Cosatu defends B-BBEE policy amid criticism from Solidarity and FMF

THE battle for the scrapping of "race laws" in South Africa went a notch up on Thursday as the Congress of South African Trade Unions (COSATU) shot down a call to review and drop South Africa's Broad-Based Black Economic Empowerment (B-BBEE) policy.

- BANELE GININDZA

This comes as trade union Solidarity and the Free Market Foundation (FMF) on Thursday released a report claiming that B-BBEE has caused serious damage to the country's economy and to its population while only enriching a small, politically-connected elite.

The report draws on data from the B-BBEE Commission, Stats SA, the JSE, and international comparisons to assess the real costs of compliance across the key BEE scorecard elements: ownership, skills development, enterprise and supplier development, management control, and socio-economic development.

According to the report, the annual cost of BEE compliance is between R145 billion and R290bn per year. It claimed that this has resulted in an annual reduction of 1.5% to 3% in economic growth, and to an annual loss of between 96 000 and 192 000 jobs.

"Our findings show that BEE, as currently designed, is enriching a small elite while throttling economic dynamism and deepening unemployment," said Dr Morné Malan, FMF senior associate and co-author of the report, speaking at the joint press conference.

The study compares South Africa's model with global "affirmative action" policies in Malaysia, India, Brazil, the US, and Namibia, showing that South Africa's version is the most intrusive and economically damaging.