Stubborn unemployment crisis puts BEE on 2024 chopping block

The latest unemployment statistics presented in Stats SA’s Quarterly Labour Force Survey (QLFS) are another reminder that race-based policies, like BEE, have failed, and that the 2024 election is likely to be a referendum on 20 years of BEE failures.

BEE and other race-based policies have only entrenched crony-capitalist business practices and increased the stakes for those with political connections, while the vast majority of South Africans have been trapped within the resulting framework of little or no economic growth. Unemployment data shows the number of South Africans excluded from economic opportunities remains stubbornly high.

In 2003, the year BEE became law, 3.7 million South Africans were unemployed. Today, 16.3 million are unemployed.

South Africans know that one of the pillars of the ANC approach to employment policy has been BEE, most recently ramped up to be “more aggressive” – as recommended by Minister of Employment and Labour Thulas Nxesi – through the amendment of the Employment Equity Act (EEA).

Policy must be judged on its outcome, not its intention, and it is clear that the outcomes of BEE policies and legislation have been poor. In the past twenty years, since BEE became law, we have seen no reduction in overall unemployment, youth unemployment or black unemployment. The ANC, far from learning from its BEE mistakes, is going into next year’s election promising more aggressive BEE.

Analysing unemployment across racial lines over the past 20 years also provides a clear indication of the unemployment crisis that South Africa finds itself in.

For example, in 2003, the rate of black unemployment was 29.2%. In the intervening 20 years it has grown by just over 27.4%, to 37.2%, further proof that race-based policies such as BEE are failing their intended beneficiaries.

The amendment of the EEA provides for “more aggressive” race-based policies, which are a proven failure. Enforcing more race laws will not solve the poverty and inequality that afflict previously disadvantaged groups. Instead, it will make things worse.

Notably, the report of the Zondo commission into state capture said of race-based policies that “evidence shows that the ideals of [black] empowerment were grossly manipulated and abused to advance the interests of a few individuals”.

The IRR will shortly be writing to Minister Nxesi requesting an urgent meeting to try to understand on what basis government believes an intensified BEE approach will reverse the worrying unemployment trajectory South Africa has been on since introducing this race-preferencing policy.  

The IRR has formulated the Economic Empowerment for the Disadvantaged (EED) policy as an alternative approach to addressing poverty and inequality. EED would give businesses an incentive to grow and create jobs, while also empowering South Africans who most need a socio-economic leg up. Redress is needed and needed urgently but it does not need to use race as a proxy. Policies that have failed (like BEE) must be scrapped in favour of policies that can deliver.

Said Mlondi Mdluli, IRR Campaign Manager: “For as long as Minister Nxesi continues to believe that more race-based laws will solve the country’s problems, unemployment will persist, and the majority of South Africans will continue to suffer. The government will only be able to effectively address the unemployment crisis by having frank discussions with key stakeholders, such as the IRR, that have formulated pro-growth, non-racial policy alternatives. The issue of race-based employment policies will be on the ballot next year and South Africans will judge this government based on its record.”

Media contacts: Mlondi Mdluli, IRR Campaign Manager Tel: 071 148 2971 Email: mlondi@irr.org.za

Marius Roodt, IRR Head of Campaigns Tel: 082 799 7035 Email: marius@irr.org.za

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

Sinalo Thuku Tel: 073 932 8506 Email: sinalo@irr.org.za