South Africans are commemorating three decades of the country’s transition towards democratic rule this month. Freedom Month events reflect on the positive socioeconomic and political changes experienced since 1994.
These gains are well documented in both domestic and international research literature on political liberties and the rule of law as well as human development. For example, several Stats SA reports cite the improved access to basic public goods since 1994.
Income and wealth research literature by non-state entities has equally pointed to some minimal progress in improving a racialised labour market and asset ownership disparities.
Yet one glaring feature of our society still subverts the legitimacy of post-apartheid democracy: structural racialised economic inequality. These disparities are observed in all essential human development areas and statistical analyses.
Even Bretton Woods institutions like the World Bank warn policymakers that race-based socioeconomic inequalities impede economic development goals.
Thus, it is astonishing and intellectually dishonest for some policy advocacy groups and public commentators to propose that South Africans should not place primacy on racial redress in economy-wide policymaking.
This perspective is based on misinformation, racist development assumptions, and flawed arguments.
The first shortcoming in this narrative is that there’s insufficient data on BEE, racial redress policy implementation, and economic transformation. But this view is not valid because it overlooks the plethora of academic literature, researched policy analyses, reports, and books on overall race-based socioeconomic inequality.
The broad-based black economic empowerment (B-BBEE) commission’s national trends report (2022) highlights that only 1 % of companies on the Johannesburg Stock Exchange (JSE) are 100% black-owned.
The growth in average black ownership has not increased substantially over the years. This figure increased from 27% to 29% between 2017 and 2022. Similarly, both the Stats SA household income survey and employment equity reports amplify persistent race-based disparities.
Several books from non-state research organisations, authors, and policy advocacy groups have equally contributed to understanding this phenomenon.
For example, the Mapungubwe Institute for Strategic Reflection’s (Mistra) 2020 Beyond Tenderpreneurship: Rethinking Black Business and Economic Empowerment book provides practical policy recommendations for linking racial redress with broader economic structural change. Duma Gqubule’s 2006 publication is also seminal in ongoing debates about BEE.
The second flaw of misplaced attacks on BEE is attributing all structural fault lines in the economy to the policy. This erroneous argument relies on misinformation articulated in the public commentary of organisations such as the Centre for Development and Enterprise (CDE) and William Gumede’s non-evidence-based claims.
These authors argue that BEE has caused structural unemployment, de-industrialisation, low growth, and poor micro, small, and medium enterprise performance. Researched literature exploring the underlying causes of all these perennial challenges cites structural catalysts that are not related to racial redress policy implementation.
The evidence directs us to the real barriers such as liberalisation, weak industrial policy implementation, over-financialisaton, economy-wide market concentration, and uneven spatial development. BEE and other racial redress policies are not identified as major barriers for development in SA.
The claims that suggest racial redress has caused all the structural economic problems cited above are based on misinformation and have no empirical basis.
Finally, BEE detractors draw from racist assumptions about patronage, poor governance and corruption in society. This oversimplification is exemplified by these public commentators automatically equating racial redress with maladministration or weak governance outcomes.
This baseless proposition assumes that racial redress policies are inherently unproductive and cause systemic corruption. Official public investigations, inquiries, criminal jurisprudence, and market competition policy reviews refute these claims.
Documented findings illuminate that corruption takes many forms and it is instigated by different individuals or groups. The Zondo commission report and Competition Commission investigations show how large and small private corporations have engaged in corrupt acts outside of BEE policy implementation.
No one is suggesting that the current economic transformation model is perfect and has no implementation flaws. But the public policy commentary and discourse on how to address shortcomings should be evidence based.
- Dr Mabasa is a researcher, author, educator and public policy analyst
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