7 Dec 2025
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When South Africa’s President’s Office declared on June 9, 2025 that Broad-Based Black Economic Empowerment is "not just a policy choice but a constitutional imperative," it wasn’t just a political statement—it was a battle cry in a country still wrestling with the ghosts of apartheid and the weight of unfulfilled promises. The timing? Amid a deepening economic crisis, rising unemployment, and a growing chorus of critics who say the policy has become a tool for the few, not the many. Just months later, on November 14, 2025, Deputy President Paul Mashatile stood before the National Assembly and said plainly: "Let’s correct that. Let’s make amendments." No repeal. No revolution. Just refinement.
Why B-BBEE Still Matters—And Why It’s Under Fire
Since its formal inception in 2003, Broad-Based Black Economic Empowerment has shaped how businesses operate in South Africa. It’s not just about ownership—it’s about management control, skills training, procurement from black-owned firms, and enterprise development. The Department of Trade, Industry and Competition (dtic) has overseen a system where companies earn B-BBEE points based on how well they meet these criteria. The goal? Redress the racial imbalances of the past. The reality? A 2025 AccessEcon study found that small businesses—Exempt Micro Enterprises and Qualifying Small Enterprises—often have to give up ownership just to qualify for high ratings, creating perverse incentives that hurt rather than help.
Meanwhile, the Democratic Alliance (DA) has pushed back hard. In December 2025, it presented its Economic Inclusion for All Bill to the National Economic Development and Labour Council (NEDLAC), arguing that B-BBEE has become a "political loyalty program." Their critique? That a small group of politically connected individuals have captured the benefits, while millions remain unemployed, underemployed, or locked out of capital.
The Government’s Counterargument: Progress, But Not Enough
Government Spokesperson Mr. Sandile Nene didn’t mince words in his October 2025 statement: "Disparities in ownership, management, and income distribution remain stark." That’s an understatement. According to the latest dtic data, while black South Africans now own roughly 30% of corporate equity—up from under 5% in 1994—median household income for black families still hovers at just 42% of white households. And women? They hold less than 15% of board seats in top-tier firms, despite the Black Industrialists Programme having backed over 1,200 ventures since 2017.
The administration points to the Transformation Fund, a R500 million initiative launched in 2024 to back innovative black-owned startups. It’s a step. But critics ask: Why are so few of these startups scaling beyond their first funding round? The answer, many experts say, lies in access to credit. In a June 9, 2025 statement, the President called on private banks to "review their lending practices." The message was clear: B-BBEE can’t work if banks still demand collateral most black entrepreneurs simply don’t have.
What’s Being Changed—And What’s Not
Here’s the twist: The government isn’t throwing out the rulebook. It’s rewriting the footnotes. The dtic review, underway since early 2025, is focused on three fixes: eliminating the "once empowered, always empowered" loophole, expanding equity-equivalent schemes (like employee share ownership), and making procurement rules more transparent. The DA’s bill echoes this, proposing to shift focus from ownership percentages to measurable outcomes—like jobs created or skills transferred.
But here’s the catch: The DA’s alternative scorecard, while appealing in theory, lacks funding mechanisms. Meanwhile, the government’s plan still relies on the same institutions—banks, auditors, certification bodies—that have been criticized for gatekeeping. As one anonymous dtic official told a journalist off the record: "We’re trying to fix a car while driving it. The brakes are worn, but we can’t stop."
The Real Test: Will This Reach the Margins?
The most telling indicator of B-BBEE’s success won’t be the number of black CEOs or the size of corporate B-BBEE certificates. It’ll be whether a young woman in Limpopo can get a loan to start a solar panel installation business. Whether a single mother in the Eastern Cape can win a municipal contract to supply school meals. Whether a disabled entrepreneur in Kimberley can access mentorship without having to navigate a labyrinth of bureaucracy.
The Public Procurement Act mandates that 30% of government contracts go to black-owned businesses. But in practice, less than 12% reach small or emerging enterprises. Why? Because the rules favor firms with audited financials, registered offices, and legal teams—things most rural entrepreneurs can’t afford. The government’s new push to include women, youth, and persons with disabilities is welcome. But without targeted support—grants, incubators, simplified compliance—it’s just another checkbox.
What’s Next? The 2026 Deadline
The dtic is expected to release its final recommendations by March 2026. That’s when the real drama begins. Will Parliament adopt the DA’s non-racial, outcomes-based model? Will the ruling party compromise on ownership thresholds? And will private sector players—especially mining giants and telecoms—actually change their supply chains, or just tweak their reports?
One thing is clear: South Africa’s economy can’t afford another decade of symbolic progress. The people who need empowerment the most aren’t watching boardrooms. They’re watching whether the next generation has a chance to build something of their own.
Frequently Asked Questions
How does the B-BBEE review affect small black-owned businesses?
The current review aims to remove barriers that force small businesses to surrender ownership just to qualify for high B-BBEE ratings. New proposals include equity-equivalent schemes and simplified compliance for Exempt Micro Enterprises, which could let entrepreneurs earn points through job creation or skills training instead of handing over shares. But without funding for legal and accounting support, many still won’t be able to navigate the system.
Why is the Democratic Alliance pushing for an alternative to B-BBEE?
The DA argues that B-BBEE has been captured by a politically connected elite, leaving the poorest behind. Their Economic Inclusion for All Bill proposes a race-neutral, outcome-based model focused on actual economic disadvantage—not race or political ties. Critics say this ignores South Africa’s racial history, but supporters argue it’s the only way to build a truly inclusive economy without creating new divisions.
What role do banks play in the success of B-BBEE?
Banks control the flow of capital, and most black-owned businesses still face higher interest rates and stricter collateral requirements. The President’s June 2025 call for banks to review lending practices was a direct response to data showing that only 18% of SME loans in 2024 went to black-owned firms, despite them making up over 60% of all small businesses. Without affordable credit, even the best B-BBEE policies are just paperwork.
Has B-BBEE reduced poverty in South Africa?
The evidence is mixed. While a small black middle class has emerged—particularly in finance and mining—national poverty rates have barely budged since 2000. The Foundation for European Progressive Studies concluded in 2025 that B-BBEE has created wealth for some, but not broad-based economic mobility. Unemployment remains at 32.1%, and youth unemployment at 45.6%. Without job creation tied to empowerment, poverty persists.
What’s the difference between B-BBEE and the DA’s Economic Inclusion for All Bill?
B-BBEE uses race-based targets for ownership, management, and procurement. The DA’s bill proposes replacing those with a non-racial, outcome-driven scorecard based on factors like income level, geographic disadvantage, and employment creation. It would also eliminate "once empowered, always empowered," ensuring that only businesses actively contributing to inclusion get benefits. But it lacks the funding mechanisms the government has built into its Transformation Fund.
When will we know if the B-BBEE review succeeded?
The dtic’s final report is due March 2026, but real success won’t be measured until 2028 or 2029—when we see if black-owned SMEs are growing, hiring, and accessing capital at higher rates. The true test? Whether a single mother in Soweto can start a tech repair shop, get a loan, and hire three employees—not just because she’s black, but because the system finally works for her.