South Africa’s policy of black economic empowerment (BEE) is flawed and in need of review, the country’s finance minister said in an interview published on Tuesday.
Speaking to the Financial Times, Trevor Manuel said that the legislation, clarified two years ago, had been abused.
Since 1994, South Africa has been promoting BEE as a central plank of its growth strategy and says deals worth R285-billion (â,¬30-billion, $40-billion) have been concluded in the last decade.
In the past two years, Manuel told the business daily, ”there were all kinds of things that businesses have done, good and bad, cynical and genuine”.
”There will have to be a review.”
As evidence of many companies following only the letter, and not the spirit of the programme by recruiting black managers and board members only as token gestures, Manuel cited the example of a friend of his.
”They [his white partners] say, ‘We want you there. You are a good man. But actually we do not need you close to what we do. We will run the business, but we have bought an insurance policy through you’,” Manuel told the FT.
According to the FT, the BEE programme has also come in for criticism because of accusations that its main beneficiaries are those with strong links to the governing African National Congress.
The paper also quoted Martin Kingston, the deputy chairperson of Rothschild in South Africa, as saying it was ”appropriate” to take stock of BEE deals.
”It’s generally accepted that [BEE] is desirable but the issue is whether the formula is right,” he told the FT. – Sapa-AFP