Glittering towers, shadowed lives: why Peter Bruce's ‘voluntary' transformation is a cruel mirage

TimesLIVE

12-06-2025

Finally, the Financial Sector Charter saw dramatic shifts once banks were obliged to earn Level-1 BEE status. The Banking Association's 2024 Transformation Report now shows a remarkable 83% of total procurement spend landing with black-owned suppliers, a monumental leap from under 30% just a decade earlier.
Critics like Bruce are right that B-BBEE needs sharpening. It has had potentially detrimental shortcomings, including instances of fronting and the enrichment of a politically connected few, creating a new class of black elite that has alienated the very masses the policy was meant to uplift. However, these should be arguments for refining BEE, not for scrapping it altogether. A constructive agenda should build on, not dismantle, the existing scaffold of transformation legislation.
A recent peer-reviewed study, by German economists at Ruhr University Bochum and the German Institute of Development and Sustainability, published in the June 2025 Journal of Comparative Economics, analysed firm-level data for 356 JSE-listed companies over 15 years (2004—2019). Their findings are unequivocal: BEE has had no negative impact on profitability, has a small but statistically significant positive effect on turnover and a mildly positive effect on labour productivity. Specifically, a one-point increase in the BEE score is associated with a small increase in turnover of up to 0.8%.
This suggests that while there might be costs associated with BEE compliance, these do not necessarily translate into reduced profitability for firms. This disproves the critique that BEE harms businesses, at least within the sample of large listed firms in South Africa.
Additionally, reduced discrimination in the labour market and enhanced human capital levels through skills development dimensions are likely to enhance labour productivity. The study highlights that larger firms are particularly likely to benefit from BEE in terms of higher turnover. This evidence directly refutes the claims that BEE universally undermines business performance or confidence. Instead, it suggests a nuanced impact where for many firms, particularly larger ones, BEE compliance can lead to tangible benefits.
When a significant portion of the population sees little tangible improvement in their economic circumstances despite political freedom, it corrodes faith in the democratic system and its institutions. This fertile ground of disillusionment and frustration provides a breeding ground for populist movements that promise false radical change and challenge the existing order. The rise of Donald Trump's Make America Great Again movement in the US, the resurgence of Nigel Farage with his Reform UK, the Alternative für Deutschland in Germany, Marine Le Pen's National Rally Party in France, and the recent election of Karol Nawrocki in Poland are the bitter fruits of this widespread disaffection. They weaponise the anger from unmet expectations of those who feel left behind by the current economic order. Our very own EFF and MK Party belong to the same milieu.
Abrahams closed Mine Boy with Xuma and his comrades marching up the reef, their lanterns held high, demanding humanity's just dividend — dignity, work and an end to systemic exploitation. Bruce would ask them to dim those lanterns and trust the mine-owners' goodwill. History, however, tells us unequivocally that the shadows at the bottom will only thicken if we succumb to such a deceptive illusion. Transformation in South Africa cannot rely on a handshake or a fleeting promise.