South Africa's Push for Stricter Enforcement of Black Economic Empowerment

South Africa plans to introduce additional incentives and potential fines to enhance corporate participation in Black economic empowerment. Despite the system, initiated in 2003, aiming to address racial inequality and high unemployment among Black people, it faces criticism for being ineffective and exploited by companies. The government aims to amend the law to ensure better compliance and genuine upliftment of Black people.

South Africa is set to introduce new incentives and potential fines to bolster corporate involvement in Black economic empowerment. The programme, launched in 2003, was designed to mitigate racial inequality, but has faced criticism for its ineffective implementation and exploitation by companies.

The African National Congress, which lost its parliamentary majority in the recent elections, faces mounting pressure to address the persistent disparities left by apartheid-era policies. The empowerment scheme uses a scorecard system to reward companies for hiring and promoting Black people with tax breaks and access to government contracts.

However, the voluntary nature of the programme has led to manipulation, with some firms inflating their scores through fraudulent practices. Authorities are now focused on ensuring genuine compliance while contemplating fines for non-submission and more rigorous oversight. The goal is to shift emphasis from mere ownership to substantial skills development and enterprise growth.

(With inputs from agencies.)