We need to change – not reject – black economic empowerment – The Mail & Guardian

Skilled but no jobs: South Africa’s history of dispossession and exclusion demands purposeful intervention to build a more just and inclusive economy. Photo: Delwyn Verasamy/M&G

More than two decades since its inception, black economic empowerment (BEE) has not delivered on its promise of economic redress for the majority of South Africans. 

Recent developments have reignited public debate. The Democratic Alliance (DA) has launched a court challenge against the Employment Equity Amendment Act, specifically targeting section 15A. This section empowers the minister of employment and labour to set numerical targets for equitable representation of designated groups. The DA argues that these targets amount to unconstitutional, rigid racial quotas that harm economic growth and violate individual rights.

BEE was introduced to correct the deep economic disparities of apartheid. While it has made some gains, most notably the growth of a black middle class, it has failed to catalyse broad-based economic participation or significantly reduce structural inequality.

But this critique is not a rejection of the principle of economic redress. South Africa’s history of dispossession and exclusion demands purposeful intervention to build a more just and inclusive economy. Redress remains essential, particularly in a society where inequality continues to follow racial lines. But the current model of BEE is not the vehicle that will take us there. 

To be considered middle class in South Africa, one must earn R15,000 and R50,000 a month. Today, the black middle class numbers about 3.4 million people, or 7%, of the black African population. With a spending power of R400 billion annually, this segment plays a vital role in the consumer economy, driving growth in sectors such as retail, real estate and banking.

This progress, however, is far from sufficient. South Africa’s population is about 60 million, and more than half still live in poverty. While the black middle class has grown by more than 30% in the past decade, 33 million South Africans remain impoverished. In contrast, 40% to 50% of the 4.4 million white South Africans are considered middle class, a stark reflection of persistent racial disparities rooted in historical advantage.

Youth unemployment at crisis levels. BEE, despite its noble intent, has not significantly altered the economic trajectory of the country’s youth. Youth unemployment in South Africa is the highest in the world. According to Statistics South Africa’s 2024 data, more than 4.9 million young people aged 15 to 34 are not in employment, education or training (NEET). 

In the first quarter of 2025, the unemployment rate among youth aged 15 to 24 was 59.6%, for youth aged 15 to 34, the overall unemployment rate stood at 45.5%, nearly 1.9 million young people were classified as discouraged work-seekers, about 58.7% of unemployed youth had no previous work experience and the North West and Eastern Cape provinces recorded youth unemployment rates of 58.8% and 54.3%, respectively.

The structural barriers that prevent young people from economic opportunities remain largely unaddressed. Poor-quality schooling, lack of access to capital and networks, delayed entry into the labour market and limited exposure to work experience continue to lock young people out of the economy.

Although BEE includes youth-oriented components such as skills development and enterprise support, these efforts have been superficial and fragmented. They have not created sustainable pathways into employment or reshaped the labour market to enable long-term inclusion. Too often, the private sector’s BEE initiatives are limited to box-ticking, offering bursaries or internships for compliance points rather than as part of a genuine strategy for transformation. These initiatives tend to be short-term, urban-centred and disconnected from labour market demands.

The result is a cycle of unfulfilled promises. Skills programmes churn out graduates with little to no employment prospects. Enterprise development schemes favour established players with political ties, while young entrepreneurs, particularly those in rural or informal sectors struggle to access supply chains, funding and regulatory support.

After three decades, BEE has not dismantled structural barriers to economic participation. What is needed is not the abandonment of redress, but a fundamental reimagining of how it is pursued, one that is rooted in equity, participation and structural transformation, rather than symbolic compliance and patronage.

The broad-based BEE commission has reported a rise in fronting practices, where companies misrepresent ownership or employment statistics to qualify for empowerment status. This not only undermines the policy’s credibility but also further excludes youth from opportunity. In practice, the system is designed to reward those already in the room, not those trying to get in.

The 2022 National Human Development Report paints an even starker picture: the face of unemployment in South Africa is young, black and female. During the third quarter of 2021, the unemployment rate among black South Africans was 39%, nine percentage points higher than coloured South Africans and 30 percentage points higher than white people. 

Educational attainment also plays a role: 40% of unemployed youth had not completed matric, while only 13% of unemployed youth held a tertiary qualification.

Despite frequent references to “emerging enterprises,” the system does little to support genuine youth entrepreneurship. Without serious efforts to reduce red tape, promote youth-led innovation and align procurement with inclusive growth, economic empowerment through entrepreneurship will remain a hollow promise.

BEE in its current form will not solve the youth unemployment crisis. It will not level the playing field for future generations. And it will not deliver the economic justice that has long been promised to South Africans.

What is needed is a fundamental reimagining of economic inclusion. This requires moving beyond elite redistribution and towards broad-based economic renewal. South Africa must invest in quality basic education, expand public works and guaranteed jobs programmes for youth, radically reform procurement to favour township and rural businesses, and consider progressive policies such as a universal basic income.

Most importantly, young people must be placed at the centre of policy design, not as passive recipients of aid, but as co-creators of the economic future.

What is needed is real opportunity, rooted in justice, driven by equity, and delivered with urgency.

Tara Roos is a policy writer, researcher and political analyst.