BEE LOOTING!

BEE Draft Amendments: R100 Billion Headed for a Central Fund – And Why You Can Kiss That Money GoodbyeIf the government pushes through its latest plans for Broad-Based Black Economic Empowerment, or BEE, ordinary South Africans will watch another R100 billion disappear into a black hole. The proposal, now out for public comment, aims to create a massive central Transformation Fund. Companies would divert money they currently spend on their own enterprise and supplier development straight into this pot. The fund would then hand it out to black-owned businesses. Sounds helpful on paper. In reality, it is another costly experiment that history shows will achieve very little for the average person.The idea is simple enough. Over five years the fund would collect R100 billion, about R20 billion a year. Much of it would come from the three percent of after-tax profits that firms already set aside under BEE rules. Instead of choosing their own suppliers, training their own people or backing promising local partners, companies could simply write a cheque to the central fund and tick the compliance box. Points on the BEE scorecard would flow immediately. The money, once paid in, would not come back. It would be controlled centrally and spent according to government priorities.For everyday South Africans trying to put food on the table, keep a job or start a small business, this should ring alarm bells. We have seen this movie before. Since BEE began in earnest more than twenty years ago, billions have been moved around in the name of transformation. Yet unemployment remains stubbornly high, especially among young black South Africans. Many townships and rural areas look much the same as they did decades ago. The policy has created a small layer of well-connected winners while leaving the majority behind.The track record is not encouraging. Time and again, BEE deals have funnelled opportunities to politically linked individuals and families rather than to ordinary entrepreneurs. Fronting, where companies pretend to have black owners while real control stays elsewhere, has become a cottage industry. Tenders awarded under empowerment rules have sometimes delivered sub-standard work or no work at all, with the funds vanishing into private pockets. Corruption cases tied to empowerment contracts fill the headlines year after year. This is not a glitch in the system. It is how the system has operated.Supporters argue that a central fund will bring more transparency and help genuine black businesses that struggle to access capital. But centralising control rarely improves outcomes. It concentrates power in fewer hands, making it easier for insiders to direct the flow. Once money enters a big government-linked pot, oversight tends to weaken. We have watched this pattern with state-owned enterprises and special funds before. Billions go in. Results stay thin. Accountability is hard to find.Ordinary taxpayers and workers ultimately carry the cost. Companies facing higher compliance burdens pass those costs on through higher prices or slower hiring. Investment that could create real jobs gets delayed or redirected. Foreign firms already wary of South Africa’s policy maze may simply look elsewhere. The people who need jobs and opportunities the most pay the price for policies that sound righteous but deliver little.South Africa does need broader economic participation. The best way to achieve that is through growth, education, skills development and cutting red tape so that thousands of new businesses can start and thrive. Pouring more money into a centralised empowerment fund repeats the same top-down approach that has failed to transform lives on a meaningful scale for two decades.If this draft becomes law, expect the usual cycle. Announcements of big intentions, some high-profile disbursements, and then quiet stories of waste, delays and political favouritism. The R100 billion will be spoken about in grand terms. Most of it will never reach the people it is meant to help.Everyday South Africans deserve better than another expensive experiment dressed up as progress. Before any more public or private money is committed to this fund, we should demand a honest look at what previous billions have actually achieved. The evidence suggests the answer is not much. And that is exactly why you should worry about where this next R100 billion is headed. It is your economy too