August 12, 2012

When writing my proposal for this scholarship, I read a lot of work by Moeletsi Mbeki, brother to former President Thabo Mbeki. This was my first glimpse at the face of cynicism towards Broad Based Black Economic Empowerment, and I was determined to find its proponents as well. It seems however that even more than before B-BBEE has become synonymous with lethargy, entitlement and corruption.

Moeletski Mbeki

The topic came up in my growth and development class, and the most intriguing part of the discussion was the clear divide between the white and black students. The white students mimicked the thoughts of Mbeki, citing the increasing cases of corruption, how the system has been used to elevate a select minority of black elites, and the hurdles the system has added to enterprising companies. Most of the black students while agreeing with B-BBEE’s pitfalls, also spoke with a sense of hope. B-BBEE has been going through a lot of changes this past year in the hopes of avoiding what Mbeki calls “stagnancy “ and “decline”.  The most recent amendment was finalized this month and in essence has made the BBBEE scorecard much stricter and therefore difficult to achieve. The goal of this amendment is to combat the constant corruption concerning the BBBEE scorecard. According to Sipho Ncgobo, financial manager at Anglo American, “generally fronting is when companies pretend to be compliant with the BEE Act by placing black people in positions that would make them seem they either own the company or were at a level to make decisions in that company”. By doing so, they receive benefits reserved for those in proper compliance with BBBEE.

Sipho Ncgobo

While this seems to be a step in the right direction, this amendment also adds many complications for businesses attempting to adhere to the BBBEE scorecard. Honest, small businesses working to receive BBBEE benefits must now stretch themselves even farther or face a loss in revenue. This doesn’t help the reality that small businesses are most responsible for curing youth unemployment, yet have been hurting the most. As stated before, there is also the negative stigma associated with current BBBEE practices. Mbeki has called it legalized corruption and while speaking to Ngcobo, he called this amendment a “last ditch” attempt to salvage the program. It seems however that these efforts have instead reinforced the idea that any respectable black entrepreneur should avoid BBBEE benefits to save his dignity and reinforce himself as a hard working businessman.

What I’ve seen is that these amendments and attempts to fix the BBBEE system have not only discredited the government but done little to nothing for the unemployment problem of South Africa. It’s portrayed as a corrupt system that benefits a few wealthy black businessmen and furthermore exasperates the stigma of the lazy, entitled black businessman.