What the B-BBEE sector codes reveal about South Africa’s real transformation progress
Enterprise and supplier development challenges highlight need for supported entrepreneurship, writes Mziwabantu Dayimani.
Public debate on broad-based BEE has become increasingly polarised. Some argue that it is burdensome, ineffective or hostile to business. At the National Empowerment Fund we hear these criticisms often.
However, much of this debate is taking place without considering what the broad-based BEE codes actually measure, and without that foundation the conversation quickly collapses into rhetoric rather than evidence-based analysis.
The B-BBEE codes of good practice are not a political slogan; they are a technical framework designed to shift South Africa from a highly concentrated economy toward one that is more dynamic, competitive, and owned by a broad base of those who live in it. Understanding what the codes actually measure is essential to engaging with them honestly.
The most recent national status and trends report from the B-BBEE Commission shows an economy that is transforming unevenly but meaningfully. Ownership has made the strongest and most consistent gains.
Achievement against sector targets rose by almost 15% from 2019 to 2022, with eight of the 10 large sectors making significant gains on their targets. This is clear evidence that equity participation is diversifying, not stagnating.
Management control—leadership pipelines, representation at executive levels and board composition—remains one of the most difficult areas, and critics are right that leadership transformation has been slow.
Yet even on this element, the 2022 achievement level of 58.4% is the highest recorded since 2017. It therefore becomes clear why structural challenges persist and why progress, though slow, remains significant.
Skills development, which measures the scale and quality of training investment, shows a similar upward trajectory. Average performance climbed from 36.8% in 2017 to 59.1% in 2022, reflecting real investments in training, learnerships, mentorships, and bursaries. These are not compliance exercises; they are investments in the talent pipeline the economy urgently needs.
The financial investment made by the government in institutions of higher learning, including the provision of free higher education, has resulted in an increase in the number of academically qualified talents.
There is a need to ensure that young people are assisted to thrive in the disciplines that assist the country to industrialise and innovate, but one cannot take away from the strides that are being made in the development of an educated society.
The country needs to remain focused on ensuring that this trend continues, and more opportunities should be created to expose the younger generation to international work opportunities so that we remain a developing and learning country.
The picture for enterprise and supplier development (ESD) is more complex. The 2022 average of 55% is almost unchanged from the six-year average, and inconsistent submissions make long-term trends difficult to interpret. Performance fluctuates year by year but appears to be stabilising.
Forestry and tourism came closest to meeting their sectoral targets, while construction lagged significantly. This unevenness highlights progress and the scale of work still required to build competitive black-owned SMEs. We must therefore not tire in working on initiatives that ensure we create an environment that enables entrepreneurship to thrive and be supported, such as the proposed Transformation Fund.
The road to realising this will not be for the faint-hearted, but we owe it to the future generation to ensure that they stand a chance of living in a society where opportunities can be accessed by all irrespective of race, gender, age, and background.
The architects of the Freedom Charter and our Constitution understood this reality, which is why they enshrined the fundamental right to equality in section 9 of the Constitution.
Substantive equality recognises that people do not start from the same position; it requires us to provide resources and support to those who lack them. This means we must pay particular attention to businesses in rural areas and townships, especially those owned by designated groups such as women, youth, and people with disabilities.
Socioeconomic development stands out for its strong performance, reaching 111% in 2022 compared with an 87% six-year average. Several sectors—forestry, integrated transport, and tourism—met their targets. But the commission rightly cautions that high spending does not automatically equal high impact, and deeper examination is needed to ensure interventions are truly advancing community development.
The transformation fund concept document states that it will serve as a vehicle equipped with tools to implement impactful, measurable developmental initiatives through a technological system, ensuring investments are tracked from source and reported throughout their lifecycle, including progress on intentional milestones.
Taken together, these trends are not ideological ambitions; they are economic fundamentals. A country cannot grow sustainably while the majority remain excluded from ownership, capital and opportunity. In this context, the transformation fund is designed to drive job creation and promote inclusive economic growth, ensuring that participation in the economy becomes a shared reality rather than a privilege.
Much of the anti-B-BBEE sentiment rests on misconceptions. One is the belief that empowerment is a zero-sum game when evidence shows that expanding participation strengthens demand, innovation, and supply chains. Another is that the codes benefit only a politically connected elite, even though their entire architecture channels investment into broad-based programmes such as skills, SMEs, communities, and rural development.
A third misconception is that B-BBEE deters investment when global investors consistently prioritise stability, talent depth, and functional markets. Many multinationals have come to view empowerment compliance as part of a credible long-term market strategy.
South Africa remains one of the most unequal societies in the world. Without a deliberate programme to counter structural exclusion, inequality will reproduce itself through entrenched ownership patterns and inherited networks. The codes may not be perfect, but they remain the most comprehensive instrument for widening access to opportunity at scale.
Calls to scrap B-BBEE are loud, emotive and empty of real solutions. They offer no credible alternative for building an inclusive economy.
What South Africa needs is less outrage and more honest, data-driven conversation. If we stay anchored in evidence rather than ideology, we can refine the framework, strengthen its application, and ensure B-BBEE keeps evolving with the economy it is meant to transform.
Mziwabantu Dayimani is CEO of the National Empowerment Fund.
