From Alchemy to Ashes: How B-BBEE exposed the illusion of economic promise

For nearly three decades, Broad-Based Black Economic Empowerment (“B-BBEE”) or just BEE, was treated as morally untouchable. To question it was to question justice itself. Support for BEE signalled virtue, while opposition carried the stain of racism. As a result, meaningful debate rarely reached the merits of the policy. It was wrapped in history, insulated by moral pressure, and protected from scrutiny by the accusation that disagreement itself was unethical. That protection, however, proved far more enduring than its results.

BEE did not fail because it was misunderstood or poorly implemented. It failed because it rested on a flawed assumption: that equality or wealth can be politically engineered rather than economically created. While it used the language of upliftment and inclusion, its practical effect was to institutionalise patronage, concentrating benefits among the politically connected while leaving millions of South Africans excluded from work.

This article is not concerned with slogans or intentions, both of which are easily reshaped. It is concerned with outcomes. And once those outcomes are examined honestly, the contrast between promise and reality becomes impossible to ignore.

ECONOMIC ALCHEMY AND THE PRICE OF BLIND BELIEF

History offers more than one warning about policies that promise prosperity without discipline. In the late sixteenth century, Venice (once a dominant commercial power) found itself in decline. Trade routes had shifted, state revenues had weakened, and political leaders were under pressure to deliver solutions.

It was in this moment that Marco Bragadino arrived, claiming the ancient skill of alchemy: the ability to turn base metal into gold. He did not call for painful, timely reforms or economic restraint. He promised miracles. All Venice needed, he said, was patience and faith in the process. The state rewarded him generously, providing a palace, servants, and unlimited resources.

Furnaces burned, rituals were performed, and progress was always declared imminent. But, as you probably guessed, the gold never appeared. By the time Bragadino was exposed and executed, Venice had lost years of opportunity and large sums of public money. The cost of believing in economic magic proved far greater than the cost of accepting uncomfortable reality.

That lesson gives the story its modern relevance. In South Africa, the ANC has played the part of Bragadino and BEE has served as the alchemy. Political formulas were elevated above productivity, while paper compliance replaced real economic fundamentals. Faith was demanded, doubt was discouraged, and results were permanently postponed. The pattern is not incidental, it is structural, and its consequences are now impossible to ignore.

WHEN THE NUMBERS REPLACE THE NARRATIVE

South Africans are not short of statistics. We encounter them daily by scrolling past them between load-shedding schedules and crime reports. Billions here, millions there. Over time, repetition produces its own anaesthetic. Numbers stop shocking not because they are small, but because they are familiar. This is how failure becomes normalised.

Set out plainly, we are so desensitized the figures barely register:

Economists estimate that BEE compliance costs and related inefficiencies shave between 1.5% and 3% off South Africa’s GDP every single year. That amounts to roughly R150 to R300 billion annually.

Written like that, it sounds technical and just another number we are so used to see on a daily basis. So, it helps to slow it down…

R300 billion a year amounts to about R25 billion a month, or more than R800 million every day. Every sunrise, before Parliament convenes or a single tender is issued, that is the scale of economic value quietly erased. No strike, no natural disaster, no foreign invasion, just policy doing its work.

At that magnitude, “lost growth” stops being an abstraction. R300 billion is enough to build more than two million basic homes, finance free tertiary education for an entire generation, or pave roughly 150 000 kilometres of road (enough tar to resurface every major highway from Johannesburg to Cairo and back). If stacked in R200 notes, it would rise about 150 kilometres into the sky, just short of halfway to the International Space Station.

This is the value that disappears annually into compliance burdens, distorted incentives, and transactions that look transformational on paper and evaporate in practice. Over a decade, this is not a leak. It is a flood.

WHEN THE COST BECOMES HUMAN

Unemployment gives this arithmetic a human face. Overall joblessness stands at roughly 32.9%, with youth unemployment near 45%. These numbers are often quoted, rarely absorbed.

So, it helps to slow them down again. In plain terms, almost half of young South Africans who want to work cannot. If the unemployed were asked to stand in a line, it would include every resident of Johannesburg, Cape Town, and Durban combined. It would be a very long line. Even at the height of the Great Depression, unemployment in the United States peaked at 24%, while Germany reached roughly 30–35% in the early 1930s before Hitler’s mass mobilisation. South Africa has managed worse in peacetime.

This is no coincidence. When an economy bleeds hundreds of billions of rand in productive potential every year, the labour market responds with grim regularity. Each lost percentage point of growth becomes another cohort entering adulthood with little to add to a CV except patience. What begins as an accounting issue ends as a generational one.

THE MOMENT ILLUSION MEETS REALITY

Public perception increasingly reflects the widening gap between promise and experience. A 2023 Social Research Foundation survey found that only 19% of black South Africans believe BEE has improved their lives, while 63% say it primarily benefits politicians and their associates. When a policy loses credibility among those it claims to empower, denial stops being persuasive and becomes evasive.

No illusion survives indefinitely. Economic reality asserts itself with time, and societies eventually withdraw belief from systems that demand loyalty without producing results. No country has ever legislated itself into prosperity.

BEE was presented as empowerment, but in practice it functioned as illusion. Like alchemy, it promised gold without effort and transformation without production. The furnaces have burned for thirty years. The rituals are familiar. The gold never arrived. South Africa now faces a choice that can no longer be deferred: continue sustaining the fantasy, or abandon it in favour of economic reality.

There is no shortcut to prosperity. There is no moral exemption from arithmetic. The only empowerment that endures is earned, not engineered.