This week, the Democratic Alliance (DA) came out swinging against Broad-Based Black Economic Empowerment (B-BBEE), one of the key pillars of the African National Congress’ (ANC) policy agenda.

This is a welcome move and comes amidst growing public criticism of B-BBEE, which has hamstrung South Africa’s economy and enriched a politically connected elite at the expense of everyone else. The DA can go even further by refusing to implement B-BBEE where it governs. But will it be so bold?

At a press conference in Johannesburg on Monday, DA Head of Policy and Member of Parliament, Mat Cuthbert, launched the DA’s Economic Inclusion for All Bill, a private member’s bill which seeks to remove race-based criteria in preferential procurement policy and replace these criteria with a system that targets poverty as a proxy for disadvantage.

Cuthbert noted that B-BBEE has done little of what it purported to do when it was introduced in 2003: reduce black poverty and alleviate black unemployment (which reached 36% in the last quarter of 2024 compared to white unemployment of 7%).

The DA correctly blames B-BBEE for subverting state tender processes to create feeding troughs of patronage. This allows corrupt ANC cadres to guzzle taxpayer money – all while singing the song of “transformation”.

By way of evidence, the DA cites the research of Wits University Professor William Gumede, who estimates that a hundred families have benefited directly from BEE schemes to the tune of R1 trillion. Nice little oligarchy you’ve got there.

Sentiment shift

Pressure from civil society has played a big role in shifting the discourse on BEE. Business group Sakeliga has been fighting various manifestations of B-BBEE in court, while the Institute of Race Relations (IRR) – a proponent of non-racialism since it was founded in 1929 – has developed its own model legislation in the form of its No More Race Laws Bill.

For our own part, the Free Market Foundation (FMF) – together with the Solidarity Research Institute – published a report in June on the Costs of B-BBEE Compliance. The report conservatively estimates the overall cost of B-BBEE to the South African economy as approximately R290 billion per year – a total of R5 trillion in lost economic activity since the inception of the policy. Without B-BBEE, South Africa’s GDP could have grown by approximately 2–4% more per annum and created 4 million more jobs.

The FMF/Solidarity report triggered a wave of criticism from the vested interests in the B-BBEE ecosystem, including law firms, compliance consultants, and black business associations. We clearly hit a nerve.

While local mainstream media have been reluctant to speak ill of B-BBEE, this appears to be slowly changing and international newspapers like The Economist and the Financial Times have also reported critically on the policy. The zeitgeist is shifting, and the DA is riding the wave.

Will the Bill pass?

On Tuesday, the DA gazetted its Bill in Parliament, with Cuthbert saying that this was: “the first step in the legislative process that will bring South Africa a new, inclusive empowerment model ending decades of BEE failure."

I applaud the scope of Cuthbert’s ambition, but it is not matched by the political reality.

While Cyril Ramaphosa confessed that he had not read the DA’s Bill, he said that it would have to go through the regular processes in Parliament. Given that he can hardly be bothered to meet with his coalition partners and that he has repeatedly defended the “constitutional imperative” of B-BBEE, it is safe to assume that he has no genuine interest in finding a non-racial, efficient and transparent alternative to B-BBEE.

And judging by the reactions of ANC spokespeople and trade union partners, neither is the Tripartite Alliance. Without the backing of the ANC in Parliament, the chances of the DA’s Bill being passed are next to zero. Such are the dynamics of the Government of National Unity (GNU).

Do it anyway

The DA should not despair. Public opinion is on their side, and they can use this moment to press their advantage. The best way to realise their vision of non-racial procurement is to implement this policy where they govern. DA representatives don’t need to wait for legislative changes; they can just do it.

The DA-run Western Cape Provincial Government (WCPG) is one place to start. Its procurement system is interwoven with B-BBEE requirements. The tenders page of the WCPG website redirects users to etenders.gov.za, a central procurement portal administered by the National Treasury. A cursory glance through the listings shows many examples of the WCPG imposing B-BBEE equity requirements on prospective suppliers.

To take just one example, a current open tender for the procurement of legal services (tender number FMA 0003-2025/26) specifically lists B-BBEE criteria as a consideration in adjudicating bids for law firms to become members of a panel of legal advisors to the Premier’s office. As shown in the screenshots below, bidders are at a disadvantage if they are not B-BBEE compliant: 20% of the bid is assessed on B-BBEE criteria, with the remaining 80% on price (with B-BBEE compliant firms given preference in the event of a tie-break):

Some might argue that the WCPG is an organ of state that must play by the rules set by National Treasury, since it is the source of about 95% of the province’s budget. Non-compliant firms are still able to bid, after all, they just lose out on 20 out of 100 points.

Nevertheless, if the DA and the provincial administration are serious about non-racialism and good governance they should find a way of circumventing the more onerous provisions of the Preferential Procurement Policy Framework Act (PPPFA). If it faces resistance from Pretoria, then so be it. Fight it in court if you have to, for this is a just cause worth fighting for.

The same goes for DA members of cabinet, who can and must resist B-BBEE in their respective portfolios. While DA leader, John Steenhuisen, has rightly criticised B-BBEE during this latest campaign, a year ago he was defending B-BBEE requirements in his own Department of Agriculture, where he is Minister.

In October 2024, Sakeliga revealed that Steenhuisen’s Director-General, Mooketsa Ramasodi, had renewed three regulations subjecting reduced-duty imports and exports of agricultural products to B-BBEE criteria. This formed part of the department’s broader AgriBEE Plan and AgriBEE Enforcement Guidelines, which included the establishment of various race-based transformation funds for the sector.

When asked by Sakeliga why he did not withdraw these policies, Steenhuisen reacted angrily, accusing Sakeliga of spreading misinformation and arguing that B-BBEE codes of good practice originated in the Department of Trade, Industry and Competition in 2017, long before his appointment as Minister. He defended the continuation of these codes in his department as mere “muscle-memory” from the previous administration.

Herein lies one of the many contradictions of the GNU. While DA ministers are nominally in charge, they must manage thousands of hostile deployed cadres in the civil service who don’t necessarily agree with their policy agenda.

Nevertheless, these annual codes will be up for renewal soon and Minister Steenhuisen will have to decide whether or not to sign them. He has the power to stay his pen. The same goes for other public representatives and officials in DA-controlled governments.

While the Economic Inclusion for All Bill might be dead on arrival, the DA can still scrap B-BBEE in the departments it runs on Monday morning. It just needs to be brave enough to try.

Ansara is CEO of the Free Market Foundation.