In response to the World Bank’s recent recommendation that South Africa relax its increasingly stringent and highly prescriptive broad-based black economic empowerment (BBBEE) laws to attract greater private-sector investment in the country, Construction Sector Charter Council (CSCC) executive member Gregory Mofokeng has simply said, “No”.

Speaking at the Built Environment Indaba, in Sandton, on March 4, he told investors that, if they want to invest in South Africa, they will have to embrace BBBEE or take their money somewhere else.

However, at the same event, BBBEE proponents decried the lack of investment in the built environment sector, among other sectors of the economy, insisting that no amount of moral grandstanding would create jobs – only increased investment could achieve this.

“There will be no infrastructure development in any country if we don't have investment. It’s that simple. We can talk as much as we want. We can meet government Ministers on a daily basis, have good discussions and leave the meeting impressed with each other, saying we’re definitely going somewhere. But if there is no support for capital, nothing is going to happen,” Black Business Council in the Built Environment (BBCBE) deputy president Bafana Dube said.

For context, it should be noted that numerous foreign would-be private sector investors have complained that South Africa’s BBBEE policies are anathema to a favourable foreign investment environment – the World Bank being only the latest example.

In 2018, the EU expressed reservations about South Africa's BBBEE ownership rules, deeming them "unfairly onerous". As a condition for increasing investment, the EU requested a relaxation of these rules, indicating that the stringent requirements could deter potential investors.

There have also been instances where foreign investors resorted to international arbitration, alleging that South Africa's BBBEE policies violated bilateral investment treaties.

For example, Italian investors filed a case in 2007 citing breaches related to these empowerment initiatives.

Famously, in February, billionaire businessperson, Tesla and Starlink owner and CEO Elon Musk – who was born and grew up in South Africa – expressed interest in launching Starlink in the country, stating that he was "still waiting for regulatory approval" after carrying out successful launches in neighbouring countries.

The Starlink project would have brought low-cost high-speed Internet access to all South Africans, which would have been particularly beneficial for rural and underserved regions lacking reliable terrestrial infrastructure.

However, he did not agree with the local ownership requirements that would have to be met.

In many other African countries, Starlink has positioned itself as a cost-effective alternative to existing Internet providers. For instance, in Ghana, its services are reportedly half the price of leading local internet service providers, making high-speed Internet more accessible to a broader population.

Further, on February 6, Musk’s SpaceX officially withdrew from regulatory hearings led by the Independent Communications Authority of South Africa for similar reasons.

There are numerous other examples of investors pulling back from doing business with South Africa owing to the country’s stringent race-based economic policies, which seek to redress historic economic injustices committed more than 30 years ago.

“30 years into democracy, when you look at the state of transformation, we're not yet there. The question is then, where are we failing? Because we do have a government that is pro black. We do have officials that are black. We don't have any excuse,” BBCBE president Danny Masimene said.

Mofokeng insisted that further transformation of the built environment industry was needed, but admitted that he actually had no idea of whether this was being achieved or not, since his organisation had not delivered a report on the industry’s transformation progress since 2021.

“The last industry report that we produced was in 2021. We are supposed to be producing these reports on an annual basis so that we can all measure our efforts as far as transformation is concerned. As we sit here today, the last report we can refer to is the report that was produced in 2021. We definitely do need to get our latest reports so that we can measure ourselves,” he admitted.

He blamed the lack of proper reporting on a lack of funding from government.

“The biggest challenge that the CSCC is facing at the moment is lack of funding from government. We have proposed our own self-funding model – an industry funding model – and we have made our submissions to both the Department of Public Works and Infrastructure (DPWI), as well as the Department of Trade, Industry and Competition (dtic). The dtic has approved. We are now awaiting the approval of DPWI,” Mofokeng said.

Construction Education and Training Authority board chairperson Thabo Masombuka agreed at the event that there was insufficient tracking of transformation progress in the built environment.

He acknowledged that it was likely that more progress had been made than those in power would likely want to admit, particularly with regard to the advancement of young people in the economy.

As it stands, the youth unemployment rate, for job-seekers between 15 and 24 years old across all races, was at 59.6% in the fourth quarter of last year, according to Statistic South Africa.

“We've approved the track and tracer study, which is very comprehensive and detailed, to give stock of how much we've spent on young people over the past ten years. Where are these young people now?

“In order for us to know where we are going, we have to know where we are coming from, and then we are able to fix that. Sometimes we become too hard on ourselves. We probably are making progress, but we're not tracking this problem,” Masombuka said.

However, he admitted that the apparent failure to effect true economic transformation after more than 20 years of BBBEE laws being in place could not be fairly attributed to racial discrimination any longer.

“It's no longer about white people. After 32 years in democracy, it's no longer about white people. If we are not moving in this country, if we are not moving forward, it's not about white people. It's about black people, who are occupying the position [of power], although it’s a different institution. But they make it so difficult. We have achieved nothing,” Masombuka said.

However, Mofokeng alleged that anyone who criticised BBBEE and its failures to effect meaningful transformation was engaging in misinformation and lies.

“The opponents of transformation are grouping and they are reinforcing. The antagonists of transformation are fighting. They push back. Not only are they influencing the International Monetary Fund [and the World Bank], they are lobbying the US and they are lobbying super powers to isolate South Africa in what they called antagonistic policies that seem to be discriminating certain groups. They are using distortions, misinformation, lies and mischaracterisations,” Mofokeng said.