Ending BEE is not an option

Deputy President Paul Mashatile said abandoning Broad-Based Black Economic Empowerment (B-BBEE) is not an option.  

He said abandoning B‑BBEE would amount to abandoning transformation itself, saying it is a necessary tool for transformation and essential for achieving economic equality.

However, he noted that the government’s ongoing two-phase review of the policies will seek to make them more effective by addressing implementation gaps and strengthening compliance.

The Deputy President made these comments in response to questions raised in the National Assembly.

Mashatile received two questions regarding B-BBEE in South Africa, which came as these policies have increasingly come under scrutiny.

Government officials, business leaders, and South African citizens have increasingly criticised these policies, with concerns ranging from their economic cost to their effectiveness in advancing transformation.

In the National Assembly, DA MP Baxolile Nodada asked the Deputy President about his remarks during the second Frank Dialogue on the Future of B-BBEE in Durban on 1 March 2026.

At this dialogue, Mashatile had said that the government is committed to undertaking a two‑phase review of the B‑BBEE empowerment framework towards greater transformation and inclusive economic growth.

Nodada asked him who would conduct the review and what the full details of the metrics and the review’s scope were.

In response, Mashatile explained that the review, led by Trade Minister Parks Tau and his department, will occur in two phases – a short-term review and a long-term review.

The short-term review will aim to refine and assess subordinate laws, including Regulations, Codes of Good Practice, Guidelines, and Practice Notes, under Tau’s legislative authority. 

He said the long-term review, which will be undertaken by Parliament, will involve the review of the B-BBEE Act for “substantive amendments”. 

“This process will also be supported by the B‑BBEE Commission and other oversight bodies to ensure credibility and enforcement,” the Deputy President said. 

“The review will focus on strengthening B‑BBEE by shifting from compliance to measurable outcomes.”

Despite these reviews, Mashatile emphasised that “abandoning B‑BBEE is not an option”.  

“Abandoning B‑BBEE would mean abandoning transformation itself. B‑BBEE is a necessary tool for transformation, essential for achieving economic equality,” he said.

Compliance concerns

The second B-BBEE-related question posed to the Deputy President came from ANC MP Malusi Gigaba.

He asked Mashatile for the reasons that B-BBEE has remained marginal to the economy and failed to transform South Africa’s economic landscape.

Furthermore, he asked what mechanisms the government put in place to ensure that B-BBEE is used to drive the District Development Model for localisation and industrialisation in urban and rural areas.

Mashatile replied that B-BBEE has “opened doors for many who were previously disadvantaged”. 

He pointed out that, from 2021 to date, R94 billion has been invested in black-owned enterprises, with R72 billion in skills development, and over R600 billion in share transactions. 

However, the Deputy President noted that compliance remains a challenge, which is what the two-phase review aims to address.

“We are now strengthening regulations and stricter rules to ensure that businesses comply,” he said.

He explained that, when the B-BBEE Act was introduced in 2003, and following its amendment in 2013, the compliance rates were robust. 

However, the B-BBEE Commission has reported a significant decline in compliance momentum in the years since. 

According to Mashatile, the peak number of compliance reports submitted to the commission was 5,818 in 2019, but this figure has since fallen drastically to below 1,500.

“Therefore, the focus must shift from mere compliance to effective delivery, ensuring that rhetoric translates into measurable impacts,” Mashatile said.

“There is a need to align B-BBEE with broader industrial, fiscal, and competition policies, transforming it from an isolated effort into a catalyst for inclusive growth.”

In addition, the Deputy President said strengthening enforcement against fronting is critical to combat economic sabotage. 

“Empowerment efforts must be concrete, reflected in the creation of jobs, establishment of enterprises, opening of markets, and the significant involvement of women, youth and people with disabilities in the economy,” he said.

“Through integration and collaboration, government, in partnership with the private sector, has introduced the Transformation Fund initiative.” 

“This initiative aims to unlock capital as part of a support package designed to grow black-owned enterprises and accelerate inclusive economic growth.”

Through this Transformation Fund, the Department of Trade, Industry and Competition is planning to offer local companies new incentives to capitalise a fund that will be used to promote BEE in South Africa.

Under this proposal, companies can contribute 3% of their net income to the Transformation Fund to earn double the BEE points currently available for their contributions towards enterprise and supplier development.