Mohai defends B-BBEE against the ‘false narrative’

· Citizen

The “false narrative” that broad-based black economic empowerment (B-BBEE) has only benefitted a small group of politically connected individuals “is an incomplete and often desperate distortion of reality”, says Seiso Mohai, Deputy Minister in The Presidency for Planning, Monitoring and Evaluation.

Visit saltysenoritaaz.com for more information.

“Yes, there have been instances where benefits were concentrated and where transactional empowerment failed the broad-based objective. We must acknowledge that honestly,” he told a B-BBEE symposium at the University of Johannesburg on Tuesday.

But Mohai said it is equally true that many of the most prominent black South Africans who have risen in business, industry, finance, media, technology and professional services through empowerment opportunities have had no relationship whatsoever with the ANC as a governing party.

Mohai said many beneficiaries emerged through entrepreneurship, professional excellence, market competitiveness, strategic partnerships and access previously denied to black people under apartheid.

“Their success is not evidence of policy failure, it is evidence that barriers can be broken.

“The task is not to deny those gains … [but] to broaden them far beyond current levels,” he said.

Rejects calls to abandon B-BBEE

Mohai said two other misleading narratives that dominate public discourse and must be confronted are that South Africa must choose between growth and transformation, and that because the implementation of B-BBEE has flaws, the principle itself should be discarded.

He said transformation is not the enemy of growth but rather the unfinished foundation of sustainable growth, adding that no society can sustain growth where the majority are excluded from ownership, opportunity, skills development and wealth creation.

He said implementation failures can never be used as an excuse to undermine or abandon justice, and that fronting must be prosecuted, rent-seeking must be stopped, where compliance is superficial government must enforce substance, and where benefits are too narrow government must broaden participation.

Resistance to B-BBEE

Mohai said there is also a need to speak frankly about resistance to B-BBEE.

“There are forces – domestic and international – that seek to portray all transformation as unfair, all redress as discrimination, and all empowerment as inefficiency.

“Some of this opposition is ideological. Some of it is [driven by] economic self-interest. Some of it is rooted in nostalgia for inherited privilege.”

Mohai’s comments follow South African-born entrepreneur and businessman Elon Musk, the world’s wealthiest person, alleging in a post on X on Sunday that Starlink, his satellite internet company, was given the opportunity to bribe its way to a telecoms licence in South Africa by pretending a black person ran the company’s local business, but he had refused to do so on principle.

Musk, who owns Tesla, SpaceX, X (social media platform) and xAI, claimed the main reason Starlink could not launch in South Africa was because he is not black.

SpaceX has reportedly refused to apply for a licence to operate Starlink in South Africa because the Electronic Communications Act requires licence holders to be at least 30% owned by historically disadvantaged groups.

Equity Equivalent Investment Programme

Minister of Communications and Digital Technologies Solly Malatsi has stated it is “impossible” for him to offer an Equity Equivalent Investment Programme (EEIP) to a multinational company, as eligibility is determined by national legislation and regulations.

In terms of an EEIP, foreign firms can gain ownership points by investing in training, skills development, and the local industry, instead of selling shareholding in the company.

Although the B-BBEE Act and the ICT Sector Code acknowledges that empowerment can also happen through EEIPs, current regulations by the Independent Communications Authority of South Africa (Icasa) on the limitations of control and equity ownership by historically disadvantaged groups (HDG) and the application of the ICT Sector Code, only recognises ownership to be held by persons from HDGs as a valid measurement of B-BBEE for individual licences.

However, Malatsi issued a policy direction in May 2025, urging Icasa to consider revising its ownership regulations to address this policy misalignment.

Review of B-BBEE policies

The Centre for Development and Enterprise (CDE) last month called for a comprehensive, independent review of South Africa’s B-BBEE policies to assess their effectiveness and costs in response to government proposals to amend the B-BBEE codes.

CDE executive director Ann Bernstein said the review should evaluate which aspects of B-BBEE have succeeded and which have failed, and at what cost, using 20 years of available data.

Bernstein said the goal should be to build a new consensus promoting inclusive growth, accountability, and tangible benefits for black, and in particular, disadvantaged South Africans.

Different sectors have different histories

Mohai on Tuesday referred to the construction, agriculture, mining and finance sectors when stressing that different sectors have different histories, market structures and barriers to entry, and that a uniform transformation approach will not succeed.

He said the democratic state must use its assets, procurement power, infrastructure, land, licences, data, institutions and balance-sheet influence as strategic levers.

These included:

  • Public procurement to stimulate enterprise growth, localisation and inclusion;
  • State-owned enterprise (SOE) supplier chains to build black industrial capacity at scale;
  • Industrial parks to reduce entry barriers and support manufacturing clusters;
  • Ports and logistics nodes to open export pathways for emerging firms;
  • Broadband infrastructure to support digital inclusion and innovation; and
  • Public land for productive housing, agriculture and industrial use.

Mohai said monitoring must also move from compliance-based assessments to measurable outcomes.

He said government must track not only certificates and scorecards, but indicators such as ownership by value and control, supplier spend reaching black small and medium enterprises (SMEs), growth and survival rates of funded firms, access to export markets, and black representation in executive decision-making

An integrated model …

Mohai said government fully agrees that B-BBEE alone is not a panacea for the country’s problems, but that for it to achieve its objectives it must be integrated with industrial policy, infrastructure investment, skills development and decisive support for small enterprises.

“The future of broad-based black economic empowerment will not be determined by its critics alone.

“It will be determined by the courage, discipline and resolve of those prepared to make it work for the many, and not the few,” he concluded.

This article was republished from Moneyweb. Read the original here.

Read full story at source