South African businesses must stop criticising Black Economic Empowerment (BEE) in private, while supporting it in public.
These businesses and their leaders should not fear retaliation from the government in standing up for their interests and what they deem to be right.
This is feedback from US Ambassador to South Africa Leo Brent Bozell III, who explained what the American government wants from the country to improve relations.
“I have been here three weeks, and I realise the complexity of the situation. There are those in government who want to see the business community succeed, while there are those who don’t want to see it succeed,” Bozell told the third BizNews Conference.
Bozell believes that South Africa can unlock an extraordinary level of economic dynamism if it pursues the right policies and repairs relations with the world’s largest economy.
“By working constructively with policymakers to craft solutions that expand opportunity and encourage entrepreneurship, the business community can help build an economy,” Bozell said.
“South Africa has the talent, the infrastructure, the financial sophistication, and the entrepreneurial energy to be an even greater engine of growth for this continent.”
However, there are some hurdles in this regard, with one of the most significant barriers to investment in South Africa being BEE.
Bozell explained that the country has to end the effective surrender of ownership or control of corporate decision-making of one’s business to operate in South Africa.
While BEE was designed to expand opportunity and correct historic injustice, which are important goals, they are structured in such a way that they prevent economic growth.
“When those policies are structured in ways that introduce challenges to ownership or create complex compliance requirements or are clouded in charges of corruption, investors begin to reassess risk,” Bozell said.
In this regard, Bozell urged South African businesses to be more publicly vocal in their criticism of BEE and the negative consequences of the policy framework. Bozell said businesses are critical of the framework, but only in private.
“I don’t want businesses to say one thing publicly and another thing privately. I want businesses that tell me, privately, that B-BBEE is bad to say so publicly,” Bozell said to applause from the audience.
“I don’t want them to feel fear from the government. There has to be that kind of outspokenness now.”
BEE under siege
The government’s policy of transformation and BEE has come under increasing pressure over the past few years, and not only from the United States.
Some South African business leaders, such as Investec CEO Fani Titi, have been outspoken regarding the failures of the BEE framework.
“We don’t think opportunity should be linked to party membership, which is what the application of BEE has led to,” Titi said in October 2025.
“At a personal level, I think there’s been a misapplication of the policy of BEE.”
“I can understand the frustration that there is. You’ve had employment-equity legislation for 30 years, yet it hasn’t achieved the desired effect.”
This criticism has been coupled with a growing narrative that BEE is synonymous with cronyism and corruption, with it only benefiting a handful of well-connected individuals.
The increased criticism has not gone unnoticed by the ANC, with some of its leading figures saying the policy is up for honest debate.
Minister of Trade, Industry, and Competition Parks Tau, who is a high-ranking ANC member, is overseeing a two-phased review of the policy framework.
“The review will be implemented in two phases. The first phase will be a short-term review focusing on refinement and an analysis of subordinate legislation, which should be completed by the end of this financial year,” Tau told Parliament earlier this year.
“Parallel to that, we have been in the process of consultation to finalise the Transformation Fund, and the implementation of the fund is part of the review process.”
“The second phase is a long-term review which involves an analysis of the B-BBEE Act for substantive amendments.”
Research from the Free Market Foundation and Solidarity shows that compliance with BEE costs the South African economy R290 billion a year in lost economic activity.
While every policy comes with a cost, BEE is increasingly being seen as an unnecessary burden that has little benefit for the economy and citizens.
Their research indicated that the policy framework has had severe negative consequences for the economy –
- More than R5 trillion in cumulative economic losses since 2004
- A 1.5% to 3% annual reduction in GDP growth
- Approximately 192,000 jobs are foregone each year
- Up to R290 billion in compliance costs annually
“In a country with one of the highest unemployment rates in the world, these are not technical side effects. They are structural barriers to growth, investment and job creation,” the foundation said.
“Empowerment should mean widening opportunity, lowering barriers to entry, and enabling enterprise. Instead, BEE has entrenched insider enrichment while ordinary South Africans remain excluded from meaningful economic participation.”
