Bee module 1
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The document outlines the historical context and necessity of Black Economic Empowerment (BEE) in South Africa, highlighting the severe economic disparities rooted in apartheid that resulted in black individuals owning only 10% of the economy by 1994. It details various legislative measures implemented since 1994 to address these inequalities and facilitate the economic participation of historically disadvantaged individuals. The conclusion emphasizes the ongoing need for an inclusive approach to empowerment to ensure sustainable progress for all citizens.
Bee module 1
- 1. 1.1 THE LEGACY OF APARTHEID The structured exclusion of black people from economic power began in the late 1800s with the first dispossession of land and continued throughout the 20th century The impact of this systematic disempowerment not only resulted in a landless black majority with restricted access to skills development The system deliberately prohibited black people from generating self- employment and entrepreneurship In 1994, the democratic government inherited an economy in deep structural crisis, trapped in a low-growth equilibrium, economic exclusion and underdevelopment. The Broad-Black Economic Empowerment became a necessary government intervention to address the systematic exclusion of the majority of South Africans from full participation in the economy Racially segregated areas enforced through the Group Areas Act not only uprooted millions from their places of residence, but also led to large capital losses and virtually destroyed the fabric of black small enterprises The drastic restriction of property ownership rights of black persons made it impossible for them to acquire assets that could serve as collateral for loan financing; it also excluded black persons from the long-run process of capital accrual and growth 1 Page
- 2. 1.2 WHY BLACK ECONOMIC EMPOWERMENT IS NECESSARY As a result of our past South Africa is one of the most unequal economic places in the world i.e. White people as a population group, own over 90% of all industrial undertakings. Blacks including coloureds and Indians make up 90% of the population, but own only 10% of the economy. A clear mandate was implemented to rectify the inequalities of the past by: Implementing policies in every sphere: political, social and economic life. Accelerating progress, our democracy implemented changes since 1994, but not enough for the establishment of a prosperous society Having all South Africans participate meaningfully in the Economy Aligning ourselves with Government’s objective to achieve this vision of an adaptive economy characterised by growth, employment and equity by 2014 Acknowledging the vast racial and gender inequalities in the distribution of and access to wealth, income, skills and employment and recognizing that this represents a threat to our young democracy More than just an economic imperative, the deracialisation and engendering of our economy is a moral requirement in keeping with the values and principles of equity enshrined in our Constitution. 2 Page
- 3. 1.3 BUILDING THE FOUNDATION FOR BROAD BASED BLACK ECONOMIC EMPOWERMENT Since 1994 government embarked upon a broad programme to supply a legislative framework for the conversion of our economy. Prevention of Unfair Discrimination Act Goverment introduced specific active measures Competition Act to overcome distortions in the labour market Minerals and Petroleum Development Act Extension of Security of Tenure Act New laws have restored rights to land and Restitution of Land residence Rights Act National Empowerment Fund Act Goverment provided new economic opportunities Employment Equity Act to historically disadvantaged persons Preferential Procurement Policy Framework Act 3 Page
- 4. 1.4 LEGISLATIVE MEASURES 1994 Government has tackled inequality in specific areas, as well as enact on specific legislation to address economic inequalities 1995 A National strategy for the development and promotion of small business in South Africa was tabled in Parliament. The creation of new black-owned and–controlled enterprises was seen as a key component of this strategy 1996 The National Small Business Act was introduced to provide an enabling environment for SMMEs and to establish several institutions to provide financial and other support to entrepreneurs 1997 Government issued a green paper on public sector procurement reform. This recognised that government, as the largest buyer of goods and services in the economy, had the responsibility to leverage this purchasing power in support of its economic policy objectives of BEE, small enterprise development, and labour intensive construction. Mechanisms were introduced to give effect to a preferential procurement policy: The tendering process was made more accessible to black people Tenders were ‘unbundled’ into smaller tenders to allow smaller enterprises to tender for work A point system was introduced to award tenders on the basis of the combination of price and preference for targeted groups 1998 Legislation were enacted that address specific elements of the black economic empowerment challenge. One of the core objectives of the Competition Act was to enable and increase the numbers of historically disadvantaged persons with an ownership stake in the economy. Indeed, the preamble to this Act recognizes that competition law had to specifically address the excessive concentration of ownership and control of the economy in South Africa’s Economic Transformation. 4 Page
- 5. 1.5 CASE STUDY Turn to Appendix A – Discuss in Groups your findings on the Case Study Provided. Detail the Acts that have been implemented and describe in your own words what impact the Act has made to the Economy. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 5 Page
- 6. 1.6 Q A 6 Page
- 7. 1.7 CONCLUSION The policies and programmes introduced since the dawn of our democracy is only the starting point in rebuilding South Africa as a country belonging to all its citizens. While much progress has been achieved in the policy architecture, the rebuilding of a sustainable future lies in an inclusive empowerment of historically disenfranchised individuals. Black Economic Empowerment is perceived by many as unnecessary government red-tape, which stifles free enterprise. It has come to mean both everything and nothing at the same time. On the contrary this drawing together of Governments transformation programmes necessitates a rational, focused strategy. Engagement with this programme will create meaningful opportunities for a sustainable future for all South Africans. 7 Page