Another report on costs puts BEE in the firing line

Another report on the excessive costs of Black Economic Empowerment (BEE) highlights that the time has come for workable alternatives to BEE in South Africa.

Solidarity welcomes all research on the impact of BEE and particularly notes the latest report by Codera Analytics and XA Global Trade Advisors.

According to Theuns du Buisson, economic researcher at the Solidarity Research Institute (SRI), it is encouraging that other independent institutions and research groups are also realising the seriousness of this destructive policy and are starting to analyse it.

He believes that critical discussions about BEE have been considered taboo by analysts and policymakers for too long.

This report analysed the experiences of 126 businesses with BEE and found that BEE compliance costs firms between 0,4% and 4% of turnover.

This is followed by annual sustained costs of between 1% and 1,5% of turnover or between 6,35% and 32% of net profit after tax. This research found that some companies spend as much as three times their net profit after tax on BEE compliance.

“This is consistent with research that the Solidarity Research Institute conducted in 2025 in collaboration with the Free Market Foundation.

“This found that BEE compliance costs limit the country’s economic growth potential by between 2% and 4% annually,” says Du Buisson.

The Codera report further states that more than two-thirds of firms in their research indicated that they see no value in moving to a higher BEE level, especially when the high cost of such an upgrade is taken into account.

Moreover, only 4% indicated that they believe BEE creates new jobs, while 35% indicated that it reduces jobs. Approximately half of the respondents indicated that BEE compliance reduces investments.

Du Buisson describes this as a shocking statistic.

“Investment by black shareholders is, after all, at the core of what BEE seeks to achieve. If it reduces such investments, does not create jobs and does not bring any significant benefits to businesses, we really need to ask why it still exists at all.

“It is time for BEE to be scrapped in all its forms,” says Du Buisson.

The report’s focus on how spending on other, more important, priorities has decreased is something that Du Buisson particularly notes.

“For example, the report shows that research and development receives much less funding than in the past. The result is that businesses are not innovating or growing.”

Solidarity hopes that other institutions will also research the consequences of BEE and join the conversation to find alternatives that truly empower the people of South Africa, without placing businesses under pressure.

See the Solidarity BEE report here. See Solidariteit’s roadmap to a race-free South Africa by 2030 here. See Codera Analytics and XA Global Trade Advisors’ report here.