Prof. Joseph Sekhampu
The debate over BEE has entered a familiar but increasingly brittle phase. One side argues that, more than thirty years into democracy, empowerment has overstayed its welcome and should be scrapped. The other insists that inequality remains so deeply racialised that any talk of exit amounts to denial or betrayal. What is striking is how little of this debate engages the real policy problem South Africa now faces. We are arguing about permanence and abolition when the unresolved question is sequencing. If empowerment was transitional, how was the transition supposed to work and what comes after it.
South Africa adopted the BEE under conditions of political urgency and economic compromise. It functioned as part of a broader elite settlement that allowed political power to change hands without a wholesale restructuring of the economy. In terms of political economy, this was a classic bargain. Stability was prioritised over disruption, and redistribution was mediated through negotiated inclusion rather than structural overhaul. That choice was understandable at the time. What is less defensible is that the bargain was never revisited as conditions changed.
The result is a policy that has lost its temporal logic. BEE was meant to accelerate inclusion while institutions, markets, and skill pipelines adjusted. Instead, it became a standing system of allocation. Ownership points, procurement thresholds, and compliance scores became the grammar of empowerment, even as their connection to productive capability weakened. What began as a bridge became a tollgate.
Transitional policies require exit credibility. Everyone must believe that the rules will change once certain conditions are met. Where exit is undefined, the incentives shift. Beneficiaries invest in maintaining access rather than building independence. Administrators prioritise compliance over outcomes. Political actors defend the policy as a symbol rather than interrogating its performance. Over time, redistribution becomes less mediated by production than by proximity to discretion.
This is not unique to South Africa, but our context offers a particularly stark case because state capacity has eroded rather than strengthened over time. In weak institutional environments, discretion is expensive. It invites brokerage, blurs accountability, and converts moral policy into transactional practice. The absence of a designed exit did not preserve justice. It postponed hard choices while establishing new forms of exclusion.
Calls to scrap BEE respond to this reality, but often in a way that creates a different kind of evasion. Ending a redistributive instrument without specifying its replacement is not neutrality. It is a policy decision to preserve existing distributions of ownership and opportunity. Growth, on its own, does not undo concentration. The world of economics has shown repeatedly that markets reproduce advantage unless deliberately structured otherwise. An exit without an alternative is not reform, but restoration by default.
The way forward lies neither in indefinite extension nor abrupt abolition, but in deliberate redesign. South Africa requires a sequenced exit framework that treats empowerment as a moving instrument rather than a fixed moral position. Such a framework would begin by freezing the escalation of compliance and reweighting empowerment toward measurable capability outcomes. Skills pipelines that lead to completion, supplier development that tracks survival beyond a determined period, and productivity improvements that can be audited independently should matter more than ownership proxies alone.
The second consideration is institutional rather than moral. Discretion must be reduced over time and replaced with rule-based inclusion. The automatic qualification linked to firm age, employment creation, export participation, or geographic location narrows the space for brokerage. It does not require a perfect state but a simpler one. Where capacity is weak, rules outperform judgment.
The final adjustment is the most difficult, but also the most necessary. Ownership transfer must cease to be the primary instrument of empowerment. This does not mean abandoning redistribution. Competition policy, asset building for households, early career capital access, and aggressive investment in human capability do more to reshape long-term inclusion than repeated firm-level deals. Empowerment must shift from negotiated entry into firms to structured participation in the economy.
None of these denies the moral claim that underpins redress. Designing the exit from BEE is not about closing the chapter on inequality. It is about moving from a politics of access to a politics of capability. South Africa delayed this conversation for too long because it was uncomfortable and politically risky. That delay has now produced a false choice between scrapping and defending a policy that no longer fits its moment.
The real test of maturity is not whether a society clings to its instruments, but whether it can redesign them without losing sight of their purpose.
Prof. Joseph Sekhampu is the Director of the North-West University Business School.
