News / Africa

S. Africa Pushes Economic Empowerment Program

A fruit vendor waits for customers at an informal settlement in Thokoza, south of Johannesburg, South Africa, July 18, 2014.
A fruit vendor waits for customers at an informal settlement in Thokoza, south of Johannesburg, South Africa, July 18, 2014.

Having won this year's election with more than 60 percent of the vote, South Africa's ruling ANC party -- in power for 20 years now -- is under renewed pressure to help the country's poor black majority.  Thuso Khumalo, director of South Africa's Broad-Based Black Economic Empowerment (BBBEE) program, as well as experts, have differing opinions on whether this program can ease inequality in South Africa.

From 1948 to 1994 South Africa went through apartheid, a brutal segregation system imposed by the country's white minority.  Under the system, black Africans and other non-whites were forced off their land and driven into bantustans, areas where they were totally disconnected from the country’s economy.

Since winning power 20 years ago, the ANC has struggled to fix the inequalities created by the system.  Twenty-three million of the country’s 51 million people still live below a poverty line of $58 per month and more than 16 million of these are surviving on government grants.

In addition, whites still control 80 percent of the country's land and 90 percent of the top 100 companies in the Johannesburg stock exchange.

This has caused anger among the country’s black majority, who blame the government for failing to ensure they have a fair share of the country’s economy.

But the government said its revitalized Black Economic Empowerment (BEE) program, now under the new name Broad-Based Black Economic Empowerment (BBBEE), was the answer to these challenges.

Incentives

The program provides incentives for companies to employ more blacks, promote them to management positions and give them shares in the firms they work for.

Companies are also given points for developing the skills of black workers and buying their supplies from black-owned firms.

Nomonde Mesatywa, who is chief director of the BBBEE in the Department of Trade and Industry, said the program could level out the inequality in South Africa's economy.

“It’s a redress program, in terms of restructuring the economic landscape by making sure that the patterns of ownership don’t remain in the minority but rather the black people start to participate effectively by owning shares and equity in big conglomerates that operate in the country,” said Mesatywa.

Some companies have been hesitant to implement the BBBEE codes as there are no penalties for failing to comply.

However, Mesatywa said large companies had a lot to gain if they complied with the BBBEE legislation.

“Obviously it gives them opportunity to benefit from government contracts and government procurement, because as you know generally the government is the biggest procurer of goods and services, so we are saying that, that it's like an incentive for companies, but beyond that the fundamental principle is that you contribute to the economic, social well-being of the country,” said Mesatywa.

Criticism

But this program has been criticized for enriching only a few politically elite.

Mashego Maleka, the CEO at Zenzele Technology Incubator, a company whose aim is to economically empower disadvantaged blacks, said BBBEE was a good program but its implementation needed to be revised.

“On the same time when there are the few that are benefiting, the bulk are burning the country, we have got black guys with mining rights, they cannot get funding because they can’t find market.  So for 20 years if you have got a mine, you want to export iron, you want to export coal, you can’t because you haven’t got a slot,” said Maleka.

Anton Baumann of Transcend Capital, a corporate finance house specializing in black economic empowerment transactions, said for BBBEE to be successful, trusts and charitable organizations should be brought in as partners in the ownership structure of companies.

“And the objectives of these foundations, trusts, could be either employee related, socioeconomic development related from addressing the poorest of the poor, building schools, hospitals, etc, or enterprise development related not an individual,” said Baumann.

Mesatywa said by encouraging companies to support entrepreneurs, skills training and employee ownership, the program would go a long way toward reducing the poverty and unemployment still affecting South African blacks.

You May Like

Lion Cecil's Killing Sparks 'Canned Hunting' Debate in S. Africa

Conservationists believe incident, which triggered worldwide outrage, will reshape debate about practice in which hunters are allowed to target animals bred for hunting More

US Urges Taliban to Stay With Afghan Peace Talks

Top US Afghan diplomat also meets with Pakistani, Afghan officials following news of Mullah Omar's death More

Environmentalists Issue Warning on Mekong Biodiversity

Scientists say decades of economic development, hydropower-dam construction, lax law enforcement and trafficking have taken their toll More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Astronauts Train Underwater for Deep Space Missionsi
|| 0:00:00
...    
🔇
X
George Putic
July 30, 2015 8:59 PM
Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.
Video

Video 'Metal Muscles' Flex a New Bionic Hand

Artificial limbs, including the most complex of them – the human hand – are getting more life-like and useful due to constant advances in tiny hydraulic, pneumatic and electric motors called actuators. But now, as VOA’s George Putic reports, scientists in Germany say the future of the prosthetic hand may lie not in motors but in wires that can ‘remember’ their shape.
Video

Video Russia Accused of Abusing Interpol to Pursue Opponents

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video 'Positive Atmosphere' Points Toward TPP Trade Deal in Hawaii

Talks on a major new trade agreement among 12 Pacific Rim nations are said to be nearing completion in Hawaii. Some trade experts say the "positive atmosphere" at the discussions could mean a deal is within reach, but there is still hard bargaining to be done over many issues and products, including U.S. drugs and Japanese rice. VOA's Jim Randle reports.
Video

Video Genome Initiative Urgently Moves to Freeze DNA Before Species Go Extinct

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.
Video

Video Scientists: One-Dose Malaria Cure is Possible

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.
Video

Video 'New York' Magazine Features 35 Cosby Accusers

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.

VOA Blogs