Black Economic Empowerment and its impact on wealth creation in the new South Africa

Abstract

Black Economic Empowerment (BEE) is a transformative government policy of South Africa. It was developed to achieve several key outcomes which include; transferral of wealth and factors of production (capital, land, labour and entrepreneurship) to the previously disadvantaged black population; ensure the development of skills and employment equity; and to facilitate the development of a black middle class. This would manifest through both the transfer through ownership as well as creation of new enterprises by this new black middle class. A qualitative research method was adopted for this study to gain insights from relevant experts/participants or players in the BEE arena. These participants were beneficiaries, political commentators or financiers of BEE transactions. The research instruments included face-to-face in-depth recorded interviews with questionnaires to obtain the expert’s views on the issue of BEE and its impact on Wealth Creation in South Africa. The results obtained revealed that BEE has had no impact on Wealth Creation for the South African economy. However, individuals often those with political connections have made personal wealth through patronage. The view is that government implement complementary strategies for growth like an Industrial Policy supported by DFIs and other incentives. The ownership element of BEE must be done away with in favour of a focus on enterprise development, Affirmative Action and Skills Development. Copyright