Over the past few months many publications have printed reviews of SA's first 10 years of democracy. Most, but not all, of the commentary has been complimentary. The negative responses are to be expected because this is an election year.
However, political emancipation without economic liberation is bound to be short-lived. This is the reason SA's owners of capital, government and society at large have embarked on a programme to incorporate previously disadvantaged South Africans into the mainstream economy.
Black economic empowerment (BEE) was a product of the desire to normalise the S A economy and remove the economic imbalances that were drawn along racial lines.
There is no shortage of criticism of BEE, mainly because of the failure of past BEE experiments. In most cases the criticism is justified because the process resulted in the enrichment of only a few individuals.
Broad-based ownership means ownership of an entity is shared by a larger group of individuals, but broad-based BEE is an integrated and coherent socioeconomic process that contributes to the economic transformation of SA.
The focus on broad-based empowerment came after the collapse of the first wave of economic empowerment. Its proponents have high hopes, and they have good reasons to be optimistic. Broad-based empowerment has a better chance of ushering in a new dispensation that ensures more black people manage, own and control the country's economy, as well as addressing income inequalities.
Broad-based BEE focuses on three levels of beneficiary.
The first type of beneficiary includes direct beneficiaries in the form of entrepreneurs and the shareholders of companies; the directors of companies; and the senior executives who implement the decisions taken by the board. Direct beneficiaries take a certain level of risk and expect to be rewarded according to that risk.
The second type of beneficiary is made up of the employees who benefit through salaries and the transfer of skills. Employees benefit from the human resources development requirements of the BEE process, which aims to achieve a fairer representation of blacks within companies at all levels, resulting in a fairer distribution of income across the different population groups.
The third type of beneficiary is made up of the external stakeholders. These include the BEE suppliers and disadvantaged communities. The benefits to the third type of beneficiaries will be channelled through initiatives such as affirmative procurement and enterprise and social development.
Broad-based BEE is able to target all three levels because of its holistic approach to empowerment.
For broad-based BEE to succeed, black people must be actively involved in BEE initiatives. BEE should not be an end in itself, but rather a means to an end. The goal is to see every South African become a part of one prosperous economy.
Vuyo Jack is the CEO of Empowerdex
