30 March
Blaai af vir Afrikaanse weergawe.
The Free Market Foundation (FMF) has submitted comments to the Department of Trade, Industry, and Competition (DTIC) on the proposed amendments to the B-BBEE Codes of Good Practice, warning that the draft changes would significantly deepen the economic, legal, and constitutional problems already associated with South Africa’s empowerment regime.
At the centre of the FMF’s submission is the proposed Transformation Fund, which the Foundation argues will operate as a practically compulsory levy on firms seeking to remain commercially competitive in South Africa.
According to the FMF, the issue is not simply one of policy design but of constitutional significance.
“The proposed amendments do not merely tweak the existing framework”, says Dr Morné Malan, Senior Associate at the FMF. “They risk transforming the B-BBEE Codes from a putative system of measurement into a mechanism for extracting financial contributions from firms through subordinate regulation. That raises serious concerns about legality, delegated authority, and parliamentary oversight.”
The draft amendments would incorporate the Transformation Fund into the Enterprise and Supplier Development (ESD) element of the scorecard and attach sub-minimum requirements to participation. While this may be presented as a technical compliance reform, the FMF argues that the commercial realities of South Africa’s regulatory environment mean that firms would face overwhelming pressure to contribute in order to preserve their B-BBEE status and remain viable in procurement, licensing, and other state-facing processes.
In the FMF’s view, that places the proposal dangerously close to a fiscal instrument in substance, even if it is not labelled as such in form.
“The Constitution is not indifferent to substance”, says Martin van Staden, FMF Head of Policy. “If government creates a framework under which companies are effectively compelled to transfer money into a centralised fund, then the legal question is not whether it is called a ‘tax’, but whether it functions like one. If it does, it cannot simply be introduced through ministerial codes.”
The FMF’s submission argues that the ministerial powers under section 9 of the B-BBEE Act permit the issuing of codes for measuring and guiding empowerment, but do not authorise the creation of a centralised funding mechanism that may operate as a de facto levy. It further notes that the Constitution reserves fiscal powers to Parliament and that any policy with the practical effect of extracting large-scale financial contributions from private firms should be subjected to full legislative scrutiny and democratic oversight.
Beyond its legal concerns, the FMF warns that the amendments would increase the already substantial costs and complexity of B-BBEE compliance. Rather than addressing long-standing concerns such as elite capture, weak broad-based impact, and heavy administrative burdens, the Foundation argues that the proposals would likely entrench and intensify them.
“South Africa does not need more policy mechanisms that make investment harder, growth weaker, and compliance more expensive”, says Malan. “Transformation, regardless of how one defines it, cannot be sustainably achieved in a stagnant economy. If policy reduces growth, it ultimately reduces the scope for real and durable empowerment.”
Alternative
While remaining critical of the principle underlying the broader architecture of race-based economic regulation, the Foundation has proposed constructive alternatives to the draft model currently under consideration.
Instead of embedding the Transformation Fund within the scorecard as an effectively compulsory component, the FMF recommends that it be restructured as a voluntary, parallel “top-up” mechanism. Under this approach, firms would be free to contribute to the Fund on a discretionary basis, and such contributions could count as an incremental enhancement to B-BBEE recognition without being tied to sub-minimum requirements or penalties for non-participation.
This model would materially reduce the legal and constitutional risks associated with the proposal, while also improving accountability and preserving business autonomy. A voluntary structure would make it more likely that firms demand transparency, measurable outcomes, and sound governance from the Fund itself.
“If the Department is serious about improving the transformation framework, then there are better ways to do it than by effectively coercing contributions through the scorecard,” says Van Staden. “A voluntary and performance-based model would be more constitutionally defensible, more economically rational, and more likely to attract genuine buy-in from firms. If the Fund is genuinely valuable, firms should choose to support it because it works, not because the state has cornered them into doing so.”
This submission comes after the FMF and the Solidarity Research Institute (SRI)’s landmark 2025 report, “The Costs of B-BBEE Compliance”, which quantified the policy’s staggering economic burden for the first time. The study estimates annual direct compliance costs at R145-290 billion – equivalent to 2-4% of GDP – with Ownership and ESD each contributing R40-85 billion. When dynamic effects are included, B-BBEE has reduced GDP growth by 1.5-3% per year and cost up to 192,000 jobs annually. Over nearly two decades, the cumulative drag exceeds R5 trillion in lost economic output.
The FMF’s submission builds on these findings to caution against further entrenching an inefficient, race-based framework.
“While we are not in the business of rubber-stamping bad policy, we have an obligation to try to stop bad policy from being made even worse”, concludes Malan.
The FMF has urged the DTIC to reconsider the current draft and to engage seriously with alternative approaches that are more consistent with the rule of law, sound economic governance, and the long-term interests of all South Africans.
Click here to read the full submission.
Click here to read the 2025 FMF-SRI report.
Ends.
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Vryemarkstigting waarsku dat nuwe SEB-voorstel ‘n onwettige agterdeur-belasting op besighede sal wees
30 Maart
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Die Vryemarkstigting (FMF) het kommentaar aan die Departement van Handel, Nywerheid, en Mededinging (DTIC) ingedien oor die voorgestelde wysigings aan die B-BBEE-Kodes van Goeie Praktyk. Die Stigting waarsku dat die konsepwysigings die ekonomiese, regs- en grondwetlike probleme wat reeds met Suid-Afrika se bemagtigingsregime geassosieer word, aansienlik sal verdiep.
In die kern van die FMF se kommentaar staan die voorgestelde Transformasiefonds, wat volgens die Stigting in praktyk as ‘n verpligte heffing op firmas sal funksioneer wat hul kommersiële mededingendheid in Suid-Afrika wil behou.
Volgens die FMF gaan dit nie bloot oor beleidsontwerp nie, maar oor ‘n kwessie van grondwetlike belang.
“Die voorgestelde wysigings is nie bloot ‘n verstelling van die bestaande raamwerk nie,” sê dr. Morné Malan, Senior Medewerker by die FMF. “Hulle loop die risiko om die B-BBEE-Kodes te verander van ‘n veronderstelde meetstelsel na ‘n meganisme om finansiële bydraes van firmas te onttrek deur middel van ondergeskikte regulering. Dit wek ernstige kommer oor wettigheid, gedelegeerde gesag, en parlementêre toesig.”
Die konsepwysigings sal die Transformasiefonds in die Ondernemings- en Verskaffersontwikkeling (ESD)-element van die telkaart inkorporeer en subminimumvereistes aan deelname koppel. Hoewel dit moontlik as ‘n tegniese nakomingshervorming voorgestel word, voer die FMF aan dat die kommersiële werklikhede van Suid-Afrika se reguleringsomgewing beteken dat firmas oorweldigende druk sal ondervind om by te dra om hul SEB-status te behou en lewensvatbaar te bly in verkrygings-, lisensiërings-, en ander staatsgerigte prosesse.
In die FMF se oordeel plaas dit die voorstel gevaarlik naby aan ‘n fiskale instrument in substansie, selfs al word dit nie as sodanig in vorm benoem nie.
“Die Grondwet is nie onverskillig teenoor substansie nie,” sê Martin van Staden, Beleidshoof by die FMF. “As die regering ‘n raamwerk skep waarvolgens maatskappye effektief verplig word om geld oor te dra na ‘n gesentraliseerde fonds, is die regsvraag nie of dit ‘n ‘belasting’ genoem word nie, maar of dit soos een funksioneer. Indien wel, kan dit nie eenvoudig deur ministeriële kodes ingestel word nie.”
Die FMF se kommentaar voer aan dat die ministeriële bevoegdhede ingevolge artikel 9 van die B-BBEE-Wet slegs die uitreiking van kodes vir die meting en leiding van bemagtiging toelaat, maar nie die skepping van ‘n gesentraliseerde befondsingsmeganisme wat as ‘n de facto-heffing kan funksioneer nie. Dit wys verder daarop dat die Grondwet fiskale bevoegdhede aan die Parlement voorbehou en dat enige beleid met die praktiese effek van grootskaalse finansiële onttrekking uit private firmas aan volledige wetgewende ondersoek en demokratiese toesig onderwerp moet word.
Benewens sy regsbesware waarsku die FMF dat die wysigings die reeds aansienlike kostes en kompleksiteit van SEB-nakoming sal verhoog. In plaas daarvan om langdurige probleme soos elite-ontvreemding, swak breëbasisimpak, en swaar administratiewe laste aan te spreek, voer die Stigting aan dat die voorstelle hierdie probleme waarskynlik sal verskans en verskerp.
“Suid-Afrika het nie nog beleidsmeganismes nodig wat belegging moeiliker, groei swakker, en nakoming duurder maak nie,” sê Malan. “Transformasie, ongeag hoe ‘n mens dit definieer, kan nie volhoubaar in ‘n stagnerende ekonomie bereik word nie. As beleid groei verminder, verminder dit uiteindelik die ruimte vir werklike en blywende bemagtiging.”
Alternatief
Terwyl die Stigting krities bly teenoor die beginsel wat die breër argitektuur van rasgebaseerde ekonomiese regulering onderlê, het dit konstruktiewe alternatiewe voorgestel vir die konsepmodel wat tans oorweeg word.
In plaas daarvan om die Transformasiefonds as ‘n effektief verpligte komponent binne die telkaart in te bed, beveel die FMF aan dat dit herstruktureer word as ‘n vrywillige, parallelle “top-up”-meganisme. Ingevolge hierdie benadering sal firmas vry wees om op ‘n diskresionêre basis by te dra tot die Fonds, en sulke bydraes kan tel as ‘n inkrementele verbetering aan SEB-erkenning sonder om aan subminimumvereistes of strawwe vir nie-deelname gekoppel te word.
Hierdie model sal die regs- en grondwetlike risiko’s verbonde aan die voorstel wesenlik verminder, terwyl dit ook aanspreeklikheid verbeter en besigheidsoutonomie behou. ‘n Vrywillige struktuur sal dit waarskynliker maak dat firmas deursigtigheid, meetbare uitkomste, en deeglike bestuur van die Fonds self sal vereis.
“Indien die Departement ernstig is daaroor om die transformasieraamwerk te verbeter, is daar beter maniere om dit te doen as om bydraes effektief deur die telkaart af te dwing,” sê Van Staden. “‘n Vrywillige en prestasiegebaseerde model sal grondwetlik meer verdedigbaar, ekonomies meer rasioneel, en meer geneig wees om opregte steun van firmas te verkry. As die Fonds werklik waardevol is, behoort firmas te kies om dit te ondersteun omdat dit werk, nie omdat die staat hulle daarin vasgekeer het nie.”
Hierdie kommentaar volg op die FMF en die Solidariteit Navorsingsinstituut (SNI) se mylpaalverslag van 2025, “The Costs of B-BBEE Compliance”, wat die beleid se verstommende ekonomiese las vir die eerste keer gekwantifiseer het. Die studie skat jaarlikse direkte nakomingskoste op R145-290 miljard – gelykstaande aan 2-4% van die BBP – met Eienaarskap en ESD wat elk R40-85 miljard bydra. Wanneer dinamiese effekte ingesluit word, het SEB die BBP-groei met 1,5-3% per jaar verminder en tot 192,000 poste per jaar gekos. Oor byna twee dekades oorskry die kumulatiewe remmingskrag R5 duisend miljard in verlore ekonomiese produksie.
Die FMF se kommentaar bou op hierdie bevindings om te waarsku teen die verdere verskansing van ‘n ondoeltreffende, rasgebaseerde raamwerk.
“Alhoewel ons nie in die besigheid is om slegte beleid goed te keur nie, het ons ‘n plig om te probeer verhoed dat slegte beleid nog slegter gemaak word,” sluit Malan af.
Die FMF het die DTIC versoek om die huidige konsep te heroorweeg en ernstig met alternatiewe benaderings in gesprek te tree wat meer in ooreenstemming is met die oppergesag van die reg, deeglike ekonomiese bestuur, en die langtermynbelange van alle Suid-Afrikaners.
Klik hier om die volledige kommentaar te lees.
Klik hier om die 2025 FMF-SNI-verslag te lees.
Einde.
