Their bromance may have been short-lived, but the one thing US President Donald Trump and his oligarchic billionaire friend-turned-overnight-enemy Elon Musk succeeded in doing, at least in the South African context, was to put BEE on trial at a global level.
Long before President Cyril Ramaphosa led a delegation to the Oval Office to try to convince Trump that he shouldn’t skip the November G20 Summit in Johannesburg on the back of false claims about a genocide of white farmers, Musk was calling out the country’s BEE laws as “racist”, “utterly wrong and improper”.
In February, when Ramaphosa denied on X that the country’s government was confiscating privately-owned land — stating that his government was rooted in the rule of law and constitutionalism — Musk, who owns the social media platform, retorted: “Why do you have openly racist laws?”
The source of Musk’s grievance, it soon transpired, was deeply personal. BEE rules in the telecommunications sector meant that he would have to sell a 30% stake to black investors if his low-orbit satellite company Starlink was to get a licence to operate in South Africa.
“Now I’m in this absurd situation,” the world’s richest man would later tell a Bloomberg journalist in Doha, Qatar, “where I was born in South Africa but can’t get a licence to operate Starlink because I am not black.”
His anti-BEE statements, like Trump’s claims about “white genocide”, have put an international spotlight on government policies aimed at redressing the racial and gender imbalances created by the country’s not so distant apartheid past. Fortunately for the Ramaphosa administration and other supporters of broad-based BEE, affirmative action and other corrective measures, most of the international community either accept the path South Africa is navigating to become a “normal” society or do not feel it their business to interfere.
In the US it is yet to be seen whether Trump's fallout with Pretoria-born Musk will lead to his administration abandoning the widely discredited claim of “genocide” and losing interest in the highly controversial programme of accepting Afrikaner “refugees”.
But while the international spotlight may have already begun shifting away from South Africa’s policy choices forced by her racist past, the short-lived Trump-Musk alliance has reinvigorated the BEE debate within the country and given new impetus to those who blame transformation processes for slow economic growth and high unemployment.
From right-leaning political groups such as AfriForum, Solidariteit and the Freedom Front Plus in the GNU, to liberal organisations such as the Free Market Foundation (FMF) and the Centre for Development and Enterprise (CDE), calls to either scrap or review BEE and related policies have been rising.
In its submission opposing plans by the department of trade, industry & competition to establish a R100bn Transformation Fund, the CDE calls for “a comprehensive, evidence-based review” of all transformation policies.
“The review should assess what aspects of B-BBEE have worked, what have not, and at what cost — drawing on 20 years of implementation data... It should assess who has benefited from the current policies and approaches... It must also find a way to weigh the commercial and economic costs of existing policies, including their impact on investment, job creation and the competitiveness of black-owned businesses,” the think-tank said.
“South Africa’s economy would grow without BEE or affirmative action,” wrote FMF’s Nicholas Woode-Smith on the organisation’s website in April. “Investors would flock to our shores...
“Without BEE, corruption will become harder, as the procurement process becomes more about merit and cost, than connections and scorecards.”
Fresh from his visit to the White House, Ramaphosa found himself facing the same kind of opposition to BEE from one of his own partners in the GNU during a parliamentary question and answer session.
If anything, that passionate exchange with Corné Mulder of the FF+ revealed a Ramaphosa not about to abandon these policies just because Washington doesn’t like them.
If anything, that passionate exchange with Corne Mulder of the FF+ revealed a Ramaphosa not about to abandon these policies just because Washington doesn’t like them
One critic puts it down to the fact that the president is himself a direct beneficiary of BEE and therefore finds it hard to admit that while the system made him fabulously wealthy, it is simply not working for the majority.
But Business Day columnist John Dludlu believes the president is right to stand firm and should not be guilt-tripped into not defending a policy he helped write into law when he was out of politics just because he is one of its biggest beneficiaries.
“Much of the criticism is misplaced and misinformed. For example, BEE cannot be blamed for South Africa's worsening poverty, inequality and joblessness,” he said.
Dludlu wants more of the big name and billionaire BEE beneficiaries to speak up in defence of the policies against rising attacks.
What better way to push back against claims that BEE is inherently corrupt and only benefits an undeserving few than to have the likes Patrice Motsepe, Wiphold’s Gloria Sedibe, Sipho Nkosi, Saki Macozoma and scores of others speak about the good work they do in uplifting disadvantaged communities?
Referencing a Covid-era case in which the government was taken to court for making assistance to the then troubled tourism industry conditional on BEE compliance, Dludlu recently wrote: “When anti-BEE forces took the government to court none [of the billionaire beneficiaries] stood with the government as a friend of the court.”
It is a sentiment shared by international relations & co-operation minister Ronald Lamola. Speaking at the Black Business Council (BBC) summit this week, Lamola lamented what he sees as the absence of black business and intelligentsia voices in defence of the transformation project.
“Where are the black solidarity movements to stand up and defend the rights of South Africans? Where are the black organisations when government is taken to court to challenge some of our transformation laws?
“The revolution will not defend itself. As the advanced detachment of society, you should act as the vanguard of the constitution when it is under attack, particularly the transformation laws or anything that threatens our social cohesion,” said Lamola.
If big business, parties and organisations on the right and the Trump administration aren’t happy with the government forging ahead with these policies, what emerged at this summit is that black entrepreneurs and companies are frustrated and angry over the slow pace of change. They are also apprehensive and deeply suspicious of the GNU’s commitment to economic transformation.
As business personality and professor of practice at the Johannesburg Business School, Bonang Mohale, put it during a panel discussion with Lamola: “What we should ask ourselves is: What can this ANC government do in a coalition with the DA that it could not do with an unfettered majority for 30 years?”
Part of the problem, in Mohale’s view, is that the administration is not clear about its priorities.
“The Afrikaners did not have a state of the nation address with 31 priorities. They had one problem to solve. It was called the Poor White Problem. By 1972, they had eliminated it completely. This is our government, a black government. And yet in the 31 years of democracy the only three communities that made money are not you and I. It is the Afrikaners, the Jewish people and the Muslims — because they have got capital,” Mohale said to great applause.
As is often the case in such gatherings, and for good reason, access to capital was the single issue most frustrating for speakers and delegates.
“For years,” complained BBC president Elias Monage, “we have spoken about transformation, but words alone will not change the economic reality and the current patterns of ownership and control of the means of production.
“What we need is an intentional policy, financial access and unwavering commitment from government, financial institutions and corporate South Africa.”
What hinders economic growth is not BEE, Monage argued, but the control of the economy by a few conglomerates.
“Across various industries, a few powerful conglomerates control the economic landscape, making market access and competition increasingly difficult for smaller businesses, particularly black-owned enterprises.
“While these corporates have played a pivotal role in the South African economy, the reality is that their overwhelming dominance has created barriers to entrepreneurship, innovation and inclusive participation.
“Consider the retail sector where market concentration among players limits smaller black retailers from securing prime location, supplier contracts and competitive pricing advantages,” he said.
But for former public protector Thuli Madonsela, the transformation debate should go far beyond ownership so as to benefit all historic victims of colonialism, apartheid and patriarchy.
“We need to rethink BEE because with BEE you are feeding the fat cow and then saying it must poop so that the others can get something. That is just not a good formula.
“But, yes, we must do BEE, this where I am glad the president defended B-BBEE... But I am saying the formula needs tweaking so that it meets more people and, also, bulges our middle class.
“For example, people who have already benefited from BEE, why should they collect BEE points when they are tendering? That’s the problem, the formula is not reparative. It is just black. But we have to look at: ‘are you black and are we still repairing the damage of apartheid?’”
Perhaps now that Trump and Musk seem to be out of the equation and Ramaphosa has confirmed that he still intends convening a national dialogue, the debate about economic inclusion should dominate that gathering — not as some kind of BEE inquisition, but as a way of finding the best route to a South Africa where race will finally not be an issue.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.