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

Could Nemtsov Threaten Putin in Death as in Life?

Dynamic and debonair opposition leader had supported liberal economic reforms, criticized Russian president's aggression in Ukraine More

Oil Smuggling Highlights Challenges in Shutting Down IS Finances

Pentagon spokesman says Islamic State 'certainly continues to get revenue from the oil industry black market' but that airstrikes have made a dent More

India Focuses on Infrastructure, Investment to Propel Economy

Government expects economy to grow at 8 to 8.5 percent in next fiscal year More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More