Black empowerment is vital to inclusive economic growth

Dear Fellow South African,

This year marks the 70th anniversary of the Freedom Charter. We are reminded of its aspiration that the people shall share in the country’s wealth.

Our Constitution reflects the promise we made to one another and to future generations to redress the injustices of our past and realise the full potential of our country.

For this reason, we reaffirm that broad-based black economic empowerment is not just a policy choice but a constitutional imperative. 

In recent months, the world has entered what many now term a “poly-crisis” where global conflict, economic stagnation, mistrust in institutions and environmental degradation are challenging even the most resilient of nations.

These are conditions affecting many countries and South Africa is no exception. It is now imperative that we use the lessons that we have learned over the past three decades to make our empowerment policies more meaningful.

Now is not the time to abandon the measures that we have put in place to drive transformation. To the contrary, it is the time to move forward with greater purpose and raise our ambition.

Since 1994 we have built a robust legislative framework to advance the transformation of our economy, anchored in the Broad-Based Black Economic Empowerment Act and the Employment Equity Act.

The progress we have made is undeniable. We have seen real changes in ownership patterns, including more businesses owned by women. We have seen changes in management control, enterprise development and skills development. 

According to Statistics SA, between 2006 and 2023, black African households experienced real income growth of 46%, coloured households of 29% and Indian households of 19%. 

Despite this progress, the average income of white households is still nearly five times higher than that of black African households. This is the gulf we must close through deliberate and sustained efforts to expand opportunity.

Transformation is not a favour. It is a necessity. The inequality of our past continues to shape the lives of millions of black South Africans. And yet many who continue to benefit from the legacy of exclusion continue to decry black economic empowerment and are even challenging it in our courts.

We must dispense with the false notion that we must make a choice between growth and transformation. Economic growth without transformation entrenches exclusion, and transformation without growth is unsustainable.

We also need to challenge the notion that broad-based black economic empowerment is a cost to the economy. It is actually an investment in the economy.

Our task is to ensure that we pursue both growth and transformation in concert, with more vigour and with greater effect. 

That is why we continue to strengthen initiatives like the Black Industrialists Programme, which is building successful, competitive, black-owned enterprises in manufacturing and other sectors. 

That is why we are establishing the Transformation Fund to support a new wave of emerging, innovative businesses that can create work opportunities for our people. 

We must open the levers of funding for black-owned businesses. There is a critical need for black-owned businesses to access funding on affordable terms. While much of this funding should come from the development finance institutions, it is the private banks that have the resources to make the greatest impact. They need to review their lending practices to unleash the potential of black business.

Through mechanisms like the Public Procurement Act, we must ensure that businesses owned by women, young people and persons with disabilities enjoy expanding opportunities. We must ensure that transformation reaches into every sector, whether it is mining, construction, energy, IT or agriculture.

The private sector should use their supply chains far more deliberately to empower many more black-owned businesses, not just to improve their BBBEE scorecard, but to grow and diversify their supplier base.

As we develop our infrastructure, grow new industries like green hydrogen and electric vehicles, and drive localisation and reindustrialisation, we will continue to ensure that transformation is our guiding principle.

The transformation we seek is not about ticking boxes. It is about building a resilient, just economy for generations to come.

I call on all South Africans, and in particular the private sector, to recommit to economic transformation.

Let us move forward with greater urgency, unity and ambition, to build a South Africa where all can truly share in the country’s wealth. 

With best regards,