ANC’s GNU Partner Calls for Scrapping BEE to Boost South Africa’s Economic Growth

In a bold move, the Freedom Front Plus (FF Plus), a partner in South Africa’s Government of National Unity (GNU), has called for the scrapping of Black Economic Empowerment (BEE) and Affirmative Action (AA) policies. The party argues that these policies are no longer serving their intended purpose and have become obstacles to the country’s economic growth.

During a heated debate in Parliament addressing the financial pressures on South African households, the FF Plus urged the removal of these controversial policies. BEE, which was introduced as a transformative economic policy, was designed to shift the ownership structure of South Africa’s economy. It was meant to empower black South Africans by giving them greater control over key sectors. Affirmative Action, introduced in 1998, aimed to transform the workplace, promoting equality by giving historically disadvantaged groups better employment opportunities.

However, critics like FF Plus Member of Parliament, Philip van Staden, argue that these policies have become mechanisms for political patronage, benefiting a select few with political connections, while the majority of black South Africans remain disenfranchised.

Political Patronage and Economic Decline

Van Staden said that the ANC, which has been in power since the end of apartheid, has used BEE and AA to promote patronage networks, contributing to widespread poverty. He pointed out that the policies have not delivered the economic inclusion that was promised, and instead, the South African economy has suffered.

“It is clear that these policies have failed to address the real issues. Unemployment is over 44%, and for young people aged 15-24, it’s an alarming 64%. These numbers show that the situation is dire, and the policies meant to uplift the black population have fallen short,” van Staden said. He added that the rising cost of living, without access to steady jobs, continues to push South Africans deeper into poverty.

The FF Plus also referenced a poll by a financial institution, which revealed that 55% of South Africans cannot afford to save, and 31% have no retirement savings at all. Further, 11% of the population spends more than they earn each month, relying on debt to make ends meet.

Van Staden noted that the introduction of the two-pot pension system, which allows South Africans to access part of their retirement savings early, has seen a flood of applications. In just one week, the Government Employee Pension Fund (GEPF) received 17,000 applications for withdrawals.

“This shows just how desperate South Africans are right now. The economy needs urgent reform, and policies like BEE and AA need to be reconsidered,” he said.

Calls for BEE and AA Reform

The FF Plus is not alone in calling for an overhaul of BEE and AA policies. Both the Democratic Alliance (DA) and ActionSA have long advocated for scrapping these policies, labelling them discriminatory and counterproductive. These parties argue that the focus should be on creating an inclusive economy that benefits all South Africans, rather than favouring a select few based on race.

In a significant legal ruling in 2023, the Constitutional Court declared the Department of Tourism’s Tourism Equity Fund unlawful. The fund had been set up to provide financial relief only to businesses that were at least 51% black-owned. The court’s ruling followed a challenge by AfriForum and Solidarity, two organisations that argued that using race as the primary criterion for financial aid was discriminatory.

This ruling came after the Department of Tourism had tried to appeal a 2021 Supreme Court of Appeal decision that found BEE criteria for relief funds unlawful. The Tourism Equity Fund had been established at the height of the COVID-19 pandemic, with the aim of providing loans and grants to black-owned businesses affected by the economic fallout of the pandemic.

The Future of Economic Transformation

The debate over the future of BEE and AA is far from settled. While some argue that these policies are necessary to redress the inequalities created by apartheid, others believe they have failed to deliver broad-based economic empowerment and have only enriched a politically connected elite.

The Freedom Front Plus and other critics insist that South Africa needs new economic policies focused on meritocracy and job creation to address the high unemployment rate and the rising cost of living. With the country’s unemployment rate exceeding 44%, and youth unemployment at a staggering 64%, the question remains: can South Africa afford to hold on to policies that may no longer be fit for purpose?

As economic pressures mount, the government may be forced to reconsider its stance on BEE and AA, especially in the face of growing calls for reform from opposition parties, business leaders, and the general public.