Job creation has been minimal in SA since democracy, claims Solidarity
Solidarity, in collaboration with the Free Market Foundation (FMF), has released a new study outlining the costs associated with BBBEE compliance.
Their findings indicate that these policies have contributed to rising unemployment and have hindered significant economic growth since 1994.
Solidarity CEO Dirk Hermann argues that a complete overhaul of the BBBEE policy would be more beneficial for the country.
'Black Economic Empowerment does not address inequality. It increases as a result of the policy. The paradox is that inequality increases particularly in the black community as a result of a small group of elites, who are being radically enriched.'
Speaking to 702 , prominent businessman Saki Macozoma said BBBEE remains necessary for transformation.
'Empowering people who are previously disadvantaged is the right kind of thing. It may be that the terminology of Black Economic Empowerment is the one that creates the emotion. The fact of the matter is that we need to have the redress, and we have not done it to the extent that we should have.'
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IOL News
6 hours ago
- IOL News
Cosatu, BBC slam Elon Musk's R2 billion investment plan to avoid BEE
Cosatu has slammed Minister Solly Malatsi's attempt to bypass South Africa's 30% local ownership law, purportedly for Elon Musk's Starlink. Image: AP Photo/Francois Mori The Congress of South African Trade Unions (Cosatu) has expressed concerns over the proposed policy direction on equity equivalent investment programmes (EEIPs) in the Information and Communications Technology (ICT) sector. Communications and Digital Technologies minister Solly Malatsi gazetted a policy direction on the role of EEIPs in the ICT sector, aiming to provide policy certainty and attract investment. The policy direction allows companies to meet empowerment obligations through alternatives to 30% ownership, such as investing in local suppliers, enterprise development, and job creation according to Malatsi. However, Cosatu spokesperson Matthew Parks, said the Broad-Based Black Economic Empowerment (BBBEE) Act provides two options for investors that include a 30% shareholder option or an equity equivalent option. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The trade federation giant believes that the BBBEE Act is inclusive and provides accommodating options for all investors and not only for the wealthy. The federation is concerned that the proposed policy direction might allow companies like Starlink to bypass BBBEE requirements. "It's critical that Starlink, like all other investors, comply with the BBBEE Act, whether it is the shareholder or equity equivalent option," Parks emphasised. The BBBEE Act requires companies to offer 30% shareholding opportunities to historically disadvantaged individuals or offer equity equivalents, such as supporting local manufacturers, creating jobs, upgrading worker skills, or investing in local communities. Parks cited examples of companies like IBM and Microsoft that have utilised the equity equivalent option. Cosatu argues that exempting one company from BBBEE requirements would be unfair. "It would not be sustainable to exempt one company as this would be unfair to other companies and undermine the law," Parks said. Cosatu proposes that the government ensures BBBEE reaches those who most need empowerment, namely workers and working-class communities. The federation advocates for worker empowerment through Employee Shareholder Ownership Programmes and support for locally produced goods. The Black Business Council's (BBC) spokesperson Masedi Sesele also shut down the idea saying it would be 'bending of legislation' to accommodate an individual or company. 'Legislation is there for all to comply with, no exception. Otherwise, the country will become lawless…The BBBEE legislation together with the Codes of Good Practice prescribes that any company wanting to do business in South Africa should implement all the elements of the BBBEE codes being ownership, management control, skills development, enterprise and supplier development, and socio-economic development. We don't know how the rumoured R2 billion is going to implement those important elements. 'Anyone who wants to invest in any country must comply with the ownership legislation of that country. This is happening worldwide and is not unique to SA. So BBBEE regulations should never be exempt. Black people, who constitute 97% of the population and own only 3% of the economy, can't continue to be sidelined in the name of foreign investments,' said Sesele. Malatsi through his spokesperson Kwena Moloto said that the policy direction sought to provide the 'much-needed' policy certainty to attract investment into the Information and Communication Technologies (ICT) sector, and specifically with regards to licensing for broadcasters, internet service providers, mobile networks, or fixed and mobile networks. Communications and Digital Technologies Minister Solly Malatsi defends ICT policy, denies special treatment for Starlink, and stresses the need to align sector regulations with transformation laws through equity equivalent investment options. Image: X/IOLGraphics Moloto, on Thursday, saidthat Starlink was not the only company being considered. Starlink, owned by Elon Musk, reportedly plans to launch its services in South Africa ahead of the G20 conference. However, the company intends to bypass the BBBEE law and its 30% ownership requirement, preferring instead to go the Equity Equivalent Investment Programme route where they have offered to invest R2 billion. Political parties such as the EFF, the African Transformation Movement (ATM) and the uMkhonto weSizwe Party (MKP) have been opposed to the proposed changes, citing concerns about Starlink's compliance with BBBEE laws. Political analyst Professor Sipho Seepe criticised the government and president Cyril Ramaphosa for 'forging ahead' with allowing Starlink to operate in South Africa, saying it would set the wrong precedent.. 'The imbroglio regarding Starlink is further proof that South Africa is up for sale under the Ramaphosa administration. This is what you should expect when you have a prepaid presidency. 'Every penny given to support his presidential candidacy was a future investment to ensure that the South African government would succumb to business demands…The very fact that the Ramaphosa regime is willing to suspend legislation and regulations for pieces of silver is not only shameful but also points to a lack of conviction and commitment by the ANC to the demands of Starlink would set the wrong precedent and open the floodgates by like-minded business people,' Seepe said.
IOL News
14 hours ago
- IOL News
US demands on exemption from South Africa's BEE requirements yet to be addressed with Ramaphosa
The Freedom Front Plus delegation in Washington last week. Image: Facebook/FFPlus FF Plus leader Corné Mulder says he has yet to brief President Cyril Ramaphosa on claims that the Trump administration has demanded that US entities be exempted from all Black Economic Empowerment (BEE) requirements as a precondition for normalising bilateral relations with South Africa. There are more than 600 US companies based in South Africa. Mulder made the claims as a FF Plus delegation returned from the US where they met with senior White House officials. This demand was part of a broader set of conditions that include addressing farm attacks, condemning the "Kill the Boer" chant, and ensuring fair market compensation for land expropriation. According to Mulder, the White House officials expressed concern that these conditions have not been adequately addressed. In May, President Cyril Ramaphosa and his delegation embarked on a working visit to the US to meet with US president Donald Trump to help reset strained relations between the two countries, and secure a favorable trade deal after a fallout over the International Court of Justice (ICJ) case against Israel that had been instituted by South Africa. Mulder, who held a press briefing on yesterday, said the delegation was committed to normalising relations between South Africa and the US and described Ramaphosa's visit with Trump in May as 'premature'. "We have a clear understanding of the US Administration's expectations," Mulder said. "The delegation has undertaken to communicate these pre-conditions to both the South African government and the broader public in the interest of transparency, accountability, and the restoration of strong bilateral ties,' said Mulder. Mulder added that they had not gone to the US to complain. He said that discussions on claimed genocide did not arise and they did not meet with the 50 white Afrikaners who were granted refugee status by the Trump administration. Southern African Agri Initiative chairman Theo de Jager, and National Employers' Association CEO Gerhard Papenfus were also part of the delegation. According to business group Sakeliga's CEO Piet le Roux, this development marks a substantial escalation in international pressure against South Africa's 'race-restrictive economic policies'. "The international backlash against BEE and other race-restrictive policies of the South African government is set to escalate further in the coming months and years," Le Roux said. Le Roux noted that the US demand elevates race-restrictive legislation beyond domestic affairs to the level of international economic and diplomatic relations This could lead to a ratcheting up of US-led bilateral or multilateral pressure opposing restrictive legislation in South Africa. Speaking on BEE, De Jager said there was only one way to avoid economic migrants and that was by improving their livelihoods. "The principle here is that there must be equal citizenship…there must be respective property rights and there must be an environment where we can also do business. 'They (Trump administration) said to us that they had heard us on the BEE matter, that it is a non-trade tariff barrier and they said that they would not restore any trade relationship if these preconditions are not adhered to. 'The biggest war of our generation is poverty and hunger and the only way we can deal with that is to create wealth…So we are gradually losing investment because of the likes of BEE and the threat to expropriate your property without compensation. You cannot invest in a country where you are not safe. 'We need an environment that will safeguard investment whether you are black or white. As Afrikaners we don't have access to production financing anymore. We need that kind of access,' said de Jager. Department of International Relations and Cooperation (DIRCO) spokesperson Chrispin Phiri told IOL that the group was pursuing its "own agenda". "Our experience is that State actors do not use non-state actors as intermediaries; therefore, the Freedom Front Plus' (VF Plus) visit and subsequent pronouncements will be viewed as nothing more than their ambitions," he said. Presidency spokesperson Vincent Magwenya did not respond to questions on how the South African government would react to the US demands. However, Ramaphosa has previously indicated that he would not back down from implementing BEE policies. "BEE is not holding back the economy, but rather the concentrated nature of our economy is," Ramaphosa said. He defended using racial designations as a means to address economic disparities, although he acknowledged that this might not be necessary in the future.
IOL News
a day ago
- IOL News
Elon Musk's Starlink will have to wait for years – or find a way around B-BBEE laws ahead of G20
President Cyril Ramaphosa denied harbouring ideas of relaxing economic transformation laws to benefit tech billionaire Elon Musk after his recent visit to the US. In his recent weekly letter to the nation, Ramaphosa reaffirmed South Africa's commitment to broad-based economic policies that are central to fostering inclusive and sustainable economic growth. Image: Presidency Pretoria-born tech tycoon Elon Musk will have to wait for about two years before his Starlink satellite internet company can legally enter the South African market – a vital area for the service to operate optimally in the region. Starlink – already available in a number of Southern African Development Community (SADC) and other countries on the continent – is reportedly aiming to launch its services in SA ahead of the G20 conference hosted by South Africa and opening in November. But the company still intends to bypass the Broad-Based Black Economic Empowerment (B-BBEE) law and its 30% previously disadvantaged individual ownership laws that Musk has labelled as 'racist', preferring instead to go the Equity Equivalent Investment Programme route, which on its own is not enough to be granted a licence. 'The wheels of government don't mill that fast,' said Paul Colmer, an executive committee member of the Wireless Access Providers' Association (WAPA), a non-profit wireless industry association established in 2006. Speaking to the Pretoria News on Wednesday about their 2025 WAPALOZA conference held in Muldersdrift near Johannesburg from June 23-25, Colmer estimated that it would take about two years for the Electronic Communications Act to be amended. He based this on a presentation by a legal practitioner who made a presentation at the conference. He said as things stood, to 'sidetrack' the B-BBEE requirements there would need to be a change in legislation, which is a 'long process'. There were other ways Starlink could speed up its entry into South Africa, including through partnering with local entities that already have the required B-BBEE status, but Musk and Starlink reportedly "really, really do not like the idea of middle-men". The company and its representatives have also been accused of using Musk's proximity to US President Donald Trump and members of his administration to expand across Africa and in other countries. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Colmer said Starlink, which has been 'overhyped' when there were other similar service providers to choose from, was discussed at their conference but was not the main topic. The key points of discussion included spectrum sharing – a major source of opportunities for the smaller local wireless internet service provider (WISP) following Icasa's recent legislation amendment – and artificial intelligence (AI). However, Colmer said his personal highlight was the technical presentations or regulatory discussions – it was the inspirational human stories of innovation and perseverance, especially that of Songezo Mhambi from the underserved Eastern Cape who spoke on "How I Built a WISP". He said Mhambi started with network switches on his bed because the roof was leaking everywhere else, literally sleeping with his network equipment. He fought to get bank funding, overcame incredible hurdles, and now he's expanding and creating employment. Today, Songezo is, among other things, founder and CEO at Mdaswifi, founder at Vice-Tech, a renowned tech entrepreneur and a 'digital evangelist'. Colmer said he wished he could clone Mhambi because people like him are the solution to getting everyone in South Africa connected. A representative from the Independent Communications Authority of SA (Icasa) spoke about the connectivity ecosystem, emphasising how different forms of wireless technology can complement rather than simply compete with each other. Various connectivity solutions – from cellular to wi-fi to satellite – each have unique strengths and weaknesses that can together create a robust network ecosystem able to reliably and economically serve communities across South Africa's diverse landscape. Describing the conference as a success and welcoming the 'pragmatic optimism' displayed, Colmer reiterated his view that Starlink was 'overhyped' and dismissed concerns that Musk's constellation was going to kill the smaller wireless connectivity operators. In his conference summary he said: 'Yes, Starlink is coming, but OneWeb is already legally available in South Africa. Amazon's Project Kuiper is on the way. The Chinese are building their own constellation. 'But here's what I think got lost in all the hype: Starlink isn't the WISP killer some people fear it is. It has real limitations – downloading certain apps is problematic, WhatsApp calling isn't ideal. It's going to be complementary rather than primary. In countries that initially moved from WISPs to Starlink, many have actually moved back to WISPs.'
