Black Economic Empowerment: South Africa’s Failed Attempt at Redress.
By Joseph Kennedy.
When Black Economic Empowerment (BEE) was introduced by the government, the promise of a new economic landscape came with it. Yet over thirty-five years after the official end to the country’s apartheid, South Africa remains one of the most divided societies in the world. Despite billions in business deals and endless government scorecards, inequality has barely shifted, unemployment has worsened, and a handful of connected elites have become the faces of the failed movement.
The Black Economic Empowerment movement emerged in the years after Nelson Mandela’s African National Congress party took office in 1994, when the new government inherited an economy completely divided by race. Apartheid had locked the Black majority out of ownership, skilled work, and corporate leadership. BEE was designed to be the economic counterpart to South Africa’s political liberation.
Formalized through the Broad-Based Black Economic Empowerment Act in 2003, the policy set out to expand ownership, provide employment opportunities, and grow a Black middle class that had been racially excluded for generations. In practice, this meant a corporate scorecard system that rewarded companies for Black ownership stakes, affirmative action in recruitment, and procurement from Black-run businesses.
These scorecards covered metrics including who sat on boards and executive teams, recruitment and promotion of black employees, money was invested in training and skills development, and trade with black-owned suppliers. Businesses could climb the BEE “levels” by hitting these targets, and a higher score made it easier to win government contracts or become a preferred supplier for large corporations.
From the government’s perspective, this mix of ownership transfers, hiring targets and skills investment was supposed to create a broad-based Black middle class and open pathways for new Black entrepreneurs. At its launch, BEE was promoted as the blueprint that would finally give Black South Africans a meaningful place in the economy they had long been cut out of.
So, what went wrong? The issue wasn’t the idea; it was how it was implemented. Rather than creating broader opportunities, the first wave of empowerment deals instead placed enormous quantities of wealth in the hands of a small group of politically connected elite. Billions of South African Rand in share transfers went to fewer than 100 people, according to governance researchers. As a result, most Black South Africans saw little change in income, employment, or mobility.
Companies often treated BEE as a compliance exercise, ticking boxes on ownership targets without building real ground skills or supporting new entrepreneurs. Procurement rules, designed to favor Black-owned suppliers, were frequently exploited through “fronting”, where businesses appointed Black partners on paper to secure contracts.
Once politics became involved, the trouble only deepened. Procurement around state-owned giants like Eskom and Transnet became crowded with well-connected government officials, inflating prices and driving the corruption crisis that later defined the state capture years. So as the wider economy stalled, the policy’s promise of change was replaced by rising frustration from a middle class that was supposed to be expanding, not shrinking.
In 2025, the impact of BEE’s failures is plain to be seen in South Africa’s economy. Inequality has barely shifted, with the average white household still earning more than four times the income of a Black household, according to Stats SA.
Unemployment tells the same story, where joblessness sits at around 37% for Black South Africans but falls to single digits for their white peers. The policy’s narrow focus on share deals and political insiders left millions without the skills, capital or mobility needed to break into the formal economy. On the ground, this has meant fewer new jobs, higher living costs, and a squeeze on families trying to climb into the middle class. South Africa is now left with the worst of both worlds; a transformation project that hasn’t transformed much, and an economy struggling to grow under the weight of inequality it was supposed to fix.
BEE was initially implemented with the aim of levelling the playing field and reducing the stark contrast between ordinary white and black families. Instead, it created a new political oligarchy, where wealth and opportunity circulate among the same well-connected names while millions remain shut out. The policy’s original promise hasn’t disappeared, but it now depends on shifting away from elite share deals and towards genuine skills, entrepreneurship, and most importantly, economic opportunity. Without that reset, equality, prosperity and economic freedom will remain something South Africans talk about, rather than experience.
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