If business, government, and civil society embrace capability before compliance, this could mark a turning point for genuine inclusion, writes Hiten Keshave
South Africa stands once again at a critical crossroads in its journey toward economic redress. The Democratic Alliance’s recently gazetted Economic Inclusion for All Bill, which proposes dismantling the Broad-Based Black Economic Empowerment (B-BBEE) framework in favour of a so-called ‘poverty-based’ or ‘needs-based’ procurement model, has reignited the national debate on how we confront the enduring legacy of apartheid-era exclusion.
Make no mistake, redress is essential. It has been 31 years since South Africa became a democracy, yet far too many citizens remain excluded from meaningful economic participation. Wealth remains concentrated in the hands of a few, and unemployment, particularly among young black South Africans, hovers above 60%.
Millions of young people lack access to work, skills development, and capital. If we fail to address this, the country risks entrenching the very inequalities democracy promised to dismantle.
B-BBEE was designed as a tool for transformation, not a transactional checkbox. Many companies still treat B-BBEE as a tick-box exercise, allocating shares or non-executive positions that offer little tangible benefit to historically disadvantaged South Africans, and to this extent, the DA is correct in highlighting that the system has not delivered on its full promise.
However, while the system has its flaws, with fronting, tokenism, and elite capture all distorting its intent, the solution cannot be to replace it with a model that assumes poverty and race are interchangeable experiences of exclusion.
Some ownership transfers have been achieved, but economic mobility, supplier development, and vibrant local business ecosystems remain limited. Without these, transformation risks being a hollow promise on paper without real-world impact. Repealing B-BBEE would undo decades of progress in local procurement, SME support, and enterprise development.
South Africa doesn’t need a retreat. It needs a reset.
I work closely with SMEs and growth companies and have seen firsthand what happens when empowerment is treated as optional. Procurement patterns revert to old habits, incentives fade, and the most marginalised suffer. Empowerment cannot rely on goodwill alone. Instead, it must be embedded in how we do business.
The DA’s call to shift from race-based quotas to outcomes-focused inclusion highlights a critical point that we must move beyond compliance reporting to measurable social impact. Linking procurement incentives to measurable social impact, including job creation, skills development, and local enterprise growth, is a step in the right direction.
If designed effectively, such a system could mirror outcomes-driven models like the Automotive Industry Transformation Fund (AITF), which, since 2020, has injected nearly R600 million into roughly 67 Black-owned businesses (with a target of 90 by 2029) and allocated around 30% of funding to women-owned firms, demonstrating the potential of outcomes-driven approaches.
However, where the proposal falls short is in its framing of poverty as the singular lens of disadvantage. Poverty is a symptom, not the root cause, of exclusion, and it often stems from structural racial and spatial inequities. Addressing one without the other risks treating the wound without understanding the injury.
However, the DA’s proposed scorecard, which prioritises cost over inclusion, risks reducing empowerment to a token metric. Real inclusion cannot be one-fifth of the equation; otherwise, cost dominates, and inequalities persist.
Poverty Is Not a Proxy for Redress
Replacing race with poverty as a measure of disadvantage oversimplifies South Africa’s complex reality. Poverty often reflects deeper structural inequities rooted in race, geography, and education. While poverty must indeed form part of the inclusion equation, it cannot replace race as the defining marker of historical and systemic exclusion. The two intersect but are not synonymous. A purely poverty-based model may inadvertently favour short-term relief over long-term structural transformation.
A modern empowerment framework must be multi-dimensional, addressing poverty alongside race, gender, geography, education, and disability. Real inclusion targets overlapping disadvantages that prevent meaningful participation in the economy.
If there is one area where B-BBEE has shown tangible impact, it is Enterprise and Supplier Development (ESD), which links corporate procurement with small business ecosystems, providing capital, capability, and collaboration. Removing B-BBEE without safeguarding ESD would reverse progress. The next evolution should shift ESD from short-term funding to genuine access to markets, technology, and finance, creating resilient suppliers capable of scaling and sustaining growth independently. ESD bridges policy intent with lived empowerment.
A reimagined empowerment framework must prioritise accountability. Success should be measured not by audits alone but by real outcomes such as jobs created, suppliers developed, ownership transferred, and capabilities built. Transformation must be embedded in daily operations and long-term strategy. Businesses should be rewarded for tangible results and penalised for window-dressing. Only then can reporting shift from compliance to impact.
Transformation requires capability, collaboration, and integration into business ecosystems. Ownership without capability is fragile, but capability without opportunity is futile. Both must work in concert, supported by business, government, and civil society. Success should be measured by sustainable business growth, job creation, and individuals moving from dependency to self-sufficiency. Transparency and accountability are essential, and it is essential that companies and public entities disclose not just investments but also survival rates of Black-owned enterprises, procurement spend with local suppliers, and measurable skills transfers.
Inclusion must address intersecting challenges like gender, geography, education, disability, and race. Transformation should evolve from isolated compliance acts to ecosystem-building. Aligning ESD, black industrialist support, township enterprise growth, and procurement reform creates a self-sustaining cycle of inclusion and shared prosperity.
Why does this matter? The stakes could not be higher. Our economy remains sluggish, youth unemployment is devastatingly high, and inequality continues to define our national story. Transformation is not a luxury or a political slogan but an economic necessity. Abandoning empowerment risks widening the gap between a connected elite and a disenfranchised majority.
The DA’s proposal underscores frustrations with B-BBEE’s shortcomings but replacing it with a poverty-based model would be a step backward. South Africa needs reform, not repeal. We need an empowerment framework that restores trust, rewards real impact and remains relevant in a changing economy.
If business, government, and civil society embrace capability before compliance, this could mark a turning point for genuine inclusion. Transformation must become a core principle, not a transaction, ensuring empowerment is the norm, not the exception.
Hiten Keshave is the CEO of Unconventional CA.