The Congress of South African Trade Unions (COSATU) is underwhelmed by the Free Market Foundation (FMF)’s latest tirade opposing any attempts by government and society to transform and deracialise the economy, including through Broad-Based Black Economic Empowerment (B-BBEE).

Whilst the FMF’s ideologically driven opposition to any efforts at transformation and empowerment to address 350 years of systemic discrimination under colonial and apartheid rule are well known, it is bewildering that their, “The Costs of B-BBEE Compliance”, research paper is little more than a collection of ideological grievances and random but unrelated economic statistics, but research it is not.  Despite its gotcha attempt at a title it does not provide a single instance of evidence to validate its thesis that B-BBEE is a financial burden to the state and a hindrance to economic growth and jobs.    

It provides no breakdown backed up by actual research as to any financial burden to the state nor how B-BBEE has been an obstacle to growing the economy and reducing unemployment.  Strangely it cites statistics related to real and potential growth overall, but no evidence of the relationship between those and B-BBEE.  It may as well have blamed constitutional democracy for our economic challenges.

An actual research paper would have analysed the impacts of the 2008 global economic crisis, the decade of state capture and corruption, loadshedding and under investments in State-Owned Enterprises, struggling public and municipal services, and the COVID-19 global pandemic.  Bizarrely the FMF’s glossy 48-page pamphlet did not cite any of these, not even once!

Research not predetermined to affirm an ideological hostility to transformation and the upliftment of historically disadvantaged communities; would have examined the economic, social and other costs to society and the economy of not addressing South Africa’s apartheid induced legacies of racially determined unemployment, poverty and inequality.  One would have assumed that Zimbabwe would have registered as an example of the very real economic consequences of not addressing our painful socio-economic faultlines.

No reference is made to the need to overcome our still prevalent racial divides as evidenced by countless employment equity studies confirming that most senior positions in the private sector are held by White males or that economic ownership, including shares on the JSE remain largely White held. 

The authors are silent on the Constitution’s prescripts requiring the state to address not only the legacies of the past, but also the inequalities of today, and that its tools to do so include legislation, procurement and budgetary.  Similarly, no reference is made to the Constitutional Court judgement affirming the state’s transformation obligations to society. 

B-BBEE is not perfect, but its objectives remain sound and a necessity if we are to overcome our status as the world’s most unequal society.  The challenges with regards to achieving the progressive objectives of B-BBEE do not negate its successes in nurturing a growing Black middle class or nascent Black industrialists.  Like any policy, it needs to be adjusted periodically to address various challenges.

COSATU is disappointed that Solidarity has signed onto this ideologically misguided attack on B-BBEE as its own members have been major beneficiaries of the Employees Shareholder Ownership Programme (ESOPs), one of the key pillars of B-BBEE targeted at workers of all demographic groups, with over 550 000 benefiting over the recent past.  Similarly, it is under B-BBEE as well as Employment Equity, that White women have been major beneficiaries of B-BBEE. 

It is a pity that Solidarity, a sister trade union, whose members like other workers are in need and beneficiaries of B-BBEE, has been duped into hitching its bandwagon onto the FMF’s attack on transformation and the need to address the deeply entrenched levels of poverty and inequality prevalent across working class communities.  COSATU will continue to engage Solidarity on the importance of both the unity of workers and the transformation journey needed to address South Africa’s deep faultlines.  Their members’ interests lay with a more equal and just South Africa, not one which maintains our untenable levels of poverty and inequality.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Cell: 082 785 0687

Email: matthew@cosatu.org.za