OPINION - In two speeches only days apart - one in Parliament, the other at the Black Business Council Summit - President Cyril Ramaphosa pledged to double down on transformationism and extend Black Economic Empowerment and other race-based economic sanctions into every industry.

The president committed himself, his party, and his coalition government to this path, despite months of intensive international and local opposition, as well as years of economic and fiscal failure.

Speaking at the same event, Ramaphosa’s minister of agriculture and leader of the second largest political party, John Steenhuisen, endorsed the Black Business Council’s BEE objectives without the least criticism.

A baffled President

The government’s transformation agenda has already had disastrous economic and social consequences. Expanding it will be a catastrophe exceedingly difficult to recover from, both for the white communities explicitly targeted by the transformationist project and for black communities ultimately suffering under the colourblind knock-on effects of political control over businesses.

During his speech in Parliament, president Ramaphosa said that he stood baffled at the suggestions that BEE had been economically harmful and should be scaled down.

This could only be baffling to a leader either willfully refusing to acknowledge the mountain of evidence piled up to the contrary or lacking understanding from prolonged sheltering from the hard realities of capital stewardship. Or both.

What explains the President's commitment to disastrous transformation?

It is a combination of at least three factors.

• Reason 1: Political hierarchy
A genuine and legitimate desire to promote flourishing black communities in harmony with white and other minority communities has been distorted by a quest for black dominance.
President Ramaphosa styles this quest as a commitment to equality, arguing that “the ownership, the management, and the control” of the economy should “reflect the demographics of our country.” In practice, however, it is a distinct political goal to entrench a preferred political and ethnic hierarchy, not only in the economy as a whole, but inside every company and organisation.

• Reason 2: Economic illiteracy
Economic illiteracy leads to misguided beliefs that poverty is caused by a lack of access to the “means of production”.
This erroneous economics prevents the government from recognising that its policies of forced ownership transfers and forced hiring increase poverty among black people. The lack of understanding prevents the operation of what would otherwise be a constraining factor on transformationist ambitions. A negative feedback loop arises in which the government genuinely believes that the solution to more black poverty is more of the transformationism that ensures poverty.

• Reason 3: Self-enrichment
A vast patronage network of people seeking political paths to wealth has developed around the state. This network is not just willing to keep BEE in place at public expense, and even at the acute expense of black communities, but demands more BEE. This group sees BEE as vital to its economic interests and is therefore a formidable lobby group and influence on the government.

What’s coming

The current phase of the government’s transformation agenda is to turn BEE and Employment Equity into prerequisites for participating in economic activity, in what amounts to targeted domestic economic sanctions against white people and white-owned businesses. 

Of course, the harmful consequences won’t stop with white people, because of the collateral damage the sanctions will do to employees, business partners and members of the public who are not white, but such is the government’s commitment to transformation.

Current or pending measures include:

• Financial-services licences – insurers, asset-managers, and financial advisors at risk of being forced to keep set BEE scores to retain and obtain licences.

• Medical & Pharmaceutical licences – enforcement of BEE for permits for medicines and equipment.

• Real Estate – developers and estate agents would lose operating certificates without BEE credentials.

• Agri-business – import and export permits increasingly require BEE compliance.

• R100bn “Transformation Fund” – proposal for a central fund to absorb company ESG spending for race-based distribution.

• Aviation licences – licensing councils working to tie BEE status to operating licences.

• Competition approvals – merger consent hinges on racial-ownership targets and payments.

• Employment Equity quotas – from September 2025, firms with 50+ staff must meet demographic ceilings that can cap white-male employees at 4%. Firms face crippling fines and prosecution for non-compliance.

• Mining charter – draft rules raise already-onerous BEE thresholds even as the sector declines.

• Enforcement powers – amendments aim to turn the BEE Commission into a tribunal with broad investigative reach and greater powers of sanction.

Pushing back

Sakeliga has already successfully pushed back some of these initiatives through legal threats (real estate, aviation, deal approvals), forcing bureaucrats to publicly confirm their lack of authority in a relevant industry (financial services, aviation), and launching active litigation against regulations and legislation (real estate, aviation).

Fully countering this escalating wave of BEE will require a combination of three things:

• unprecedented litigation;
• unprecedented pressure; and
• an independent business ethic of maximum appropriate non-cooperation with harmful and unethical state requirements.

An existential choice

Sakeliga and its partners in business face an urgent and existential decision:
Either we become the strongest organised business league this country has ever seen – and prevent transformationism from ruining the country – or we settle for making money on the way down, as our children emigrate, our communities break up, and society all around us decays and impoverishes.

How you can help
Sakeliga has experienced excellent success in recent years, as confidence in our efforts has strengthened. Your first or increased contribution to match these escalating threats makes a real difference to the success of the Sakeliga mission.
Visit donate.sakeliga.co.za/en.

Read more Opinion articles here.

Disclaimer: The opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of Group Editors and its publications. 

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