South Africa's Black Economic Empowerment (BEE) is Fat, Outdated, Divisive, and Harmful to Growth

Black Economic Empowerment is Ramaphosa’s billion-rand scam—enriching elites, deepening poverty, fueling corruption, and strangling growth—proof that South Africa’s so-called transformation is nothing but betrayal wrapped in constitutional clothing.

I look at South Africa today and cannot decide if I am watching a tragedy or a comedy. On one hand, the nation was promised freedom, justice, and a new dawn. On the other, it got Cyril Ramaphosa in a tailored suit, defending a policy that made him a billionaire while millions go hungry. Black Economic Empowerment (BEE), the crown jewel of South Africa’s “transformation,” was supposed to be the cure for apartheid’s wounds. Instead, it has become a sick joke—one where the punchline is always poverty, and the audience is too tired to laugh.

Let us not forget the beginning. When Nelson Mandela stepped out of prison in 1990 and spoke of deracializing economic power, businesses trembled. They feared nationalization, expropriation, and revolution. So they handed out shares to a few black leaders to keep the wolves at bay. Ramaphosa, the lawyer-turned-unionist, was one of the first beneficiaries. He walked away from those empowerment deals not with scraps but with fortunes. Decades later, as president, he now tells us with a straight face that BEE is not a choice but a “constitutional imperative.” I cannot help but marvel at the irony: the man who climbed the empowerment ladder now insists that the ladder be kept firmly in place, even as it dangles over a pit where millions have fallen. When the shepherd fattens on the flock, the pasture grows bare.

BEE has transferred over one trillion rand—more than $50 billion—to fewer than one hundred people. Ramaphosa is among them, living proof that the policy is less about empowerment and more about elite enrichment. The government sold the people a story of justice, but what they got was a pyramid scheme with politicians at the top. This is not redistribution; it is re-feudalization. A new class of black oligarchs—the Randlords of the new South Africa—now dine in boardrooms while ordinary citizens wait outside with empty bowls.

Ramaphosa insists that there is no trade-off between racial transformation and economic growth. But tell that to the unemployed masses. Tell it to the youth who leave university with degrees only to sell fruit at intersections. Tell it to the investors who have packed up their bags and left. Businesses spend up to 290 billion rand each year just to meet BEE’s racial requirements. That is 2 to 4 percent of GDP burned in the fire of paperwork, overpriced suppliers, and political cronyism. Growth has stalled, jobs have disappeared, and yet the president assures South African people that everything is working exactly as it should. Only a man feasting on steak could tell a starving crowd that the soup is filling.

The cruelest irony is that inequality among black South Africans has exploded under BEE. The top ten percent of black earners have seen their incomes triple. The bottom half—the real masses of the people—have seen their incomes fall. Poverty has deepened while Ramaphosa’s fortune has ballooned. The dream of empowerment was meant to lift all boats; instead, it turned into a yacht party for the chosen few while the rest drown.

Worse still, the policy kills genuine black entrepreneurship. Why struggle to start a company from scratch when you can wait for a slice of someone else’s? Why risk innovation when government contracts are awarded on the basis of connections, not competence? BEE has not created builders; it has created beggars in business suits. Ramaphosa may preach about transformation, but the transformation has been from aspiration to dependency. South Africa’s firm entry and exit rates are a third of what they are in other middle-income states. The message is clear: in South Africa’s economy, you do not build, you beg.

And corruption? BEE has turned it into an art form. When contracts are handed out on the basis of race instead of merit, cronyism thrives. State procurement is no longer about cost efficiency but about who has the right surname, the right handshake, or the right political ties. Hospitals run out of medicine, but politically connected suppliers drive Bentleys. Schools crumble, but middlemen in designer suits pocket millions. This is the South Africa Ramaphosa presides over: a land where empowerment means empowering your friends and disempowering the nation. When the well is guarded by thieves, the village drinks dust.

Supporters insist that BEE cannot be scrapped because it is part of the constitution, part of the moral fabric of the new South Africa. But morality has nothing to do with it. If the goal were truly to uplift the poor, the focus would be poverty itself, not race. Because most of the poor are black, policies aimed at poverty reduction would naturally benefit them without creating an oligarch class. Yet Ramaphosa clings to BEE because it gave him his billions, his power, and his presidential palace. He is not defending transformation; he is defending his own reflection.

South Africans themselves are not fooled anymore. Polls show that many believe BEE is outdated, divisive, and harmful to growth. Even black South Africans are saying enough is enough. Ramaphosa, however, continues to smile, to reassure, to preach that empowerment is working. It is working, yes—for him and his circle. For the millions stuck in unemployment lines, empowerment is just another word for betrayal.

The tragedy of South Africa is that its greatest promise has become its greatest parody. Ramaphosa’s own life is the perfect metaphor: from the struggle against apartheid to the luxury of billion-rand mansions, all in the name of empowerment. He insists there is no trade-off between transformation and growth, but the facts stare him in the face. Growth is dead, inequality is rising, unemployment is catastrophic, and corruption is the national anthem. What the black people in South Africa are left with is not empowerment but entrenchment, not justice but jokes.

If South Africa has any hope, it lies in tearing down this gilded policy and replacing it with something real. Focus on poverty, education, infrastructure, and jobs. Empower people by giving them tools, not by handing shares to cronies. Let entrepreneurship flourish without the weight of racial quotas and bureaucratic nightmares. Until then, Ramaphosa will remain the smiling mascot of a broken system, the billionaire preacher of a gospel no one believes.

One thing is for certain: When the drumbeat serves only the dancers at the front, the village is left in silence. That silence is what Ramaphosa offers today. South Africa deserves better: a chorus of opportunity, not the hollow echo of empowerment deals.