BMF DENOUNCES WORLD BANK STATEMENT TO ROLL BACK B-BBEE
- BEE NEWS
- Mar 11
- 4 min read
The Office of the Presidency | 6 March 2025
The Black Management Forum (BMF) denounces the World Bank’s recent statement that South Africa should roll back its broad-based black economic empowerment (B-BBEE) labor policies in order to make South Africa more attractive to foreign investors.
The World Bank claims that black economic empowerment is an ‘excessive regulatory burden’ and that the policies need to be overhauled in order for South Africa’s economy to grow. This narrative suggests that B-BBEE is the stumbling block to economic growth and is oblivious of South Africa’s history of colonialism and apartheid which disenfranchised the black population and led to vast discrepancies in income, employment and general welfare, and which has made South Africa one of the most unequal countries in the world.
The World Bank’s remarks, as well as remarks by global business leaders such as Elon Musk, and recent withdrawal of US AID from South Africa all points to the critical shortage of public education around what B-BBEE is and its necessity in the South African context.
The BMF recommends that the Presidential B-BBEE commission utilise its role to fill this educational vacuum, so it does not further hamper the painstaking strides that have been taken to bring social transformation to our country.
Black South Africans are an overwhelmingly majority population and constitute 81.4%. However, black South Africans are also overwhelming marginalised from economic participation. The unemployment rate is around 32% and disproportionately impacts black individuals. Furthermore, around 28 million are dependent on welfare because they lack access to the means to access economic opportunities.
B-BBEE policies provide direct support, grants, tax rebates, employment and training to black individuals and businesses to help mitigate the structures and systems that are exclusionary, and which hinder economic participation.
Importantly, the World Bank neglects to realise that black economic empowerment is not about racial preference: it is about economics. If the economy is not inclusive of 81.4% of its population, the economy will not grow, and it is exactly because South Africa has been obediently following neoliberal policies that this majority has been marginalised. The rise of the kasi economy, stokvels and ahost of other informal economic activities have arisen from the discrimination of customary economic activities for global free trade.
Today, those activities are valued at billions of rand. The formal economy, that has been dictated by international financial institutions such as the World Bank, have failed the black majority and through their own ingenuity they have created parallel structures of economic prosperity. Informality has provided affordable goods and services, jobs, allowed black businesses to flourish and grown black communities. In order to grow the stagnant South African economy, South Africa must leverage its unique strengths, such as its kasi economy and its burgeoning black middle-class and not abandon it by rolling back on B-BBEE.
It is only by embracing an inclusive and transformative economy that is proudly South African that we will get out of the economic disarray that we are in. BMF, therefore, strongly encourages the government to continue its black economic agenda.
Little value has come from South Africa’s flexibility to attract foreign investment. Instead, the country has been left to question the role of foreign investment. Globalisation has bypassed the state and, internationalism has given rise to global civil society, global governance and global justice.
Our state functions as part of a global community comprising of extra governmental and transnational actors in a multi-layered, global political stage of supranational governance. The concept of good governance as determined by international organisations is often in conflict with national laws, as well as traditions and customs, and serve foreign rather than domestic interests.
The World Bank has extended its reach to the economic, social and political realms of states serving as a ‘governor to governments. Economically, the World Bank claims to have a comparative advantage in providing analysis, evaluation, advice and finances to governments to reform their economies.
It dictates macro economic policy choices such as the use of resources, budget, policy formulation, poverty reduction strategies and participatory strategies. It monitors economy-wide reform, public expenditure and sector reform in over 100 countries and changes rules, regulations and investment strategies.
By continuing to allow the World Bank free reign to reform our rules, regulations and access our public information, we allow the Bank to use South Africa to serve the agenda of foreign capital at the cost of domestic prosperity.
Until we make significant strides to distance ourselves from foreign demands, our domestic economy will continue to be exploited and our national agenda to end poverty, unemployment, and inequality will never be achieved. We need to skillfully navigate global trade in away that keeps our priorities as the main focus.
While market triumphalism ended with the financial crisis of 2008, the neo-liberal agenda continues to be expanded into social spheres of life and has eclipsed public spaces. South Africa is deeply involved in a world economic system that dictates national responses leaving little room for it to pursue alternatives.
‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’.
