Slow transformation undermines equality, Tau warns as SA pushes new fund model

Tau highlighted the proposed Transformation Fund as a central mechanism aimed at accelerating broad-based empowerment and enabling more meaningful participation in the economy.

Trade, Industry and Competition Minister Parks Tau has reaffirmed that South Africa’s economic transformation is both “a constitutional and moral imperative,” cautioning that slow progress, non-compliance and fronting continue to obstruct efforts to dismantle apartheid’s economic legacy.

Speaking during an NCOP Oral Reply session on Tuesday, the Minister said South Africa’s economy still reflects deep structural inequalities that disproportionately exclude black South Africans from economic participation, ownership and opportunity.

Transformation Fund Positioned as Key Tool for Inclusive Growth

Tau highlighted the proposed Transformation Fund as a central mechanism aimed at accelerating broad-based empowerment and enabling more meaningful participation in the economy. He stressed that the fund is grounded in the Constitution’s requirement to advance substantive equality.

He rejected misconceptions that the fund’s proposed 3% voluntary contribution from companies amounts to a levy.

“Companies will be contributing and participating in the fund on a voluntary basis,” he said, explaining that final details on participation, criteria and its relationship to BEE status will only be concluded once the fund is formally approved.

Tau said government had already held constructive engagements with private sector stakeholders to ensure the fund delivers real socio-economic results and avoids becoming a tokenistic initiative.

Concerns Over Widespread Non-Compliance and Fronting

Referring to the findings of the latest B-BBEE Commission report, Tau said government remained concerned about ongoing challenges that continue to dilute the impact of transformation policies, including:

• persistently low levels of enterprise and supplier development spending

• companies “ticking boxes” without enabling meaningful empowerment

• widespread non-compliance with B-BBEE legislation

• fronting practices that exploit vulnerable individuals

• fraudulent BEE certificates and contracts obtained using misrepresentation

Tau said these behaviours undermine South Africa’s vision of equity, fairness and inclusive development.

A Collaborative, Not Confrontational, Approach

The Minister stressed that government’s intention is not to fight with the private sector but to work collaboratively to drive transformation.

“The approach will not be to fight with the private sector, but to collaborate to create a society where a person’s ability to attain their talent, capability and ambition is not hindered by race, class or gender,” he said.

He added that transformation is not solely about redress but also about unlocking greater wealth creation, innovation and competitiveness, ensuring that economic opportunity is expanded for all citizens.

Modernising B-BBEE to Address Long-Standing Challenges

Tau noted that government is committed to conducting a comprehensive review of the B-BBEE framework to modernise it, strengthen enforcement mechanisms and clamp down on non-compliance and fraudulent practices.

The goal, he said, is to ensure that transformation efforts are impactful, transparent and aligned with South Africa’s long-term ambitions for inclusive growth.

Tau concluded by reaffirming that genuine transformation is essential to building a country where economic mobility is not determined by race, and where prosperity can be shared more broadly across society.