The Democratic Alliance has formally tabled legislation in Parliament aimed at dismantling South Africa’s Broad-Based Black Economic Empowerment framework and replacing it with a poverty-based inclusion model, marking the most significant legislative challenge to the country’s empowerment architecture in its 30-year history.
The Economic Inclusion for All Bill was introduced as a private members’ bill and will proceed to its first reading in the National Assembly before being referred to the relevant parliamentary committee for further consideration. DA chief whip George Michalakis said the proposal seeks to move South Africa away from what the party describes as a race-based empowerment model, with the intention of directing redress towards poverty rather than racial identity.
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The bill centres on the reform of public procurement, which the DA identifies as one of the most powerful tools available for driving economic inclusion. The state’s annual procurement budget stands at approximately R1.2 trillion — a sum that, the DA argues, should be directing opportunity to businesses that demonstrate measurable contributions to job creation, poverty reduction, skills development and environmental sustainability rather than compliance with racial ownership targets.
The bill also proposes removing race-based preferential procurement provisions and replacing them with a system that uses poverty as the primary proxy for disadvantage. Alternative empowerment mechanisms, including employee share ownership schemes, are proposed to broaden participation beyond traditional equity transactions.
DA member of Parliament Mat Cuthbert, who has been central to the bill’s development, argued that the existing BEE system had become a mechanism for extraction rather than genuine economic opportunity, with procurement rules bent to benefit politically connected individuals at inflated prices and with limited service delivery.
The DA rejected President Ramaphosa’s defence of BEE in his reply to the State of the Nation Address debate in February, arguing that it had benefited only politically connected elites at the expense of the poor, who remain trapped in poverty and locked out of employment.
The ANC, COSATU and the broader tripartite alliance have opposed the bill. The ANC and its allies moved quickly to defend BEE following the bill’s announcement, a response the DA interpreted as evidence of the ruling party’s intention to protect what it characterised as a patronage network.
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DA Federal Chairperson Dr Ivan Meyer argued that race is already not used as a determining factor when South Africans apply for social grants or for funding through the National Student Financial Aid Scheme, and that there was no principled reason why poverty rather than race could not serve as the basis for economic redress more broadly.
South Africa has an official unemployment rate of approximately 32%, rising to over 40% when discouraged work-seekers are included, and 44 million people are estimated to live in poverty. The bill is expected to face a lengthy parliamentary process, potentially taking years before any outcome. The ANC retains sufficient coalition support to block its passage, though the debate it generates may influence policy positions within the Government of National Unity.