South Africa must stop BEE, NHI, and Expropriation without Compensation

Efficient Group chief economist Dawie Roodt said South Africa’s government has made commendable progress in putting the country on a better path, but now, the next step needs to be taken.

He said the next step is to do away with harmful legislation and policies such as Expropriation without Compensation, National Health Insurance (NHI) and Black Economic Empowerment (BEE).

According to Roodt, this will allow South Africa’s economy to boom, with GDP growth of up to 6% on the cards.

These comments were made following Finance Minister Enoch Godongwana’s tabling of South Africa’s 2026 Budget.

Roodt was relatively upbeat about this Budget and South Africa’s fiscal trajectory, saying the country appears to be on a far healthier path than a few years ago.

For example, he praised the decision to lower South Africa’s inflation target, calling it a “brilliant, very good” move.

He also said it was an encouraging sign in showing that the government is willing to make difficult decisions, even if they were previously opposed or hesitant.

Another example of this is private sector participation, with both Godongwana and President Cyril Ramaphosa recently emphasising the topic.

In the 2026 Budget, Godongwana explained that private sector participation is playing an increasingly greater role in various government initiatives and reforms, saying the government is looking to encourage even more public-private partnerships (PPPs).

“Honourable Members, we continue to implement reforms to unlock greater private sector participation, enhance spending efficiency and shorten delivery timelines,” he said.

“The amendment of the PPP regulations has enabled greater private sector participation by streamlining procedural requirements, closing regulatory gaps and clarifying institutional roles.”

He encouraged public institutions to increasingly see PPPs as a viable alternative method for delivery, particularly in cases where funding limitations or capacity constraints hinder effective implementation.

Similarly, President Cyril Ramaphosa made mention of PPPs in his 2026 State of the Nation Address.

The President praised and encouraged private-sector involvement in the county’s energy, ports and rail, health, construction, and security industries.

He was particularly optimistic about the private sector’s participation at Transnet, announcing plans to initiate major public-private partnerships in South Africa’s port terminals and rail corridors.

This will be done through a concession model that preserves public ownership while mobilising private investment and expertise.

The next step

Roodt explained that these comments from the President and Finance Minister are significant because they mark a change of pace for the ANC compared to a few years ago.

“Listen to the Minister of Finance. He’s making a big thing about private sector participation. The President, in his State of the Nation speech, also mentioned private sector participation,” he said. 

“Now that’s something that the ANC never would have done. That’s totally against the ideology of the ANC. But the reality is overtaking ideology.”

“They’re getting private sector participation, and the Minister of Finance is encouraging the private sector to get involved in state-owned enterprises and so-called PPPs.”

“That is a good thing, and if we do that and take what happened on the financial markets the last couple of months in the last year or so and remove a couple of more obstacles, we can grow this economy at four, five, six per cent.” 

Roodt said the next step of removing obstacles to growth will not be easy, but it is necessary if the country wants to reach its full growth potential. 

“It was difficult to lower the inflation targets, but eventually the Minister of Finance did that,” he said. 

He explained that the first step is to get rid of Expropriation without Compensation, as these policies go against the government’s primary function. 

“The job of the state is to protect me and my stuff and not to steal my stuff. That is what expropriation means. It means theft,” he said. 

“They’re supposed to protect me and my stuff, not to steal my stuff. Remove that from the statute books. We don’t need a law like that.”

Another policy the government should give up on, according to Roodt, is NHI, which he said is unlikely to be implemented regardless.

“The NHI is not going to happen, and the Minister of Finance didn’t give money to the NHI – say that officially, say it is not going to happen,” Roodt urged.

“We can’t afford that. We’re going to use the private sector, we’re going to fix the horrible service that we do get from the state in the form of health services – but the NHI, in the way that they envisaged, is not going to happen.”

Roodt’s prediction about the NHI is looking increasingly likely to come true, as Ramaphosa recently undertook not to implement any part of the Act until the Constitutional Court hands down judgement on two cases against the legislation.

Lastly, Roodt said the government should get rid of BEE policies, claiming that they have failed to reach their stated aim of empowering black South Africans.

“If you really had BEE, we would make sure that our black kids get world-class educations and skill development. We would make sure that our black people live in a safe environment,” he said. 

“We would make sure that our black people get proper water and electricity and a clean pavement from the local authorities.” 

“That is real empowerment. Not giving a couple of cronies an inside opportunity to get these juicy contracts, and a few individuals get filthy rich.”

“We need to empower our black people, and that, I am absolutely in favour of – real black economic empowerment, and not this crony protection and crony empowerment that we have in South Africa.”

Recently, Godongwana expressed that the government is open to an honest debate about the unintended consequences of BEE policies.

Godongwana said the debate around BEE must focus on the policy’s efficacy and whether it is actually driving the empowerment of black individuals in South Africa. 

“If the debate starts there, it can start from an objective basis of analysing some of the unintended consequences, and then we can have a constructive discussion,” he said. 

This admission was considered significant, as the ANC government of the past had refused to even debate the merits of BEE with opposition parties.