Government to ramp up transformation plans in South Africa: finance minister

 ·28 Apr 2022

The government’s efforts to address historical imbalances and promote transformation have effectively stalled since 2009, says finance minister Enoch Godongwana.

Addressing a Black Management Forum event this week, Godongwana said that this was due to state capture and a lack of political will.

“The latest report released by the Commission for Employment Equity for 2020-2021 paints a grim picture about the pace of transformation in the South African economy. The progress of Black Africans into top management positions averaged around 15% in the three years between 2018 and 2020.

“The representation of the Coloured and Indian populations remained at 5.7% and 10.6% respectively in 2020.  The white population dominates top management roles, accounting for nearly 65%. The case is much the same in senior management roles.”

Godongwana said this skewed representation, especially in an environment of economic stagnation, feeds into income and wealth inequality. He added that the lack of transformation and the knock-on effects of social instability threatens the country’s ‘national project of unity, reconciliation and prosperity for all’.

The finance minister said the government is working to remedy this situation by implementing progressive legislation and policies that seek to address weaknesses in the country’s economic framework.

“For instance, we have emphasised the need for localisation, and our Preferential Procurement Policy Framework Act (PPPFA) of 2000 is aimed at providing the incentive for government and businesses to procure from BEE certified suppliers.

“The ruling by the Constitutional Court in February this year; that certain aspects of the PPPFA Act are unlawful is a setback. We have since issued new regulations to the PPPFA for public comment. The PPPF Bill is now with Nedlac, and it is our intention to table the Procurement Bill before Parliament in June this year.

“We are committed to using all levers at our disposal, including legislation, to advance economic transformation.”

Stricter rules 

The government is also expected to move forward on its planned Employment Equity Amendment Bill in the coming months.

The bill will allow the Employment and Labour minister Thulas Nxesi to set employment equity targets for different business sectors. The minister can set targets for different occupational levels, sub-sectors or regions.

It also aims to reduce the regulatory burden on small businesses and add rules for doing business with the government.

The Department of Employment and Labour has previously indicated that it plans to introduce the new sector-specific equity rules in 2022.

Read: South Africa has a big shortage of these critical skills right now – and they are being poached to work overseas

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