LETTER: Less BEE (which has failed), and more EED

It is difficult not to agree with two Nedbank corporate finance analysts when they argue that broad-based BEE has “had limited success ... in terms of monetising value and transforming ownership to make historically disenfranchised people active participants in the economy” .

suggests they have not properly absorbed the lessons of their otherwise good analysis. Their argument is one observers of SA business encounter on an increasing scale and with increasing intensity as the failure of the BEE paradigm becomes apparent. Yet, as Nduli and Rowan show, BEE is a failure even in terms of its core goal — putting capital in the hands of black South Africans. They show that of the R317bn in value generated through BEE transactions by the 100 largest listed JSE companies, only R109bn is “unencumbered”. To put this number into some sort of perspective, in 2019 the total market cap of the JSE was R15.88-trillion.

The simple truth is that the SA social order will be more thoroughly transformed if the hurdles to growth are removed and developments allowed to play out “naturally”. The skills demand of a growing economy will alone account for more transformation than any number of years of forced redistribution through the existing BEE paradigm.

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