ministries oversee and administer the bulk of policies that have substituted the real empowerment that jobs offer with the hollow empowerment of BEE and its impact on the scale of multinational corporate activity in the country, in one way or another.

Says Maja: “The case of Starlink, recently prominent amidst tensions between Washington and Pretoria, exemplifies how BEE sacrifices the underprivileged on the altar of transformation. While other African countries that are similarly desperate for affordable internet access were selling out Starlink kits and rapidly expanding their online access, our government was turning this offer down under the guise of 'broad-based' empowerment of black people.”

After more than two decades of BEE, it is long overdue for the government to provide answers on the cost of its own policies – particularly given that most examples of the barrier BEE raises do not gain the same publicity as the Starlink saga has. South Africans deserve answers from the government on how many companies and businesses capable of crucial investments have been cynically denied value-add entry to the economy. Such investment could in the short term have created the jobs people need to earn a living and feed their families, and, in the long term, facilitated the development of critical infrastructure and much needed market competition.

Illustrating the human cost of BEE in the example of Starlink, it is no coincidence that the poorest provinces, the Eastern Cape and Limpopo, also have the least internet access, according to the Statistics South Africa General Households Survey of 2023.

These provinces also come last in having access to public Wi-Fi, which speaks to a lack of political will or state action to improve internet access for the impoverished, rural communities that make up the highest share of the poor population of the country.

“True economic empowerment would address these challenges instead of perpetuating the wealth disparities which BEE undeniably worsens. The BEE road to hell, perhaps once paved with good intentions, can no longer claim a destination of upliftment and prosperity. From the answers to the questions the IRR will put to key ministries, South Africans will be able to see for themselves how, when faced with choosing either Blatant Elite Enrichment for a few connected cadres or genuine upliftment for millions, the government has time and again chosen to keep aspirant job-creators and job-seekers trapped in poverty only to further enrich those at the top.”

Maja concludes: “The government must tell South Africans how many other times it has made this choice and how much longer it will keep doing so.”

Media contact: Makone Maja, IRR Strategic Engagements Manager Tel: 079 418 6676 Email: makone@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za