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Daily Maverick
7 days ago
- Business
- Daily Maverick
Do the World Bank and International Monetary Fund say BEE is holding SA back?
In Parliament this week, President Cyril Ramaphosa said that the World Bank and the IMF had identified concentrated ownership of the economy, not BEE, as constraining South Africa's economic growth. Was he right? 'For you, sir, to say that BEE [black economic empowerment] is holding our economy back goes completely against what even the World Bank says!' Thus responded a decidedly testy President Cyril Ramaphosa to Freedom Front Plus leader Corné Mulder in Parliament this week on the topic of the government's economic policies and whether he would be prepared to ditch BEE. Ramaphosa continued: 'A few years ago, the World Bank and the IMF [International Monetary Fund] came out with a report that one of the things that holds our economy back from growth is the level of concentration. Concentration because, they said, the ownership of the economy is in far too few hands. Ownership has not spread. That is what the World Bank and IMF said.' But is Ramaphosa correct? Which report was he talking about? The difficulty here is that Ramaphosa did not specify which reports from 'a few years ago' he was referencing, and Daily Maverick's questions to his spokesperson in this regard went unanswered on Thursday, 29 May. Both the World Bank and the IMF, however, released reports about South Africa earlier this year. The IMF's was a Country Report launched in January; the World Bank's was launched in February and titled ' Driving Inclusive Growth in South Africa: Quick Wins with Competitive Markets and Efficient Institutions '. What does the IMF say about BEE? The IMF's latest report, partially vindicating Ramaphosa, does not explicitly mention BEE, employment equity or affirmative action. It says that its own figures show 'that white South Africans earn almost twice as much as black South Africans on average after controlling for key individual and structural characteristics'. It further states: 'Closing the gender and racial pay gaps would increase the income of women and non-white population, whose wages remain significantly below the average. Achieving this goal would reduce the Gini coefficient [measuring inequality] by 4 points.' How about the World Bank? Here's where things get a bit more uncomfortable for Ramaphosa, because the World Bank report did identify BEE as a potential 'market distortion' which has 'not been evaluated for effectiveness'. The report did not, however, call for the scrapping of BEE. It stated instead that foreign investors, specifically, should be given alternatives to the ownership regulations of BEE. One of the 'essential reforms' recommended by the World Bank was the following: 'Streamlining firm entry and operational prerequisites related to the 2013 B-BBEE for foreign investors by making systematic use of Equity Equivalence Investment Programs when investors commit to train Black workers and develop supply chains with local businesses. The B-BBEE requires companies to meet specific thresholds of Black ownership and management control to participate in government tenders and contracts. While the B-BBEE is well intentioned, managing required scorecards places a heavy burden on public administration and foreign companies.' It noted that the government had already applied the Equity Equivalence Investment Programe to IT companies, including Microsoft and Amazon Web Services, and banks — JP Morgan — since 2021, permitting these companies to make up their BEE scorecards through alternative mechanisms, including training and involving small black-owned companies in their supply chain. 'The government's next step could be to extend these programs more broadly by clearly outlining eligibility criteria for investors interested in participating,' the World Bank advised. What did these bodies have to say about the 'concentration' issue? Ramaphosa is correct that both the IMF and the World Bank identified market concentration as one of the constraints on economic growth, although in both reports the issue received only a few sentences of attention. 'Market concentration has substantial costs for the economy, and these have risen over time,' wrote the World Bank. 'When market power is concentrated in a few dominant firms, markets are unlikely to innovate and find solutions that will allow them to remain competitive over time.' The IMF, meanwhile, recorded: 'High market concentration in several sectors, including manufacturing and banking, has inhibited the emergence of smaller firms that create new jobs.' Conclusion: Half-truths are the name of the game all over The World Bank did not give the South African government a free pass on BEE, as Ramaphosa seemed to suggest; it did identify the policy as a potential deterrent to foreign investment in particular. But neither did the World Bank or the IMF suggest in these two reports that BEE should be scrapped as the primary obstacle to economic growth, as Ramaphosa's critics have made out. In 2020, the DA wrote to the IMF to request that a loan of $4.3-billion granted by the IMF for Covid distress payments to companies be conditional on it being exempted from BEE requirements. The IMF did not accede to the request. DM
IOL News
28-05-2025
- Politics
- IOL News
DA's hypocrisy knows no bounds
DA leader John Steenhuisen interacts with US President Donald Trump and President Cyril Ramaphosa during a recent official visit to Washington. Image: The Presidency PRESIDENT Cyril Ramaphosa may have to think twice before including DA leader John Steenhuisen in official visits after his poor performance characterised by political posturing during the heated Oval Office meeting in the US last week. Ahead of his visit to the US as part of Ramaphosa's delegation, Steenhuisen promised that the highest issues on his priority list would be securing trade relations between the US and SA, particularly in agriculture, to protect jobs, grow the economy and expand employment opportunities. 'This delegation to Washington DC represents all South Africans, who have entrusted us to put the shared national interests, and desire for economic growth and job creation first, ahead of any party, or ideological positions. As a proud member of this GNU delegation, I will endeavor to ensure every effort is made to mend, and improve relations between the US and SA.' When presented with a rare chance to do so, Steenhuisen bungled it spectacularly. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Instead of dispelling Trump's false narrative of white genocide in South Africa, he continued his party's tired claim that there were farm murders here, indirectly confirming the fake news that farmers were specifically targeted. How affirming would it have been for him to inform the world that Julius Malema's chants were nothing more than that; and quite frankly the courts have taken the position that they remain part of our painful history. But he would not dare say this because it would be against every effort his party had made to win back the Afrikaner vote from the Freedom Front Plus. Steenhuisen, with the help of his colleagues in the DA, just has to study the recent crime stats to see why his argument of farm murders is problematic. A breakdown of the stats shows that only six murders linked to farms were recorded in the first quarter of 2025, with five of the victims being black. Compare that with the murders taking place daily- not over three months- in Mitchells Plain, Manenberg, Nyanga, Inanda, Umlazi and Mamelodi, then you see why it's difficult arguing against criticism that Steenhuisen and the DA are hypocrites.
Daily Maverick
27-05-2025
- Business
- Daily Maverick
It's not BEE holding SA economy back, it's exclusive ownership, says Ramaphosa
In defence of BEE, President Cyril Ramaphosa says South Africa's redress policies aren't the issue stifling economic growth. 'Why can't black people be made to own productive aspects of work? Why can't they be rich as well?' President Cyril Ramaphosa asked MPs in the House on Tuesday. They were questions posed by the President in a lengthy response to a question from Freedom Front Plus (FF Plus) leader and MP Dr Corné Mulder, who asked, during a Q&A session in Parliament, whether Ramaphosa was prepared to develop an economic policy 'that can make possible, real economic growth' in South Africa. This 'real, new economic policy', as far as Mulder was concerned, needs to take a different approach with regard to 'certain basic things' that he suggested Ramaphosa wasn't prepared to do. Mulder said these 'certain basic things' related to black economic empowerment (BEE), employment equity, affirmative action and the Expropriation Act. (The FF Plus, a partner in SA's 10-party broad coalition government, is strongly opposed to the aforementioned policies.) 'Are you prepared to do that?' Mulder asked Ramaphosa. The President delivered nothing short of a sharp klap in response, saying at several points in his speech that he was 'baffled by people who still hanker [for] policies of the past. 'I'm rather surprised and taken aback when I hear that policies of black economic empowerment militate against the growth of our economy. That I find quite surprising, because I work from the starting point that our economy was held back over many years by the racist policies of the past. Those racist policies prevented all South Africans — or the majority of South Africans — [from playing] a meaningful role in the economy of their own country. 'Black people were brought in [as] hewers of wood and drawers of water. They were brought in as labourers, they were not even seen as consumers. They were not seen as active players in the economic landscape of our country. 'With democracy, what has now been happening and what we seek to see happening is the opening up of the economy; the broadening up of economic participation, which if you observe, Honourable Dr Mulder, you will actually see, and it's right in your face,' said Ramaphosa. Ramaphosa's response was delivered with a particular intensity, possibly as a result of the current spotlight on South Africa's employment equity policies on the back of a new policy directive issued by the Department of Communications and Digital Technologies, which is looking at relaxing the regulations around BEE ownership for satellite internet service providers. The move is seen as potentially paving the way for Starlink, the satellite internet company owned by the tech billionaire and de facto head of the US Department of Government Efficiency, Elon Musk, to operate in SA without ceding ownership. Race-based redress in its various forms in SA has been the subject of attacks from Musk and US President Donald Trump for months. Ramaphosa's statements also follow the DA's challenge to Section 15A of the Employment Equity Amendment Act heard in the Gauteng Division of the High Court earlier this month. Despite years of empowerment policies, deeply entrenched structural inequalities remain stubbornly resistant, which critics have pointed to as signs that the policies have failed to address the challenge of redress, Daily Maverick has reported. Critics claim BEE has enabled corruption and State Capture, with the DA's Helen Zille equating redress with State Capture. Ramaphosa said the Government of National Unity would spend 'a considerable amount of hours' in the days to come discussing the economic strategy and trajectory that South Africa should pursue. He continued: 'Our ambition, Honourable Dr Mulder, is to make sure that our economy grows [more] than what the projections are currently. 'Our objective is to spread economic participation broadly, and I will hold on to the argument that the more we have previously disadvantaged people playing a role in the economy of their own country, the better it is.' 'Concentration of ownership' Ramaphosa referred to reports by the World Bank and the International Monetary Fund, which, he said, found that among the factors restricting South Africa's economic growth was the level of market and capital ownership concentration. 'Concentration because, they said, the ownership of the economy is in far too few hands — ownership has not spread. 'Now, I find it very worrying that we continue to have this notion that BEE is the one that's holding our economy back. It is the partial and exclusive ownership of the means of production in our country that is holding this economy [back] from growing,' said Ramaphosa. 'If we accept that the ownership of our economy is imbalanced, the clause on equality in our Constitution seeks to undo that; to redress that. So, therefore, ownership of our economy should be broadened. 'And I can tell you, Dr Mulder, there's nothing that gives our people [as much] joy — particularly black people — as they go around and they find that this production facility's owned by a black person. It warms one's heart, it makes us feel so good. Because we've come from a horrible past where that was not allowed by law,' he said. Ramaphosa added that in apartheid South Africa, one would never see black people featured in advertisements for everyday products such as milk or soap. And yet, today, black people appear in almost every advertisement for a South African product — a reflection of the growing realisation that they are key consumers and active economic players, according to Ramaphosa. 'Now, those that would want black people just to play the consumer role are truly mistaken. Black people must play a productive role as well,' he told the House. 'We must allow more and more people to play an important role in the economy of our country. And this is what baffles me by those who are opposed to black economic empowerment. I say, what do you want to see happening — do you want to see black people continuing to play the role of labourers, drawers of water, hewers of wood and consumers only? Why can't black people be made to own productive aspects of work? Why can't they be rich as well? 'Dr Mulder, you look at the Afrikaners, the history of your people. If you look at the history of your people, they were held back by the English and, with [the] latter days, they were enabled; they became more and more economically empowered… Why can't the same be done for black people?' DM
Mail & Guardian
27-05-2025
- Business
- Mail & Guardian
Ramaphosa: Racial redress is not stunting growth
President Cyril Ramaphosa.(@PresidencyZA/X) Racial redress is not a hindrance to Ramaphosa told Freedom Front Plus leader Corné Mulder he failed to understand how those who questioned affirmative action could not see the real problem is black people do not own a big enough share of the means of economic production in the country. 'I am rather surprised and taken aback when I hear that policies of black economic empowerment militate against the growth of our economy. That, I find quite surprising because I work from the starting point that our economy was held back over many years by the racist policies of the past,' he said. Apartheid prevented the majority of South Africans from playing a meaningful role in the economy, he continued. 'Black people were brought in as hewers and wood and drawers of water and they were just brought in as labourers. They were not even seen as consumers. They were not seen as active players in the economic landscape of our country.' Mulder had suggested that the government should rewrite economic policy to create growth, and in that process abandon affirmative action and the concept of expropriation without compensation because it was not serving the country. Ramaphosa countered that the reality of apartheid, including the wholesale exclusion of black South Africans from the economy, could not be forgotten as if it were merely 'a bad dream'. 'You would never see a black person being made to advertise either soap or milk or anything. Today every advert you look at has got black people because it is now being realised that it is black people who are the consumers.' But, he added, there must be a realisation that black South Africans must moreover command the levers of the economy to reduce inequality and poverty. 'So I am really baffled, I am baffled by people who still hanker for policies of the past and to have you, Sir, say black economic empowerment is holding our economy back,' he said. 'It is the partial and exclusive ownership of the means of production in our country that is holding this economy from growing. 'Why can't black people be made to own productive aspects of our economy, why can't they be rich as well?' The national debate about affirmative action has been revived by the The Democratic Alliance's court challenges to the In Tuesday's question session, MPs from the Patriotic Alliance (PA), uMkhonto weSiswe party and African Christian Democratic Party challenged the president about the racial classification in South Africa 30 years after the end of apartheid. The PA's Marlon Daniels demanded to know why coloured, Indian, Khoisan and white South Africans were not deemed African. Ramaphosa said it was regrettable that racial classification endured, but that the very aim of redress was creating a society where it no longer had any place. 'It is most unfortunate that the classifications that we have inherited from apartheid have tended to continue and our clear intent that we should see those classifications of our people withering away because we are all Africans, we are all South Africans. 'To rid ourselves of that form of classification we do need to take steps to say this group, and that group and that group were previously disadvantaged and we therefore have to take steps to ensure they are put in a better position.' It did not imply discrimination, he said. 'There should never be a sense that there is any group that is more special than any other, we are all equal. As we move forward, our objective is to consolidate the unity of our people as one people, as Africans.' He said those who argued against affirmative action were trying to put a plaster on the deep wound inflicted by apartheid. 'That sore does need to be lanced, it needs to be properly repaired and to repair it you need to go to the depth of it … you've got to name everything for what it is because unless you do so, you will never be able to rid our country of the legacy of the past.'
The Citizen
23-05-2025
- The Citizen
Tshwane addresses wet electricity cables crisis in Doornpoort, Montana
The Tshwane metro has confirmed that persistent power outages in the Doornpoort and Montana are due to critical infrastructure challenges, specifically electricity cables submerged in waterlogged terrain. Tshwane spokesperson Lindela Mashigo stated that the problem stems from repeated vandalism and theft on private land (Farm Doornpoort 320 JR, Portion 280), which has severely damaged the cables and made routine maintenance nearly impossible. Residents have endured daily power outages for months, with some areas recently experiencing more than 24 hours without electricity. Frustrated community members have accused the municipality of failing to act decisively, citing delays and the misallocation of funds initially earmarked for rerouting the affected power lines. According to Mashigo, funds have not yet been allocated for the rerouting or upgrading of the infrastructure. He said the metro has, however, submitted a request for capital funding to re-engineer the electrical network. 'Should the request be approved, the metro would either replace the damaged cables along the registered servitude or reroute them via the R101. Mashigo said the cables were originally installed according to regulations and do not, under current conditions, constitute a public safety hazard. However, he admitted that recurring cable joints, introduced due to theft and vandalism, are now highly vulnerable to water exposure during heavy rains, which has led to frequent blackouts. While residents such as Deon Venter allege that funds were previously allocated to solve the issue, Mashigo firmly denied this. Venter questioned why previously promised funds had gone missing and accused the metro of diverting service delivery budgets to security and water tanker services. 'If the money was made available as per the budget speech last year, this issue would have been resolved,' said Venter. The metro has yet to offer a clear timeline for when the repairs or rerouting will begin. For now, the only assurance residents have is that repair teams will respond to outages as they occur, with more permanent solutions contingent on future funding approvals. Venter demanded more than just patchwork fixes. He wants transparency, accountability, and urgent investment in infrastructure to end the cycle of darkness and disruption in his community. WATCH: Freedom Front Plus councillor Mark Surgeon said three underground cables run through the open field north of Doornpoort and under the highway, and two of those cables have been damaged over time due to excessive cable theft. 'Where the cable is repaired, it creates a weak point, so typically when we have a lot of load-shedding back in the day, whenever the cable is re-energised after load-shedding, it causes a jolt, and it sometimes causes that cable to open up in a bit of water. 'During the previous administration I think it was around initially R80-million that was budgeted to replace these cables and reroute them. Then that number was brought down to around 55 due to some good cost-cutting measures of meeting the work would still be done just at a cheaper cost and then that work never materialised with the change of administration,' said Surgeon. He said that with the new budget coming through council, they have not seen any evidence of this project being budgeted. 'Unfortunately, at this stage, it looks like the cables will not be fixed for the foreseeable future unless there is some budget for it in the new budget.' ALSO READ: Progress made in metro's efforts to clean house Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
