Over the past month, something has started to shift in South Africa. More and more people are questioning whether race-based policies like Black Economic Empowerment (BEE) and Employment Equity are doing what they were meant to do.
There’s growing discomfort not just with how these policies are implemented, but with whether they’re still helping the people they were designed to uplift.
At the same time, the government is holding firm. President Cyril Ramaphosa says race-based empowerment must continue until all South Africans are equal, and until black South Africans control the means of production. He’s even said he’s “baffled” by the idea that BEE might be holding back the economy.
The GNU nominally, at least, made a commitment to evidence-based policy-making: ̶ something this country has been sorely lacking, evidenced by the high rates of crime, poverty and unemployment: the “evil triplets”, the head of Solidarity Dr Dirk Hermann called them in a recent briefing on a report on the cost of BEE.
The evidence is not on the government’s side. It’s not on our side either, but it is the lived experience of the millions experiencing joblessness, poverty and inequality.
Numbers
What I find most interesting – it is something that stopped me scrolling – is that black unemployment is higher than the national average and has been higher in these population groups for at least the last ten years, according to StatsSA’s latest employment statistics.
The economy also has not grown in real terms per person since 2007.
Any government that was committed to “evidence-based” policy, as the GNU says it is, would have dumped race-based policies in a heartbeat upon seeing evidence that they don’t show any improvement for targeted groups.
I doubt whether the government even has a metric to measure the success of BEE.
Enrichment, not empowerment
The Zondo Commission reports are replete with cases where the politically-connected politicians use the word “empowerment” when justifying increased expenditure. A 30% “set-aside rule” was abused by the South African Airways board under President Jacob Zuma’s “aggressive transformation” strategy, for example. More examples of procurement policy being abused include Eskom paying R26 for a single one-ply toilet paper roll (which normally costs about R4) and R21 for a litre of milk (retailing around R17). Even more shocking was the “knee guards” fiasco; one supplier admitted to charging Eskom R934,000 for a batch of kneepads worth only about R4,000.
Where did that money go? Not to delivering services, that’s for sure.
I will remind you of Part 1, Volume 1 of the Zondo Commission Report, that stated: “the primary national interest is best served when the government derives maximum value-for-money”. Empowerment policy allowed (and continues to allow) a gap for unscrupulous individuals to game the system for their benefit.
Fake vs. real transformation
IRR research has found that BEE benefited a small percentage of South Africans, and that South Africans are far more in favour of tax-funded vouchers for schooling, healthcare and education than current BEE and employment equity policies. 76.3% choose vouchers, with only 17.4% preferring to stick with the status quo and 5.4% undecided.
IRR Fellow Gabriel Crouse approached the topic excellently by saying that “real transformation happens when opportunities expand to include more South Africans through education, on-the-job upskilling, real improvement of income, wealth and living standards”.
A route to real empowerment
The Institute of Race Relations has a non-racial, means-test alternative empowerment policy; Economic Empowerment for the Disadvantaged (EED).
EED breaks the race-based empowerment mould by grounding empowerment in the non-racial founding provisions of the Constitution.
EED will recognise the contributions of businesses through jobs created, revenue generated, investment created and growth. This is unlike the current legislative requirements of sector codes and targets that corporates need to meet.
And most importantly, the tax-funded voucher element puts money directly in the hands of South Africans to spend on healthcare, education and housing, giving them the opportunity to bypass the often-sclerotic public sector that is infamous for over-promising and under-delivering.
South Africans deserve the freedom to choose who provides their services. It is also imperative that the public sector be open to a competitive market to prove to South Africans that they can get the best value for their tax rands.
I’ve written before about socio-economic rights and how the government has set itself up for failure through “free” public services.
Tax-funded vouchers through non-racial empowerment policy allows the government to kill two birds (empowerment and service delivery) with one stone (EED).
A healthier, skilled and housed and employed population is one that can create a cycle of prosperity for future generations.
Free + Prosperous = #WhatSACanBe.
[Image: Bennie Bates on Unsplash]
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