The BEE illusion: why South Africans want empowerment based on need, not race | Anthea Jeffery

Black economic empowerment is under growing pressure in 2026, from US visa threats against officials who implement it to a 2015 report showing that about 60% of value from early mining ownership deals went to around 46 participants. In this opinion piece, the IRR’s Anthea Jeffery argues that BEE ownership rules deter the investment South Africa needs to grow and create jobs, and that most South Africans want change. Polls show 63% support a poverty-based alternative, including 60% of ANC voters, while the IRR proposes race-neutral empowerment built on school, health and housing vouchers for the poor..By Anthea Jeffery*.Criticisms of black economic empowerment (BEE) intensified in 2026, spurred on by evidence in a recently surfaced 2015 report that some 60% of the net value redistributed by pre-2014 ownership deals in mining had gone to around 46 BEE companies or participants – each of whom had probably gained between R2bn and R3.7bn.By contrast, most black South Africans continue to be hurt by BEE rules in mining and elsewhere. These costly requirements clearly curtail investment, growth and job creation. They have also helped raise the unemployment rate to 33.6%, against a global average of 5% in 2026.The United States (US) ambassador to South Africa, L Brent Bozell III, has criticised BEE, saying: “South Africa desperately needs…investment. We have companies waiting in the wings with billions of dollars ready to invest.” However, these companies are concerned about BEE and particularly its ownership requirements.These rules effectively require 25–30% black ownership, with no equity-equivalent option in mining and telecoms. Not surprisingly, this demand deters fixed investment into the infrastructure, mines, factories, and machinery needed to boost economic productivity. Yet without a virtual doubling in fixed investment – from 13.9% of GDP in 2025 to the global average of 26% – South Africa cannot raise its paltry economic growth rate to the 4%-5% average long achieved by its emerging market peers.Given the ANC’s unwillingness to budge on BEE, the Trump administration has recently announced that it will introduce visa restrictions to bar the entry into the US of South Africans responsible for enacting or implementing “race-based discrimination”, such as BEE’s damaging and ideologically-driven rules.The ANC has reacted with outrage, emphasising that South Africa is a sovereign country and its BEE policies will remain unchanged. The Thabo Mbeki Foundation has warned of a “social explosion” if BEE is abandoned.However, the ANC’s insistence on retaining BEE is at odds with the preferences of most black South Africans. This is evident from opinion polls conducted for the Social Research Foundation (SRF) and Institute of Race Relations (IRR) in 2024 and 2026.In a 2024 opinion poll, the SRF found that:68% of all respondents – and 60% of ANC voters – supported doing away with race-based appointments in the public service “so that all government officials are appointed only on merit”;63% of all respondents – and 52% of ANC voters – supported an end to race-based public procurement, so that “all state tenders are issued only on merit”;73% of all respondents – and 63% of ANC voters – agreed that any business should be allowed to “operate freely, regardless of whether it is black or white-owned, so long as it pays tax and helps create employment.”In an IRR opinion poll in March 2026, 70% of all respondents said that “the government should no longer use apartheid race categories to decide who qualifies for business and job opportunities.” In addition, 89% (up from 84% in 2025) agreed that “the different races need each other for progress and that there should be full opportunity for people of all colours.”Moreover, 76% agreed that “better education and more jobs will steadily reduce inequality between the races” (up from 73% in 2025). On public procurement, only 10% supported the current system, which allows for inflated tender pricing in pursuit of “transformation.” By contrast, 45% wanted “value for money” to be prioritised and 82% wanted the government to find out how much BEE “premiums” – in the form of inflated tender prices – are costing.In 2026, the SRF put the following statement to respondents and asked if they agreed or disagreed with it: “The Democratic Alliance recently proposed a new policy. Its policy suggests that BEE be replaced by an empowerment policy that uses poverty, not race, to determine who is in need of upliftment. It argues that BEE has been abused to benefit an elite few, and its new policy will benefit those who really need it.” In response, 63% of all respondents said they supported such a poverty-based alternative. So too did 60% of ANC voters and 55% of black voters.The IRR has also developed an alternative to BEE, which it calls Economic Empowerment for the Disadvantaged (EED). This EED proposal has three core features. First, it is race-neutral, which means it targets the poor and its benefits cannot be captured by the black elite. Second, it promotes investment, growth, employment, innovation and free market competition, all of which are vital to upward mobility. Third, it recognises that many poor South Africans are held back by bad schooling, housing and health care and that these needs must also be addressed in efficient and cost-effective ways.In the 2026/27 financial year, the National Treasury budgeted almost R700bn for public provision in these three spheres. This amount is comparable to what other emerging markets generally spend. In South Africa, however, the state’s top-down delivery system is so dysfunctional that outcomes are extraordinarily poor.With public debt exceeding 77% of GDP, current budgets cannot be increased. Rather, the key need is to obtain far better value for every tax rand spent. This can be achieved by redirecting much of the revenue now being badly used by bureaucrats into tax-funded schooling, housing, and health care vouchers for the poor.Low-income households empowered in this way would have real choices available to them. Schools and other entities would also have to start competing for their custom, which would keep prices down and push quality up. Similar voucher schemes in a variety of other countries illustrate and confirm the gains that would be made.South Africans strongly support the voucher idea, as IRR opinion polls over several years have consistently shown. In 2016 some 85% of black respondents expressed support for school vouchers, while 83% endorsed both healthcare and housing vouchers. In addition, 74% of black respondents said these vouchers would be more effective than BEE in helping them to get ahead. Subsequent IRR polling on these issues has repeatedly shown the same pattern, with at least 80% of black respondents supporting school, health and housing vouchers. In 2024, some 92% of South Africans favoured school vouchers, 83% supported health ones, and 80% endorsed housing vouchers. Asked if vouchers would be more effective in helping them than BEE, 81% answered “Yes,” while only 12% said “No.”As trenchant criticisms of BEE have mounted, the ANC and other proponents of the policy have begun to acknowledge that the practical outcomes of the policy have disappointed. Many have nevertheless claimed that BEE must be retained because there is no credible alternative to it. That claim is false. Genuine, workable alternatives are already evident in both the DA’s proposals and the IRR’s EED framework. Moreover, the majority of South Africans support the changes that both have proposed..Read more:.ANC changing BEE rules to create R100bn Black Industrialist Fund bankrolled by 3% profit tax.The ANC can no longer pretend that race-based rules provide effective redress and that greater prosperity will in time trickle down from the wealthy black elite to millions of unemployed and destitute South Africans. Instead, it should heed the popular will, jettison a policy that enriches the few at the expense of the many – and embrace the true transformation that most South Africans so clearly want..*Dr Anthea Jeffery holds law degrees from Wits, Cambridge and London universities, and is the Head of Policy Research at the IRR. She has authored 12 books, including Countdown to Socialism - The National Democratic Revolution in South Africa since 1994, People’s War: New Light on the Struggle for South Africa and BEE: Helping or Hurting? She has also written extensively on property rights, land reform, the mining sector, the proposed National Health Insurance (NHI) system, and a growth-focused alternative to BEE..This article was first published by Daily Friend and is republished with permission..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

The BEE illusion: why South Africans want empowerment based on need, not race | Anthea Jeffery

Related Stories

Title deeds for black farmers: right reform, wrong reason | Andrew Morphew

South Africans are far less divided on race than their politicians suggest

MAILBOX: Post Office today, DHL tomorrow? A reader's lost-wallet saga

"I hope Elon is listening": Gungubele pleads with Musk to bring Starlink home