BEE and EE: Criminalise cronyism, focus on the poor

South Africa stands at a critical juncture requiring bold structural reforms to address persistent poverty and inequality.

While Black Economic Empowerment (BEE) has successfully deracialised ownership and created a new class of wealthy black South Africans, it has fallen short of meaningfully reducing poverty for the majority.

Corruption, rent-seeking, and fronting have undermined BEE’s potential, creating perverse incentives that benefit politically connected elites rather than genuine entrepreneurs.

Simultaneously, the country faces an unprecedented urban crisis. With the population growing from 39 million in 1993 to over 62 million today – expected to reach 82 million by 2063 – cities are under immense strain.

Nearly 70% of South Africans live in urban areas, yet the housing backlog continues to grow, despite the construction of 3.5 million subsidised homes.

The solution requires coordinated action: reforming BEE to focus on genuine empowerment of the poor while implementing planned city extensions that create large-scale employment through construction and manufacturing, potentially generating two million new jobs.

The above research forms part of a nine-month project undertaken by News24 and The Africa Centre to consult more than 70 influential South Africans across academia, business and civil society around tangible solutions that could be implemented to create five million jobs in the next decade.

The challenges facing the economy and job creation will be discussed at News24’s On the Record summit, taking place in Cape Town from March 19-20.

In this week’s edition of Friday Briefing, we focus on the impact of black economic empowerment and employment equity on the economy. You can read more of the research here.

We also examine where urban residents will live as they face a growing population crisis. Read more about the research here.

In other news developments, Geordin Hill-Lewis has officially launched his bid to lead the DA. In-depth writer Muhammad Hussain speaks with Hill-Lewis about his campaign. Read the Q&A here.

Looking further afield, author John Matisonn examines the US endgame after launching military action against Iran over the weekend alongside ally Israel. Read the analysis here.