Abstract:
South Africa's economic transformation policies have not delivered inclusive economic growth, despite being part of South Africa's legislation for decades. The country's post-2009 growth trajectory - persistently below 2% annually - has intensified debate about whether transformation and growth are being advanced together or are increasingly in tension. Despite the enormous resources spent on compliance and accreditation, very little is known about the impact of Broad-based Black Economic Empowerment (B-BBEE) over the last 23 years because compliance data are not publicly available. Government's unwillingness to publish data means there is no authoritative research that quantifies compliance costs or assesses the firm and macroeconomic impacts of these requirements. So, we ran a survey to understand how firms view the costs and benefits of B-BBEE regulations. The survey shows that these compliance costs act as stealth taxes that strongly disincentivise firm start-up or growth if the firm is small and the founders are not black.
