Africa-Press – South-Africa. A top South African banker criticized the nation’s Black economic empowerment laws as a misfire that’s failed to spread wealth or opportunity after more than three decades.
“We don’t think opportunity should be linked to party membership, which is what the application of BEE has led to,” Investec CEO Fani Titi told reporters at the company’s Johannesburg headquarters on Wednesday.
“At a personal level, I think there’s been a misapplication of the policy of BEE.”
Titi’s remarks add to a raging debate about the benefits of South African laws that were introduced to address wealth disparities between races that stemmed from apartheid rule, an era in which Black people were subjugated and excluded from the formal economy.
Earlier this week, the Democratic Alliance, South Africa’s second-largest party and a member of the ruling coalition formed after the African National Congress lost its outright majority in last year’s election, called for the laws to be replaced.
The party said the policy has become a vehicle for state-sponsored graft, theft and fraud, and proposed an Economic Inclusion for All Bill that seeks to create a new public procurement system to promotes genuine and measurable economic empowerment.
Almost a third of Black respondents in an Ipsos survey commissioned by Cape Town-based News24 earlier this year said the policy should be scrapped and 22% were unsure.
“I can understand the frustration that there is,” Titi said. “You’ve had employment-equity legislation for 30 years,” yet it hasn’t achieved the desired effect, he said.
Black South Africans, who account for more than 80% of the country’s 63 million people, face a far higher unemployment rate than their White counterparts — 37.1% compared with 8.2%. White households on average also earn almost five times more than Black families.
Reviving growth in Africa’s most industrialized economy, which has expanded less than 1% a year on average for more than a decade, will require broadening participation and ensuring opportunities are more widely shared, Titi said.
A system that benefits those close to power is problematic and “on that score the criticism of BEE is justified,” he said.
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