/ 11 June 2024

What various coalition scenarios could mean for broad-based BEE

With its roots in the country's post-apartheid era, broad-based BEE has been a flashpoint of debate, hailed by some as a vital tool for economic transformation and denounced by others as a flawed instrument of racial preference.

The ANC’s loss of parliamentary dominance has shattered the political status quo, triggering an unprecedented era of coalition politics in South Africa’s national government. As parties engage in a delicate ballet of negotiation and compromise, the fate of contentious policies such as broad-based black economic empowerment (BEE) hangs in the balance. 

With its roots in the country’s post-apartheid era, broad-based BEE has been a flashpoint of debate, hailed by some as a vital tool for economic transformation and denounced by others as a flawed instrument of racial preference. 

Its detractors argue that this is because the policy is a brazen attempt to enrich a select few at the expense of the many. They argue that by doling out lucrative deals and contracts to well-connected individuals, the ANC has created a new class of fat cats who are more at home in luxury suites than in the townships. It’s a far cry from the party’s liberation ideals and more like a recipe for crony capitalism on steroids. 

As the political landscape evolves, the future of broad-based BEE policy will be shaped by the intricate dance of coalition politics. We thus need to scrutinise the combinations and unravel the implications for South Africa’s economic future. 

Scenario 1: ANC and DA Coalition 

An alliance between the ANC and Democratic Alliance (DA) would thrust the contentious issue of broad-based BEE into the spotlight. The ANC, a long-time champion of it, has woven it into the fabric of state procurement policies to drive economic transformation. 

In stark contrast, the DA has vocally criticised broad-based BEE as ineffective and advocates for its replacement with its economic justice policy, which prioritises meritocracy, efficiency and equal opportunity in government procurement. 

This ideological rift would probably spawn intense negotiations, with the ANC seeking to preserve its signature policy and the DA pushing for a more market-driven approach. The fate of broad-based BEE would hang in the balance, as the coalition navigates the complex interplay between economic growth, transformation and social justice. 

Scenario 2: ANC and MK Party Coalition 

An ANC-uMkhonto weSizwe (MK) Party alliance would probably preserve the foundational principles of broad-based BEE but with a revamped strategy. 

While a clear policy perspective has yet to be presented, the MK Party criticised broad-based BEE implementation in its founding manifesto, contending that it had perpetuated white dominance and stifled the growth of small, medium and micro enterprises owned by historically disadvantaged groups, women and the youth. 

Despite a shared commitment to black empowerment, the parties would need to reconcile their differing views through nuanced negotiations. This convergence would demand a delicate balancing act, necessitating careful calibration of their respective perspectives to forge a harmonised approach that addresses historical inequalities while fostering inclusive economic growth. 

Scenario 3: ANC, EFF and IFP Coalition 

A potential coalition comprising the ANC, Economic Freedom Fighters (EFF) and the Inkatha Freedom Party (IFP) is likely to champion the principles of broad-based BEE. 

The EFF has similar objectives to the ANC, however, with a much deeper prioritisation of equitable economic participation and the empowerment of historically 

disadvantaged South Africans. 

The IFP, on the other hand, shares similar views on economic transformation but, in recent years, has expressed reservations about the implementation of broad-based BEE, citing concerns about it becoming a means for elitist enrichment. 

This coalition would probably strive to create a more inclusive and equitable economic scenario, harnessing the collective strength of their diverse perspectives to drive meaningful change. 

Scenario 4: Multiparty coalition 

With most parties in parliament already sympathetic to economic transformation, a multiparty coalition is likely to prioritise refining broad-based BEE policies to ensure greater equity and inclusivity while rooting out corruption. 

A multiparty coalition would navigate a complex policy for broad-based BEE, marked by cautious and deliberate reforms. Building on their shared commitment to addressing historical inequalities, the coalition would focus on strengthening its implementation, preventing elitist capture and expanding opportunities for marginalised groups.

Through a collaborative and consensus-driven approach, coalition partners would strive to create a more equitable and sustainable economic landscape, harnessing their collective expertise and resources to drive meaningful change. 

As the political landscape continues to shift, the fate of broad-based BEE hangs in the balance. The formation of coalitions in the coming weeks will be a crucial determinant of the policy’s future trajectory. 

One thing is certain — the ensuing policy trade-offs will have far-reaching implications for South Africa’s economic transformation journey. As the country navigates this uncharted territory, all eyes will be on the coalition negotiations, eager to see what compromises will be made and what the future holds for broad-based BEE. 

Siseko Maposa is the director of Surgetower Associates, a management consultancy specialising in government, corporate and foreign affairs. The views expressed are his own.