Despite decades of transformation policy, South Africa’s corporate leadership remains overwhelmingly white and male. As the ANC and DA clash in court over the Employment Equity Act, the deeper question remains: why is real change still so elusive?
At the dawn of democracy, economic power in South Africa remained firmly in white hands, despite the fall of apartheid. The ruling ANC adopted black economic empowerment (BEE) as a policy to change that.
Initially focused on ownership, often via high-stakes equity deals in established companies, the early BEE framework faced criticism for favouring a politically connected elite and often collapsing under financial stress.
The path to BEE was shaped by significant ideological shifts in the ANC. Although the Freedom Charter had called for sharing the nation’s wealth, some perspectives suggest that BEE ultimately emerged as a “consolation prize” for the ANC’s abandonment of more radical socialist policies such as nationalisation.
These shifts followed Nelson Mandela’s pivotal 1992 visit to the World Economic Forum annual meeting in Davos, where the future South African leadership was exposed to market-oriented global economic thinking, and warned to avoid the fate of isolated economies such as Cuba and North Korea.
Oddly, while the policy is maligned by business now, BEE has its roots in corporate South Africa, with Anglo American pioneering early empowerment deals. These initiatives later evolved into a cornerstone policy instrument, initially focused on “deracialising business ownership and control”, as outlined in the ANC’s Reconstruction and Development Programme.
The early iterations primarily targeted increasing black ownership stakes in established white-owned companies through equity transactions, often using complex, leveraged financing structures that proved vulnerable during financial downturns.
A long and winding road
By 2003, the government had introduced the Broad-Based Black Economic Empowerment (B-BBEE) Act. The shift from narrow BEE (focused on ownership deals) to broad-based BEE aligned with Thabo Mbeki’s economic policy agenda, which was shaped by market-friendly, growth-oriented reforms, with the accompanying B-BBEE scorecard adding dimensions such as employment equity, skills development and preferential procurement.
Despite these frameworks, progress in transforming South Africa’s labour market has been uneven. Although overall employment rose significantly from 1994 to 2024, with black South Africans accounting for the largest increase in total employment (from about 63% in 1994 to about 73% in 2014), their advancement into higher-skill occupations has been “frustratingly limited”.
Their representation in skilled occupations increased only marginally from 15% in 1994 to 18% by 2014, while skilled employment among white and Indian/Asian groups expanded significantly – a 26% increase – during the same period.
This trend continued into the 2023 data, where the Indian population group’s representation in skilled occupations and top or senior management exceeded their proportion of the economically active population (EAP), which is 2.6%. They have disproportionate representation in top management (11.6%) and senior management (12.4%).
Source: 24th Commission for Employment Equity (CEE) Annual Report (2023-2024); Illustration: Vecteezy
The public sector has been a beacon of the potential effectiveness of aggressively enforced BEE policies with more than 80% of public sector employees, including senior management, being black. The private sector has lagged behind significantly, suggesting that without strong enforcement mechanisms and clear incentives, transformation remains superficial – a pattern that has persisted during the 26 years since the Employment Equity Act was put into effect.
Sharper teeth and harder targets
The Employment Equity Amendment Act of 2022, which came into effect with accompanying regulations on 15 April 2025, is the ANC government’s latest attempt to accelerate this stalled transformation.
The amendments empower the Minister of Employment and Labour to set numerical targets for equitable representation of designated groups across all occupational levels after consulting relevant sectors and with advice from the Commission for Employment Equity.
Lara Jansen van Rensburg, partner at Eversheds Sutherland, explained: “The Employment Equity Amendment Act is designed to drive meaningful transformation by enforcing sector-specific numerical targets. These quotas ensure that designated groups are adequately represented, moving beyond voluntary compliance.”
However, she warned that the conflicting draft regulations filed in May 2023 and February 2024 have created uncertainty and that “businesses must remain flexible in their employment equity planning”. This uncertainty was addressed in the final regulations, but the early confusion did reduce confidence.
Slow transformation
Despite decades of employment equity efforts, the 24th annual report of the Commission for Employment Equity revealed that transformation in corporate South Africa remains slow, and white men still dominate top management.
The data shows that 62.1% of these management roles are occupied by white individuals, despite them making up a much smaller proportion of the EAP (7.7% of all working-age South Africans). Additionally, 73.1% of top management positions are held by men, which points to persistent gender imbalance in leadership.
Although there has been some progress in increasing representation of designated groups, the pace remains slow in the private sector.
To remedy this, the Employment Equity Regulations, 2025, which replaced the 2014 regulations, introduce what analysts describe as “a significantly more prescriptive and compliance-driven framework” for designated employers – those with 50 or more employees.
Central to these reforms is the accompanying sectoral numerical targets, which introduce prescriptive goals for 18 key sectors over the next five years.
“The new Employment Equity Regulations … introduce sector-specific numerical targets for designated groups in South Africa, including the construction sector,” Thembeka Mnisi, president of South African Women in Construction, explained to Daily Maverick.
“These targets aim to increase the representation of black people, women and individuals with disabilities in the workforce, particularly in upper occupational levels.”
One major shift is the elevation of targets for people with disabilities from 2% to 3%.
In construction, the goal is that 65.2% of professionally qualified employees will be African by 2030.
Designated employers will have to align their employment equity (EE) plans with these sectoral targets or face potential fines, compliance orders and exclusion from doing business with the state.
Importantly, the legislation insists these are not rigid quotas. “Designated employers can set their own targets in their EE plans and justify failure to meet them on reasonable grounds,” said Nomakhosazana Meth, the minister of employment and labour.
Technical skills, not degrees
The implementation of these policies continues to face substantial challenges. Deep structural inequalities, economic sluggishness and deficiencies in the education system sustain a difficult environment for meaningful transformation.
Despite the increased overall employment of black South Africans, their movement into higher-skilled occupations remains limited, and the private sector is particularly resistant to change compared with the public sector. High youth unemployment, especially among young black South Africans, persists as a significant concern.
Stats SA graphic of unemployment according to population groups
Transformation, though, is not only a numbers game – and in the real economy, skills shortages may matter more than demographics.
“Degrees alone won’t save South Africa’s economy,” warned Yershen Pillay, CEO of the Chemical Industries Education and Training Authority (Chieta). “Skills will.”
Pillay laments the “mismatch between the skills our economy needs and the qualifications we continue to produce”.
In a nation hurtling into a future defined by artificial intelligence, green energy and advanced manufacturing, technical competence is the missing link.
Chieta’s model, which includes decentralised trade test sites and Smart Skills Centres, is trying to close the gap.
“We are preparing South Africa’s youth for the industries of tomorrow,” Pillay said, advocating a national pivot towards artisanship and innovation over outdated academic credentials.
While industry leaders call for agility, the DA is challenging the new framework in court, arguing that the targets constitute rigid quotas and threaten both fairness and constitutional order.
The DA’s lawyer, Ismail Jamie, described the regulations as “totalitarian” and creating “an absolute barrier” to employment based on birth. The party maintains that the previous version of the act was preferable: employer-led, context-sensitive and explicitly against quotas.
Quotas by another name?
There is a critical mismatch between the skills the economy needs and the qualifications being produced, highlighting the urgent need for investment in skills development aligned with market requirements.
The regulatory framework has also raised concerns among businesses about compliance burdens, although smaller companies employing fewer than 50 people were ultimately excluded from reporting requirements, in the wake of opposition.
Critics have also pointed to instances where BEE implementation has facilitated “elite capture” rather than broad-based empowerment, with practices such as “fronting” and “tenderpreneurship” undermining genuine transformation and fostering public cynicism.
A key element of the DA’s challenge focuses on the potential impact of applying national targets at the provincial level.
The party’s federal executive chair, Helen Zille, has argued that imposing national demographic targets without considering provincial variations would be “manifestly unfair” to minority groups, citing examples such as Indians in KwaZulu-Natal and coloured people in the Western Cape, who might face reduced access to employment.
There is also an insistence that the legislation should have followed the Section 76 process of the Constitution, which is designed to safeguard provincial interests.
In response, advocate Fana Nalane, representing the minister, has countered that the court’s focus should be on whether Section 15A of the act itself is constitutional, not on hypothetical implementation scenarios or the potential impact on individuals moving between provinces.
The minister also rebuffed these claims in a statement given to Daily Maverick: “The DA’s challenge seeks to disrupt efforts aimed at achieving equitable representation and maintaining the inherently unfair status quo,” said Meth.
“By opposing these amendments, the DA is actively sabotaging the transformation goals that have been pursued since the end of the apartheid era, effectively hindering progress towards equality and fairness in
the workplace.
“This stance is not only anti-transformation, but also a step backward in the fight for equality and fairness in the workplace.”
Meth defended her authority to set numerical targets, emphasising that this power is exercised only after consulting relevant sectors and the Commission for Employment Equity, ensuring she does not act arbitrarily and remains within the act’s framework.
A dose of reality
What emerges from this policy clash is a tension between two competing visions of fairness: one grounded in redress for historical injustice, the other in procedural equity and individual rights.
But even beyond the ideological divide, transformation is slowed by deeper challenges – a sluggish economy, a broken education system and systemic inequality.
What remains clear is that despite three decades of policy interventions, the transformation of South Africa’s economic landscape remains incomplete.
For advocates of the new rules, the hope is that clear targets – if implemented flexibly and fairly – can finally break the inertia.
For opponents, the fear is that rigid state intervention may simply replace one injustice with another.
In the meantime, young South Africans wait – many unemployed, most under-skilled, all looking for something the law alone can’t deliver: a future that works.
As the legal challenge moves through the courts, policymakers and business leaders alike face the challenge of better integrating B-BBEE policy with broader economic strategies to ensure truly inclusive, broad-based economic growth. It’s a goal that remains as urgent today as it was at the dawn of South Africa’s democracy.
Lindsey Schutters. This article first appeared on Daily Maverick.
