Professor William Gumede argues that those who have become ultra-wealthy through BEE don’t spend their money on uplifting poorer black citizens.

Gumede shared his view on black economic empowerment (BEE) and its impact on South Africa during a discussion with The Truth Report.

Gumede is an associate professor at the University of Witwatersrand’s School of Governance.

He is also the founder and executive chairperson of Democracy Works Foundation and the founder of the Institute for Social Dialogue.

He is one of South Africa’s foremost political and economic experts, having won numerous awards in both South Africa and internationally.

Gumede has been following and researching black economic empowerment since its early days in the nineties, making him an expert in the field.

The African National Congress (ANC) argues that BEE is needed to transform the South African economy by redressing the structural inequalities left by apartheid.

However, BEE is widely criticised, including by Gumede, for benefiting only a small black elite who are politically connected. However, the ANC says it is broad-based.

Gumede’s research has concluded that the policy has largely failed to achieve broad-based transformation in South Africa.

Commissioned by the government to assess BEE, his findings highlight that it has primarily benefited a small elite rather than the wider black population.

Gumede’s key research finding is that, conservatively, over R1 trillion has been transferred through BEE deals since 1994 to fewer than 100 politically connected individuals, often linked to the ANC and trade unions.

These same people are repeatedly “empowered and re-empowered” via recycled deals, creating what he describes as “political capitalists” who gain wealth through connections rather than genuine entrepreneurship.

In sectors like mining, he notes 47 connected individuals became multi-billionaires.

He argues this narrow focus has fostered corruption, with companies formed mainly to secure contracts or tenders, while excluding genuine, non-connected black entrepreneurs.

Gumede contends BEE has contributed to increased poverty, unemployment, and inequality by prioritizing share transfers in existing firms over creating new industries, jobs, or inclusive growth.

He contrasts it with successful global models that empower wider groups through education, broad ownership (e.g., employee/community trusts), or export-led strategies.

In the current political landscape, the intention and future of BEE have become central points of debate within South Africa’s Government of National Unity (GNU).

While the ANC maintains that the policy is a good path to justice, some of its partners, particularly the Democratic Alliance (DA), are pushing for a radical shift.

Some business groups and opposition parties claim BEE compliance costs deter foreign investment and stifle small business growth due to red tape.

The ultra-rich BEE beneficiaries have not been philanthropic

Professor William Gumede

Professor William Gumede told The Truth Report that the black oligarchs, who benefited tremendously from BEE, have not been philanthropic.

“They have not distributed their wealth. They have not trained black people,” Gumede told podcast host Rob Hersov.

“They’ve not put money into black education or into black housing. They have not developed black skills or funded civil society initiatives.”

They have also not used their wealth to fund and build an independent media, which is important for a democratic society, said Gumede.

Gumede added that the ultra-wealthy BEE beneficiaries haven’t done anything for reconstruction and rebuilding the nation.

They have not used their resources to transfer skills to other black South Africans or to build black infrastructure and provide housing.

They did not use the money they made through BEE deals to strengthen education or for strengthening civil society, their community, or black community groups.

This is despite getting easy money. “They’ve got money for absolutely no merit, but they have not made any contributions to the black cause,” Gumede said.

“They have not helped black people, on whose behalf they got this money.”
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