South African trade union unveils plan to eliminate BEE and cut unemployment to 17% by 2030

Trade union Solidarity’s Research Institute has released a report outlining the roadmap South Africa could follow to become “race-free” by 2030.

Among other suggestions, the report argues that South Africa must set a clear end date for racial classification, saying that policies like affirmative action must be temporary.

The Solidarity Research Institute (SRI) unveiled this report on Thursday, 14 May, saying it believes South Africa can and should achieve a race-free dispensation by 2030.

The report, titled, Race-Free by 2030, provides proposals to gradually transition South Africa from race-based legislation to “real empowerment, based on need, economic growth, and job creation”.

This is because, according to SRI head Connie Mulder, the country’s current racial dispensation has failed to truly improve the lives of poor South Africans.

“The past three decades have proven that racial legislation does not solve poverty, unemployment and inequality,” Mulder said.

“Today, South Africa faces record levels of unemployment, poor economic growth and millions of people without hope of getting a job or hope of making progress.” 

In the report, the SRI argues that, without race laws, South Africa’s unemployment rate could decline from nearly 32% now to 17%.

“These estimates are necessarily imperfect, but they illustrate the scale of the opportunity cost,” the report explains.

“In a country where unemployment is the central driver of poverty, dependency and social instability, policies that suppress growth have devastating human consequences.”

Mulder explained that the report does not merely examine superficial amendments to existing racial legislation or alternative forms of black economic empowerment (BEE). 

“Rather, it examines what a realistic transition within current legislation might look like in order to gradually free South Africa from race-based legislation by an end date in 2030,” he said.

“Affirmative action and similar measures have always been supposed to be temporary in nature. The question, therefore, is simply: Where does the finish line lie?”

Phasing out BEE policies

Solidarity has been vocal in its opposition to BEE policies in their current form. The SRI has released data estimating that compliance costs alone drain South Africa’s economy of as much as R290 billion a year. 

“These costs divert resources away from investment, expansion, wages, technology and job creation, while also increasing complexity for small and medium-sized firms,” the report explains. 

“The result is a system that often protects incumbents, discourages entrepreneurship and acts as a non-tariff trade barrier to foreign investors.”

It further claims that Broad-Based BEE has distorted procurement, encouraged fronting and elite capture, and weakened investment confidence. 

“While there have been gains in black ownership, management representation and skills spending, these gains have been modest relative to South Africa’s unemployment and poverty crises.”

Therefore, where it pertains to BEE policies, the SRI’s report proposes making equity equivalence the default option for multinational investors.

“Equity equivalence already exists within the B-BBEE framework and allows multinationals to make approved developmental contributions instead of transferring equity. This should become the default for foreign investors,” it said.

In addition, the report argues that employee stock ownership plans (ESOPs) for local companies should become the preferred route for earning ownership recognition.

“The current ownership model too often benefits a small number of politically connected or financially positioned shareholders, while ordinary workers remain wage earners without meaningful capital ownership,” it said.

“ESOPs provide a better model. They can allow employees to own a stake in the companies where they work, share in value creation, build assets, improve retirement security and participate more directly in the productive economy.”

Crucially, the report said ESOPs should not be measured primarily by race-based criteria, but rather according to whether they create broad, genuine employee ownership.

“In South Africa’s demographic context, such schemes would still benefit large numbers of black employees, but without requiring government to classify workers by race before deciding whose ownership counts,” it said.