TIISETSO MOTSOENENG: Use BEE to build markets instead of fighting over quotas

The transformation debate has descended into ritual combat. One camp counts quotas and share certificates, the other preaches market purity as if apartheid were a regrettable footnote. 

Both miss the point. The goal should be getting black South Africans steady salaries, real contracts and routes into skilled work. 

To be sure, broad-based BEE opened doors, but politics turned it into optics. Share transfers made headlines, but real economic inclusion barely moved the needle. This model, inspired by Malaysia’s Bumiputera experiment and, ironically, the Afrikaner Broederbond’s own playbook, was never about grassroots economic dynamism.

The hard data is damning. Unemployment is at 32%, and youth unemployment is catastrophic in townships. GDP growth remains stuck below 2% and SA’s economy, once comparable to other mid-income peers, is now lagging far behind. More than 70% of privately owned agricultural land is still white owned, and most of the country’s richest people are white men.

Why? The model didn’t require new jobs and new firms. Instead, it paid for perfectly BEE-compliant fronting and a “rent a darkie” shell game, while rewarding the same elite with repeat seats on boards without building local supply chains and entrepreneurial ecosystems.  

With the new Employment Equity Amendment Act, which came into effect this year, the quota logic has never been more rigid. By September, every business with 50 employees faces legal “targets” on racial, gender and disability composition, down to the last percentage point.

Sectoral targets are set out in spreadsheet gospel. Some businesses have four years to bring their workforce in line with national demographics. Step out of line? Prepare for government censure.

Legal challenges are already flying. Business groups point out that these rules are irrational and procedurally flawed. If the Business Unity SA lawsuit against employment equity targets proves anything, it is that quotas are brittle, litigable, manipulable and easy to turn into theatre.

SA needs something that survives lawyers and politics, an incentive regime that pays for results measurable in tax returns and payroll.

Imagine a BEE system that finally asks whether you have changed lives in your community. A next-generation alternative should be built on hard, measurable outcomes, not static quotas. Think bronze, silver and gold bands based on four pillars — net new permanent jobs in disadvantaged areas, durable placements from funded skills pipelines, procurement that demonstrably grows township small businesses, and community assets that produce real income. Hit a threshold, and you unlock time-limited fiscal perks from tax credits to procurement priorities.

That is deliberately unsexy.  It replaces symbolic social justice with hard accounting. That’s the political genius. Businesses get a market-friendly carrot — incentives for expanding demand and supply in underserved places. Sceptics get visible, local wins that can point to paid jobs, supplier revenues and communication dividends. 

Policymakers get a tool that channels corporate power toward productive inclusion. Make it brutal on verification. Scores live or die on the traceability of payroll and VAT links, supplier invoices and audited trust accounts. Clawbacks slam shut on two-week placements.  

Predictable objections are ready in the wings. Critics will say it’s expensive, administratively heavy and open to gaming. Fair enough. Administration is heavier than ticking ownership boxes; small suppliers will need hand-holding, and any incentives invite gamesmanship. 

But those problems are not insurmountable. Subsidise compliance hubs, simplified reporting templates and a public dashboard that names progress and shames fakery. Transparency is the best antiseptic for elite capture. 

SA’s problem has not been a lack of moral grammar. It’s been the absence of a tool that ties corporate advantages to local economic growth. When a firm profits from new township customers and hires skilled locals or buys from township suppliers, the tax base expands. That creates a virtuous loop.  More demand, more firms, more jobs and less shouting about who owns what on paper.  

If you want to frighten the quota zealots and comfort the market conservatives at once, offer them this. Stop buying optics, start buying outcomes. Reward firms for building markets where none existed, and you move beyond distributing a fixed pie to growing the whole thing. 

• Motsoeneng is Business Day acting editor.