Earlier this week, the Democratic Alliance (DA) released a draft empowerment law that would replace race with actual disadvantage as the basis for redress and prioritise value in government procurement.

DA policy director Mat Cuthbert said successive African National Congress (ANC) administrations had failed to address the root causes of inequality by implementing crude race-based procurement policies: “to benefit themselves at the expense of the people.”

He said the DA’s Economic Inclusion for All Bill seeks to amend the Public Procurement Amendment Act of 2024 to repeal all race-based preferential provisions and replace them with a system that targets poverty as the proxy for disadvantage. The Bill, he added, encourages genuine empowerment by rewarding job creation, poverty reduction, skills enhancement, and environmentally sustainable practices.

Economic underperformance

The DA’s proposal comes as South Africa’s economy continues to underperform. Growth has stalled far below the emerging-market average, while unemployment remains more than six times higher than the global rate.

Economists and investors increasingly identify the costs of black economic empowerment (BEE) compliance as a major cause of weak growth and joblessness.

Polling also shows most South Africans have grown weary of race-based empowerment and favour a shift towards policies that measure disadvantage beyond race and align procurement with merit and value.

The ANC, however, insists it will not abandon the core of BEE policy. Party spokesperson Mahlengi Bhengu told reporters that: “[the DA proposal] must be challenged by all democracy-loving people and patriots, many of whom are beneficiaries of this particular policy [BEE]. People are rising in the corporate sector and in the public sector as executives…many of those people are proudly beneficiaries of BEE.”

Bhengu added: “We are a country founded on dialogue, and the ANC is always willing to engage. All I can stress, though, is that there will not be a day when BEE is scrapped.”

President Cyril Ramaphosa told reporters: “The issue of BEE as it’s being raised by the DA - I have not yet seen their proposals. Currently, we have a BEE policy that is rooted and underpinned by the Constitution. If anyone wants an amendment to the BEE policy, they must table their proposals and they must be taken for discussion to Parliament. At the moment, BEE regulations stand as they apply without any dilution.”

Frans Cronje told The Common Sense that the ANC’s willingness to discuss the DA’s ideas is significant.

“It’s no secret that even within the ANC there’s a growing understanding that the costs of aspects of BEE policy have risen to the point where they threaten what future hold on power the ANC may still exert,” he said.

“Voter opinion has shifted to where it is open to a new way to do empowerment. To an extent, the ANC has moved too slowly to address this shift, which has allowed the DA to overtake it in shaping how South Africans think about empowerment and what the government should do to make it happen. Given that empowerment was the foundational policy of the ANC, the significance of this shift cannot be understated,” Cronje said.