President Cyril Ramaphosa has come out strongly in defense of South Africa’s transformation laws which have become subject of contestation including within the Government of National Unity.
The Democratic Alliance is currently pursuing several cases in court against transformative laws that it claims among others discourage investment and in the case of the National Health Insurance which it claims will collapse the country’s private healthcare sector.
Other concerns raised was the requirement for foreign investors to allocate a stake to a local firms in line with the country’s Broad Based Black Economic Empowerment policy and Ramaphosa has dismissed the apprehension.
The president said in his weekly letter to the nation that reducing BBBEE to the shareholding aspect is simplistic as there’s various other ways of complying such as equity investment in public infrastructure. He said the need for redress could not be over emphasised.
“Amongst the most salient features of our country’s empowerment laws are their practicality, feasibility and responsiveness to economic conditions without deviating from the objective of redressing the economic injustices of exclusion of the past. This stems from the need to meet two separate but interdependent objectives. The first is to achieve substantial change in the racial composition of ownership, control and management of the economy to overcome a history of exclusion,” said Ramaphosa.
Ramaphosa said local and foreign private sector players are all expected to comply with the law with no exceptions.
” The Broad-Based Black Economic Empowerment legal framework applies to all companies wishing to invest in and do business in our economy, whether they are local or foreign,” said Ramaphosa.
Criticism of South Africa’s transformation laws has led to some level of retaliation by the government of the United States of America incited by rightwing groups such as Afri-forum and Trade Union Solidarity ( backed by the Democratic Alliance and the Freedom Front +) which ran a well funded misinformation campaign alleging that among others a genocide against white South Africans was being carried out with the support of the government which he also accused of enabling land grabs.
Ramaphosa said South Africa was being singled out unfairly as redressing past injustices was an inevitable intervention that’s being practised across the world.
” Empowerment laws are not unique to South Africa. These laws are often referred to as indigenisation or localisation measures. They exist in various forms in other emerging market economies with similar histories of race-based economic exclusion such as India, Zambia, Indonesia, Nigeria, Malaysia and Brazil.
A number of these jurisdictions compel foreign investors or multinationals who wish to invest in the economies of those countries or in certain sectors of their economy to fully set aside equity stakes in their companies to local entities as a prerequisite for operating in the country,” said the president.
Ramaphosa has meanwhile remained steadfast in the face of threats of a motion of no confidence by the DA following his removal of its Eastern Cape leader Andrew Whitefield as the deputy minister of trade and industry. The DA has since halted the planned motion and is also widely expected to stay within the GNU despite opposition to the transformation agenda.
The government has also come under criticism from left-leaning political parties in South Africa who have claimed that it was bending over backwards to accommodate SA-born tech tycoon Elon Musk who has also been part of the misinformation campaign. The president said the government has previously offered flexible arrangements to other multinationals seeking to invest in South Africa and denied that being overly accommodative of Musk.
“Some in the public space have recently sought to suggest that the EEIP represents a circumvention of B-BBEE laws -and that it is a response to the conditions of a particular company or sector.
Neither are factually correct. Firstly the EEIP is not new and has been in existence for a decade.
It is firmly embedded in our laws and is not a an attempt to ‘water down’ B-BBEE.
Secondly there are stringent requirements for multinationals to participate.
All EEIP initiatives must be aligned to government’s economic policies and strategic goals.
There is firm government-backed oversight over EEIP programmes that must be broad-based in terms of impact.
Since its inception, the EEIP has encompassed a broad range of sectors and onboarded some of the world’s leading multinational firms such as Hewlett-Packard, Samsung, JP Morgan, Amazon, IBM and automotive firms such as BMW, Volkswagen, Nissan and Toyota,” said the president.