Abstracts

22 corruption in the South African economy. In theory, BEE seeks to create a virtuous cycle in which transformation naturally permeates throughout education, work, living conditions, and the overall economy. Unfortunately, inefficiencies and corruption threaten the successful implementation of this cycle and exacerbate the exact problem BEE seeks to address. BEE aims to solve a complex problem; consequently, it requires an equally complex, multifaceted approach. In its utopian form, BEE would right the wrongs of apartheid by providing equal opportunities and empowerment to all peoples of South Africa. In reality, the path of BEE has been molded and deformed by sociopolitical agendas and narrow codifications and guidelines. While these limitations may seem to belittle the higher goal at hand, they also suggest a more attainable and measurable form of transformation. Through its formation and various iterations, BBE has taken on different meanings to different people, businesses, and government entities. Macroeconomic Analysis of Broad- Based Black Economic Empowerment Given the broad and unspecified nature of the BEE phenomenon, the scope of analysis is narrowed to the BBBEE Act. The successes and inefficiencies of BBBEE are intrinsically linked to the complex cyclical issues plaguing South Africa’s overall economy. When BBBEE was updated in 2013, South Africa’s GDP growth rate stood at 2.49%. Since then it has decreased to a dismal 0.79% in 2018, placing South Africa at a ranking of 169 in the world (World Bank, 2018a). This is a negative indicator of the economy’s ability to effectively support the transformation proposed by BBBEE. Since the inception of BEE there has been tension between the pursuit of growth and the pursuit of equality. South Africa’s ability to deliver economic transformation is complicated by a high unemployment rate of 29.1% in 2019, an increase from 24.6% in 2013 (RSA, 2019b, p. 21; World Bank, 2018b). BBBEE seeks to economically empower all black people by “achieving equitable representation in all occupational categories and levels in the workforce” (RSA, 2014, Section 1). At the nominal level, these goals require equal employment of black South Africans compared to other population groups. Unfortunately, black South Africans consistently bear a higher unemployment rate than white South Africans. In 2019, the unemployment rate for each population group was 32.8% African/ black, 23.5% colored, 13.3% Indian/Asian, and 7.4% white (RSA, 2019b, p. 21). To be successful BBBEE requires an increase in the employment rate and economic growth to provide opportunities to HDSAs. Governance As part of BBBEE Act 46, the BBBEE Commission, a member of the DTI group, was established to oversee and report on adherence to that act while maintaining governance and promoting the overall transformation goal of BBBEE (RSA, 2014). As part of the commission’s duties, it releases annual research reports on the transformation progress titled National Status and Trends on Broad Based Black Economic Empowerment Report. The most recent report details the transformation from 2017 to 2018 in terms of adherence to the Code of Good Practice. The report also provides data and analysis of performance for each code on the scoring card. In terms of ownership trends, large entities and qualifying small enterprises reported stronger black ownership within the construction and transport sectors, while the agricultural sector reported the lowest levels of ownership, largely attributed to land ownership barriers (B-BBEE Commission, 2019). Skills development improved by 39%, but there are no data to verify the correlation between this statistic and improvement in skilled people accessing the job market. Overall, about half of Johannesburg Stock Exchange–listed entities met BBBEE scorecard elements across sectors (B-BBEE Commission, 2019). A major theme throughout the report was the lack of compliance by entities when reporting on and implementing BBBEE practices in their businesses. This directly relates to stagnant transformation and less than optimal performance as a result of inadequate governance. The World Bank defines governance as “the manner in which power is exercised in