Identifying weaknesses Broad-based black economic empowerment The broad-based black economic-empowerment (BBBEE) policy, which aims to increase the participation of black people in the management, ownership and control of South Africa’s economy, is viewed by many as a barrier to entry and a disincentive to foreign investment. The Act and associated codes of good practice require levels of company ownership and participation by black South Africans, if inter alia a company is to get bidding preferences on government tenders and contracts. It is acknowledged that multinationals have global practices, which make it difficult for them to comply with the ownership element of BBBEE through the sale of shares to black South Africans. In this instance, the Department of Trade, Industry and Competition has created an alternative equity equivalence programme for multinational or foreign-owned companies to allow for them to score on the ownership requirements. Many, however, view the terms as onerous and restrictive. Changing of goalposts is also a concern – as it results in uncertainty among investors and potential investors. It is argued that if black economic-empowerment requirements are removed or made easier and more certain, then it is likely that poorer South Africans could benefit more by ensuring that the country achieves higher economic growth and job creation by attracting more FDI.
Corruption and declining State capacity South Africa continues to grapple with corruption, eroding public trust and weakening of the State’s capability to deliver services. Transparency International’s Corruption Perception Index (CPI), which ranks countries and territories by their perceived levels of public-sector corruption, scores South Africa at 44 points on a scale where zero is ‘highly corrupt’ and 100 is ‘very clean’. This compares with Botswana’s CPI score of 60. In terms of the 180 countries analysed, South Africa is ranked sixty-nineth, Botswana (35), Namibia (57), Lesotho (83), Zambia (117), Mozambique (149) and Zimbabwe (157) (Transparency International, 2021).
“State capture – systematic political corruption in which private interests influence the State’s decision-making”
The most common types of corruption include maladministration, procurement corruption and abuse of authority (Corruption Watch, 2021). State capture – a type of systematic political corruption in which private interests influence the State’s decision-making – became synonymous with Jacob Zuma’s Presidency. President Cyril Ramaphosa has denounced corruption since assuming office in February 2018 and has vowed to tackle the scourge at all levels of government. South Africans, however, believe corruption has continued during the tenure of Ramaphosa, despite his Presidency’s anticorruption efforts. Large
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