New BEE rules will drive investors away from South Africa

Uncertainty around proposed amendments to South Africa’s broad-based black economic empowerment (B-BBEE) laws could severely weaken investor confidence in the country’s manufacturing sector.

This is according to Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso, who expressed this view in her weekly newsletter.

In January 2026, the Department of Trade, Industry and Competition (DTIC) drafted proposed amendments to the country’s B-BBEE policies.

Under current B-BBEE legislation, companies operating in South Africa are incentivised to procure goods and services from suppliers with at least 51% black ownership.

The DTIC’s proposed amendments would further incentivise these companies to prioritise procurement from 100% black-owned suppliers instead.

Mavuso warned that if these amendments are passed, many currently B-BBEE-compliant companies would lose their compliant status.

“Original equipment manufacturers have spent years building local supply chains, deliberately including majority black-owned businesses as part of their transformation commitments,” Mavuso said.

“Now the DTIC’s proposed amendments threaten to strip them of their B-BBEE status because many suppliers are not 100% black-owned.”

Mavuso said there was significant uncertainty surrounding this policy and that its passage could drive further disinvestment in South Africa’s local manufacturing sector.

She pointed to Japanese automotive manufacturer Nissan, which recently announced a $45 million investment to expand its manufacturing capacity in Egypt.

This comes after the company sold its last remaining manufacturing plant in Rosslyn to Chinese manufacturer Chery, with Nissan now acting solely as an importer in South Africa.

Mavuso said these decisions by Nissan were indicative of declining confidence in South Africa as a globally competitive manufacturing market on the African continent.

“Automotive components for specific models cannot simply be swapped out when the B-BBEE rules change,” Mavuso explained. “Developing new suppliers takes years.”

“It requires testing, certification, and integration into production lines. The government-backed interventions should be providing a pipeline of strong black-owned businesses that can compete.”

New BEE amendments should be scrapped

Manufacturing is one of South Africa’s most critical sectors, supporting 1.5 million jobs and contributing over 12% to the country’s GDP.

However, the commercial sustainability of this sector is currently threatened by issues of high logistics costs, energy unreliability, security concerns, import dumping, and political uncertainty.

Mavuso said the South African government urgently needs to develop a reasonable strategy to protect local manufacturers from declining investment.

She outlined three key interventions that the government should take, with the first being a withdrawal of the DTIC’s proposed B-BBEE amendments.

“Transformation is essential, but policy changes cannot happen overnight in sectors where supply chains take years to build,” Mavuso said.

Secondly, Mavuso called on the Minister of Trade, Industry and Competition, Parks Tau, to establish a manufacturing sector task force.

This task force would report directly to President Cyril Ramaphosa on a monthly basis and would allow for coordinated government action against obstructions in the local manufacturing sector.

Thirdly, Mavuso said the deindustrialisation of South Africa should be a problem that concerns the entirety of the South African cabinet, not just the DTIC.

“Energy reliability, logistics costs, ports performance, crime and security affect manufacturers’ ability to compete globally,” Mavuso said. “When a factory closes, it’s not just the DTIC’s problem.”

Mavuso offered for BLSA to act as a correspondent on communicating challenges in the manufacturing sector directly to the presidency, through its engagements with local manufacturers.

Appearing on 702 to discuss her view further, Mavuso suggested that the DTIC was seemingly receptive to having further discussions around this issue.

“We should be having a conversation around phasing this in,” Mavuso said. “And the good thing about the conversation with Minister Tau is that we’re definitely going to have a conversation about this.”

“But it can’t be this radical. Companies have choices. If you’re going to dump these things because you think you can, there are economic implications to it, and that means jobs.”