Latest news with #Broad-BasedBlackEconomicEmpowerment
IOL News
4 days ago
- Business
- IOL News
Cosatu: The importance of BBBEE in addressing inequality in SA
Unsplash BBBEE is merely one tool, among many, to address the legacies of the past and the inequalities of today. This is a key prescript of the Constitution and an obligation of the state to society, the writer says. Image: Unsplash Broad-Based Black Economic Empowerment (BBBEE) remains an important tool to address our deeply ingrained levels of inequality. It would be strange for any democratic government of a nation emerging from three hundred and fifty years of the most brutal and institutionalised forms of discrimination that left over 90% of society consigned to the most poorly paid form of manual labour, not to embrace state supported economic empowerment programme. It would have been tantamount to endorsing South Africa's status as the world's most unequal society, something clearly the fringe right wing extremists wish for. BBBEE is merely one tool, among many, to address the legacies of the past and the inequalities of today. This is a key prescript of the Constitution and an obligation of the state to society. BBBEE in short seeks to give a fair opportunity to millions historically denied such due to their race, gender or disability. People, in particular the race baiting fringe right wing, ignore its inclusivity. BBBEE includes Africans, Coloureds, Indians, plus women, workers and persons with disabilities of all races. In short it covers about 97% of society! BBBEE is not just the 30% shareholding option but also equity equivalents where investors can offer similar investments supporting local companies, creating jobs and investing in communities. All equally important. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading It includes Employee Shareholder or Worker Ownership Programmes (ESOPs). This has been an initiative COSATU and many unions have championed. In the recent past few years, it has seen over 550 000 workers become shareholders in their companies. This has given them a stake in the companies' well-being and growth, but also crucially put money in their pockets. Some critics lament that BBBEE has failed and must be scrapped. Yet they are silent on its role in creating a growing Black middle class. They deride efforts to create Black industrialists yet miss the point of their role in opening factories and companies, and the jobs these create in local communities. Is BBBEE perfect? Of course not. Does it need to be adjusted, lessons learned, mistakes corrected? Without a doubt. Cosatu does have many concerns with the implementation of BBBEE, notwithstanding appreciating its successes in many instances. BBBEE does need to be adjusted to learn from challenges experienced, to avoid repeating them and to ensure its progressive objectives reach those most in need of empowerment, the millions of working class residents living in townships, informal areas, rural towns and villages across the nation. A discussion needs to be had about the once empowered, always empowered notion. Do we want BBBEE to continue to benefit those already empowered? Or can it be adjusted to prioritise those still in need of empowerment? How can this be practically done? An elegant solution is needed lest BBBEE be dismissed as benefiting only the wealthy. How can SMMEs, especially emerging ones, and particularly those in townships and rural areas, be elevated? We should not continue to normalise township and rural economies to be composed of taxis, petrol stations, hawkers and taverns alone. An inclusive targeted approach to these communities where the overwhelming majority of South Africans live, is needed. Can more be done to eliminate fronting where White South Africans merely add the name of a Black employee or partner to their ownership papers or where a Black owned company simply imports goods from Asia? BBBEE is not about names on a letter head. It is meant to reach those in need of empowerment. It cannot be about enriching importers when we need to elevate local procurement and give support to local businesses, Black and White, and not sacrifice them in pursuit of cheap imports. Public procurement with an annual budget of over R1 trillion, from departments to municipalities, entities and State-Owned Enterprises, has a key role to play in supporting BBBEE and more critically making sure it reaches those who need it, not the nouveau riche. The recently assented to Public Procurement Act elevating this important objective across the state will be an important boost in this regard. Public representatives across the three spheres of government need to hold the executives accountable in this regard. The private sector too, in particular large mining, manufacturing, financial and other well-resourced sectors with large procurement budgets, need to provide more solidarity and support to local companies, in particular BBBEE compliant ones. This is key not only to transformation and empowerment, but also to boosting localisation and stimulating badly needed economic growth and tackling unemployment. Whilst Cosatu supports the thrust of BBBEE, the heart of our support and in fact our passion, lays in ramping up ESOPS or Worker Ownership Programmes. We want workers to live a better life, to boost their earnings, to have more money to pay their debts, to feed their families and to buy the goods local companies produce and thus spur economic growth and sustain and create more jobs. We want workers to become co-owners of their companies as this gives them a stake in their success and a direct motive to boost productivity and again spur economic growth and sustain and create jobs. We want to end the still painfully prevalent apartheid scars that are the feature of almost every township, village and community. We want workers, African, Coloured, Indian, White, women and with disabilities, to be co-owners in this economy, including on the JSE. We want this better life now, not in some indeterminate future promised on a Jpeg by irrelevant populists. Workers are the backbone of the economy. They have made South Africa the industrial hub of the economy. Many have grown wealthy off of their sweat and blood, it is time that this wealth is shared with the working class. ESOPs are a critical path to doing that. BBBEE is not perfect, but its objectives remain as valid today as they were in 1994. Adjustments are needed, in particular to make sure the SMMEs in our townships, local manufacturers, and most importantly workers are elevated and prioritised at all times. Solly Phetoe is the General Secretary of Cosatu. Solly Phetoe is general secretary of Cosatu. Image: Doctor Ngcobo / Independent Newspapers.
Business Insider
13-06-2025
- Business
- Business Insider
Elon Musk considers launching SpaceX rockets from South African soil
South African-born billionaire Elon Musk is reportedly exploring the possibility of launching SpaceX rockets and deploying Starlink low Earth orbit (LEO) satellites from his home country. Elon Musk is considering using the Denel Overberg rocket test site in South Africa for SpaceX launches and Starlink satellite deployments. The site is strategically suited for polar orbit launches, enhancing Starlink's ability to provide broadband to underserved regions. South Africa faces regulatory challenges that have delayed Starlink's operations despite potential benefits for the digital divide. The world's richest man, Elon Musk has expressed interest in using the Denel Overberg rocket test site near Arniston, outside Cape Town, for potential SpaceX launches. Developed by the Aerospace Systems Research Institute at the University of KwaZulu-Natal, the site has launched suborbital rockets up to 18km and is aiming for orbital capability by 2028. A SpaceX partnership could fast-track its readiness. According to The Daily Maverick, two space experts noted that the site's strategic value lies in its ideal position for launching satellites into polar orbits—particularly those passing over the South Pole—as well as for deploying Starlink's LEO satellites to deliver broadband internet to consumers, especially in underserved areas. The tech mogul, who is currently in a public feud with the U.S. President Donald Trump, appears to be turning his gaze back to South Africa as a prospective site for future space operations. While specific details remain under wraps, sources close to the matter suggest Musk is seriously evaluating South Africa 's strategic potential for both SpaceX and Starlink expansion. This move could mark a historic milestone, positioning the African continent as a new player in global space infrastructure. Starlink's turbulent run in South Africa Starlink, Elon Musk's satellite internet venture, has already launched operations across several African countries, delivering high-speed internet to underserved and remote regions. However, in South Africa, Musk's country of birth, the rollout has hit significant roadblocks despite early optimism about its potential to help bridge the nation's digital divide. Regulatory delays, licensing challenges, and questions surrounding local compliance have stalled Starlink's entry into the South African market. Tensions escalated further following President Cyril Ramaphosa's recent appearance in Washington and Musk's public criticism of the South African government for failing to approve Starlink's operations. In response, the South African government has initiated a review of its Broad-Based Black Economic Empowerment (B-BBEE) policy, particularly as it relates to foreign tech companies like Starlink. Launching satellites directly from South Africa would not only accelerate Starlink's service across the continent but could also support Musk's broader ambition of expanding access to internet connectivity globally.
IOL News
13-06-2025
- Business
- IOL News
Cosatu defends B-BBEE policy amid criticism from Solidarity and FMF
The Free Market Foundation and Solidarity held a media briefing on Thursday to discuss the impact of Black Economic Empowerment legislation on the economy. Image: Supplied Banele Ginidza The battle for the scrapping of "race laws" in South Africa went a notch up on Thursday as the Congress of South African Trade Unions (COSATU) shot down a call to review and drop South Africa's Broad-Based Black Economic Empowerment (B-BBEE) policy. This comes as trade union Solidarity and the Free Market Foundation (FMF) on Thursday released a report claiming that B-BBEE has caused serious damage to the country's economy and to its population while only enriching a small, politically-connected elite. The report draws on data from the B-BBEE Commission, Stats SA, the JSE, and international comparisons to assess the real costs of compliance across the key BEE scorecard elements: ownership, skills development, enterprise and supplier development, management control, and socio-economic development. According to the report, the annual cost of BEE compliance is between R145 billion and R290bn per year. It claimed that this has resulted in an annual reduction of 1.5% to 3% in economic growth, and to an annual loss of between 96 000 and 192 000 jobs. 'Our findings show that BEE, as currently designed, is enriching a small elite while throttling economic dynamism and deepening unemployment,' said Dr Morné Malan, FMF senior associate and co-author of the report, speaking at the joint press conference. The study compares South Africa's model with global 'affirmative action' policies in Malaysia, India, Brazil, the US, and Namibia, showing that South Africa's version is the most intrusive and economically damaging. At the media briefing, the organisations claimed that B-BBEE benefits largely captured by politically-connected elites as South Africa now ranks 139th in GDP per capita, down from 87th in 1994. Executives of both organisations said the people most affected by the current economic programme are people that work poor people and those that are beneficiaries are the elite. "That is why we will engage with Cosatu trade unions Numsa and others to find alternatives to the current racial legislation," said Theuns du Buisson, economic researcher at the Solidarity Research Institute, and co-author of the report. "In the second place we will continue to litigate and in the third place we will also put pressure on SA via the international world and continue to put pressure on South Africa with the outside world especially the G20 that comes." However, Cosatu's Parliamentary spokesperson Matthew Parks said the report provided no breakdown backed up by actual research as to any financial burden to the state nor how B-BBEE has been an obstacle to growing the economy and reducing unemployment. Parks said the report strangely cited statistics related to real and potential growth overall, but no evidence of the relationship between those and B-BBEE. He said it may as well have blamed constitutional democracy for South Africa's economic challenges. "No reference is made to the need to overcome our still prevalent racial divides as evidenced by countless employment equity studies confirming that most senior positions in the private sector are held by White males or that economic ownership, including shares on the JSE remain largely White-held," Parks said. Johann Rossouw, an economist at Altitude Wealth, said a more sensible empowerment model as an alternative to B-BBEE policies was Black Economic Skills Transfer (BEST), which would help with job creation and carry the economy into the future. "At the moment all the arguments are about how many ways to cut the existing pie instead of growing the pie that we have for the future. Black empowerment is not a policy of the government of national unity," Rossouw said, commending that the study was evidence based and drew comparison with other countries. "It is important that the GNU makes its own policies that will benefit the average poor." However, independent economist Duma Gqubule said the study and the report was fake news on steroids, which lacked the fundamental understanding of the objectives of transformation. Gqubule said the report lacked empirical evidence and was premised on companies counting upskilling workers for an example as a transformation contribution when both the worker and the company benefited from the exercise. "I would call on black business to come up with a coherent response to this. It is a dangerous agenda. We need another citizen dialogue on black empowerment for the new circumstances as the situation in the 1990s when the policies were crafted were critical," Gqubule said. BUSINESS REPORT
Eyewitness News
12-06-2025
- Business
- Eyewitness News
Job creation has been minimal in SA since democracy, claims Solidarity
JOHANNESBURG - Minority lobby group, Solidarity, claims that job creation since 1994 has been minimal, largely due to Broad-Based Black Economic Empowerment (BBBEE) policies. Solidarity, in collaboration with the Free Market Foundation (FMF), has released a new study outlining the costs associated with BBBEE compliance. Their findings indicate that these policies have contributed to rising unemployment and have hindered significant economic growth since 1994. Solidarity CEO Dirk Hermann argues that a complete overhaul of the BBBEE policy would be more beneficial for the country. 'Black Economic Empowerment does not address inequality. It increases as a result of the policy. The paradox is that inequality increases particularly in the black community as a result of a small group of elites, who are being radically enriched.' Speaking to 702 , prominent businessman Saki Macozoma said BBBEE remains necessary for transformation. 'Empowering people who are previously disadvantaged is the right kind of thing. It may be that the terminology of Black Economic Empowerment is the one that creates the emotion. The fact of the matter is that we need to have the redress, and we have not done it to the extent that we should have.' ALSO READ:
The Citizen
12-06-2025
- Business
- The Citizen
BEE is bringing South Africa's economy to its knees
BEE is bringing South Africa's economy to its knees – new report A report released on June 12 by the Solidarity Research Institute (SRI) and the Free Market Foundation (FMF) has sent shockwaves through South Africa's political and economic landscape. The report delivers a scathing critique of the country's Broad-Based Black Economic Empowerment (BEE) policy, asserting that it is causing substantial damage to the South African economy while enriching only a small, politically connected elite. BEE was initially introduced as a transformative policy aimed at redressing the economic imbalances of apartheid by promoting greater inclusion of black South Africans in the economy. However, the latest findings paint a different picture, highlighting a policy that is now burdening economic growth, exacerbating inequality, and stalling job creation. According to the report, the annual compliance costs for BEE range from R145-billion to R290-billion, which represents between 2% and 4% of South Africa's Gross Domestic Product (GDP). This enormous economic burden has resulted in an annual reduction of GDP growth by between 1.5% and 3%, with a concomitant loss of between 96 000 and 192 000 jobs each year. Over the years, this has accumulated to about 3.8 million lost 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,' said Theuns du Buisson, economic researcher at the SRI and co-author of the report. 'It is irrelevant when someone then says the policy 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 further outlines that while there has been some progress in terms of black ownership and skills development, these gains are heavily overshadowed by the adverse effects of BEE. Among these are increased inequality, elite capture of policy benefits, and widespread economic stagnation. 'The policy places a particularly heavy burden on critical sectors such as mining and finance,' the report reads, 'and it deters foreign investment, encourages capital flight, and stifles technological progress.' South Africa's economic position on the global stage has deteriorated markedly, falling behind other middle-income countries with which it was once comparable. The report critiques the lack of focus and effectiveness in the implementation of BEE policies, which contrasts with more successful affirmative action or empowerment programmes abroad. Du Buisson pointed to countries such as Brazil and the United States, which have begun to phase out similar race-based economic policies. 'Moreover, in other countries, affirmative action policies are precisely there to prevent discrimination, while in South Africa, they in fact make discrimination compulsory,' he noted. 'South Africa must now follow the path of 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.' Connie Mulder, head of the SRI, emphasised the urgency of the situation: 'South Africa cannot afford to continue down this path. The data is clear. BEE, in its current form, is damaging the economy and hurting those it was meant to help. We need policies that promote real economic participation and growth without racial quotas that cripple progress.' The call to action from the writers of the report is for policymakers to immediately abolish the current BEE framework and replace it with a policy that fosters inclusive growth without impeding the economy. 'We need an economic environment where all South Africans, regardless of race, have the opportunity to contribute and prosper,' Du Buisson said. – Access the full report here: Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading! Stay in the know. Download the Caxton Local News Network App Stay in the know. Download the Caxton Local News Network App here
