Together with one of the most progressive constitutions in the world, South Africa has a plethora of transformation-related legislation. Recently, another term has been bandied about by politicians and the media - radical economic transformation. But what is it?
Unless it is unpacked and is linked to a measurement tool, it will remain nothing more than a political mantra.
At the World Economic Forum, President Jacob Zuma said that when South Africa talked about radical economic transformation, it meant a change that would lead to inclusive growth.
He has also alluded to the fact that this would include forced land redistribution, black ownership and management of companies, and the hiring and training of black (particularly African) people and women South Africans.The existing transformation laws address all of the above except for two crucial points - the matter of land distribution (although agricultural land is partially covered in the AgriBEE codes) and the focus on African as opposed to black people in general.
The most prominent empowerment laws in the country are:
• The Employment Equity Act;
• The Broad-Based Black Economic Empowerment Act and codes;
• The Skills Development Act and Levies Act; and
The Preferential Procurement Policy Framework Act.
One also needs to take into account various other sources and programmes, such as the National Development Plan and the Black Industrialist Programme.Why then, with these various forms of legislation in place since as early as 2008, is economic empowerment still not a reality for the majority of South Africans?
Perhaps the following issues contribute to the lack of radical economic transformation.
Presently the transformation laws are "managed" by three government departments. Employment equity is the domain of the Department of Labour, B-BBEE is assigned to the Department of Trade and Industry and the Preferential Procurement Policy Framework Act falls under the National Treasury.
This leads to complications and a lack of consistent application of the laws. There is little or no incentive for job creation in any of the above-mentioned legislation.
There are other challenges, too:
• The complexity of the B-BBEE legislation. Not only are the codes (the measurement principles) badly drafted with many interpretational issues, but the formula for establishing scores is complex. This leads to unscrupulous application of the codes and, with few experts in the industry, this is difficult to detect; and
• No focus on African economic empowerment. The draft amendment to regulations in terms of the Preferential Procurement Policy Framework Act introduced the concept of providing additional preference points for businesses owned by African women. However, the final version of the amendments reverted to the definition of black as being African, Indian and coloured.This is a hugely politicised area that needs to be dealt with boldly by the lawmakers if radical economic transformation is to be a reality in South Africa.
There has to be an acknowledgement that during apartheid black South Africans were treated unfairly at different levels, with Africans being discriminated against the most.
The current transformation legislation now treats all blacks equally.
There is an urgent need to have real statistics on the level of government and private-sector procurement from African-owned businesses in the country and moves to ensure that additional preference points are allocated for procurement from African-owned businesses.
Sadly, none of our transformation legislation allows for this.
The legislation will need to be adjusted to provide for radical economic empowerment.
If the fundamental problems are not sorted out, it will only be more of the same in another 23 years' time.
• Brun is co-author of The Practical Guide to the Amended B-BBEE Codes of Good Practice, written with Maxi-Lee Machado and published by LexisNexis South Africa..