Darren Parker | March 4, 2025
In response to the World Bank's recent recommendation that South Africa relaxes the increasingly strict and highly normative broad Black Economic Empowerment (BBBEE) laws to attract greater private sector investments in the country, Gregory Mofoken, executive member of the Charter Council of Construction (CSCC), simply says “no.”
Speaking at Build Environment Indava in Sandton on March 4, he told investors that if they want to invest in South Africa they have to accept Bbbee or take money elsewhere.
However, at the same event, Bbbee supporters condemned the lack of investment in the built environment sector, among other sectors of the economy, claiming that moral grandeurs standouts would not create jobs.
“Without investment, no country has infrastructure development. It's so easy. We can talk as much as we want. We meet the government ministers every day, have good discussions, leave meetings impressed each other and we say we will definitely go somewhere. But without capital support, nothing will happen,” said Bafana Dube, Vice President of Black Business Council (BBCBE) at Build Environment (BBCBE).
It should be noted that for the context, many foreign private sector investors complain that South Africa's BBBEE policy is a dislike for the favorable foreign investment environment. The World Bank is just the latest example.
In 2018, the EU expressed its reservations on BBBEE ownership rules in South Africa, deeming them “unfairly troublesome.” As a condition for increasing investment, the EU has called for relaxation of these rules, indicating that strict requirements can block potential investors.
There have also been cases in which foreign investors have resorted to international arbitration, claiming that South Africa's BBBEE policy violated the bilateral investment treaty.
Italian investors, for example, filed a lawsuit in 2007, citing violations related to these empowerment initiatives.
Famously, in February, billionaire businessman Tesla and Starlink owner and CEO Elon Musk was born and raised in South Africa – expressed interest in launching Starlink domestically, saying he is “waiting regulatory approval” after implementing a successful launch in neighbouring countries.
The StarLink project would have brought low-cost high-speed internet access to all South Africans. This has been particularly beneficial for rural and underserved areas that lack reliable ground infrastructure.
However, he disagreed with the local ownership requirements that must be met.
In many other African countries, Starlink has established itself as a cost-effective alternative to existing internet providers. In Ghana, for example, its services are reportedly half the price of a major local internet service provider, making high-speed internet more accessible with a larger population.
Additionally, on February 6th, Musk's SpaceX officially withdrew from a regulatory hearing led by South Africa's Independent Communications Agency for similar reasons.
There are many other examples of investors who have been hindering business with South Africa due to the country's strict racially-based economic policies that seek to correct the historic economic injustice committed over 30 years ago.
“Thirty years after democracy, we're not there yet. The question is where we're going to fail, because we have a pro-black government. There are black officials. Danny Masimene, president of BBCBE, said.
Mofokeng argued that further transformation of the built environmental industry was needed, but he acknowledged that he had no idea whether this was actually achieved or not, as his organization had not provided a report on the progress of industry transformation since 2021.
“The last industry report we created was 2021. We are supposed to produce these reports every year so that we can all measure our efforts as far as change is concerned. As I sit here today, the last report we can refer to is a report created in 2021. We need to get the most up-to-date report so that we can measure ourselves,” he admitted.
He condemned the lack of adequate reporting of lack of funding from the government.
“The biggest challenge facing the CSCC at the moment is lack of funding from the government. We proposed a unique, self-funding model for industry funding. We also submitted it to both the Ministry of Public Works and Infrastructure (DPWI) and the Ministry of Trade, Industry and Competition (DTIC). DTIC has approved. We are now waiting for the approval of the DPWI,” Mofokeng said.
Thabo Masombuka, chairman of the Bureau of Construction Education and Training, agreed that the progress of change in the construction environment is insufficient.
He acknowledged that there is likely more progress made than powerful people would like to acknowledge, especially in the economy.
Currently, South African statistics show that in the fourth quarter of last year, youth unemployment rates were 59.6% for job seekers aged 15 to 24 across all races.
“We have approved a very comprehensive and detailed Track and Tracer study to give stocks the amount spent on young people over the past decade. Where are these young people now?
“To know where we are going, we need to know where we are coming from and we can fix it. Sometimes we get too hard on ourselves. We are probably making progress, but we're not tracking this issue,” Masombuka said.
However, he acknowledged that the obvious failure that did not bring about real economic change after more than 20 years of BBBEE Act was implemented is no longer quite a result of racism.
“It's not about white people anymore. 32 years after democracy, it's not about white people anymore. If we're not moving into this country, if we're not moving forward, it's not about white people. It's about black people occupying the position of (power) but they're making it very difficult. We're not achieving anything,” Masombuka said.
However, Mofokeng argued that anyone who criticized Bbbee and its failure for a meaningful transformation is involved in misinformation and lies.
“The opponents of transformation are grouping and strengthening. The opponents of transformation are fighting. They push back. They are not only affecting the International Monetary Fund (and the World Bank), but they are lobbying the US, lobbying superpowers to isolate South Africa, known as hostile policies that seem to discriminate against certain groups. They are using distortions, misinformation, lies, and false characteristics,” says Mofokeng.
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
