South Africa’s broad-based black economic empowerment (B-BBEE) framework must be critically and honestly reviewed to build on its past successes and speed-up its vital contribution to the stability, sustainability and growth of the South African economy.
Such a reflection, which will include criticism of unintended outcomes, is not anti-empowerment but rather an effort to better facilitate more meaningful and sustainable transformation.
Making B-BBEE more effective
For banks, the debate is not about scrapping B-BBEE but how to make it more effective. This can best be done by shifting from measuring inputs to assessing whether the targeted outcomes are being achieved.
The need to review B-BBEE legislation is widely acknowledged. Minister of Trade, Industry and Competition Parks Tau has announced reviews of the legislation, aimed at “refining” regulations, codes of good practice and guidelines. The reviews and related proposals, which include a transformation fund, will go on to identify more “substantive amendments” to improve B-BBEE.
The Banking Association of South Africa (Basa) and its members will work together with the Department of Trade, Industry and Competition and other trade and business associations to help ensure that transformation is sustainable and successful.
Measuring outcomes
Basa agrees with the minister that “we cannot afford a compliance-driven approach that measures inputs but fails to interrogate outcomes”.
Basa is in favour of shifting the emphasis in transformation from measuring inputs – predetermined spending targets – to measuring outcomes: the number of black employees, entrepreneurs and businesses who can take advantage of opportunities for advancement. The approach measures what matters: the improvements in the lives of beneficiaries.
An outcome-based approach will have to be negotiated with all stakeholders in the Financial Sector Code. A review of the FSC needs to be completed so that there is better alignment between the FSC, the needs of the country and the financial services sector.
For now, banks continue to account for their performance against targets set out in the FSC. In 2024:
- Nine banks had achieved Level 1 empowerment status, including the top six banks, which held 92.6% of total banking assets, worth R7.82 trillion as of July 1, 2025.
- Ownership targets, including voting rights for black people, were at 37%, well ahead of the 25% target. Black economic interest was at 29%, ahead of the 25% target.
Banks fall short of senior, top senior target
While 90% of junior managers are black, ahead of target, banks fall short of the senior and top senior target of 60%. In 2024, 55% of senior and 49% of top senior bank managers were black. However, the strong pipeline of junior and middle management makes the transformation of senior management ranks inevitable. Forty-four percent of all bank directors are black, against a target of 50%.
Banks had 27 million qualifying product accounts that facilitate economic inclusion in 2024. While many of the accounts might not be fully used to the best effect, they are an important access point to the banking system for many South Africans.
Banks committed to transformation
The figures are hard evidence that banks clearly understand that economic transformation and financial inclusion are imperative for the country and they are committed to these objectives in word and deed.
In fact, banks often do more than is required of them.
In 2024 alone, banks provided R136 billion in empowerment funding, of the R150 billion they are meant to provide over five years.
Banks are opposed to unfair discrimination
Beyond economic transformation and empowerment targets, banks are opposed to unfair discrimination of any kind. The voluntary Code of Banking Practice makes it clear that banks “will not discriminate unfairly on any prohibited grounds in the provision of banking services or products and in the quality and terms of services”.
The code is aligned with the Conduct Standard for Banks, which is part of the Financial Sector Regulation Act and enforced by the Financial Sector Conduct Authority.
Basa’s member banks also accept the jurisdiction of the National Financial Ombud Scheme South Africa, which has jurisdiction to hear and adjudicate complaints against banks, for free. To date, no Basa member bank has been found guilty of unfair discrimination.
While South African banks exceed many of their empowerment targets, the year-on-year improvements for some targets are often in smaller increments than what is desirable. Transformation in South Africa is often slower than ideal because of meagre economic growth. The economy expanded only 0.6% in 2024 and 2023. The lack of expansion reduces opportunities for inclusive economic growth, employment, promotion and ultimately opportunities for empowerment.
The most important thing that can be done to significantly accelerate economic transformation and empowerment in the country is ensuring a sustained increased rate of inclusive economic growth.
- Kunene is the managing director of the Banking Association South Africa.
- South Africa’s B-BBEE framework requires a critical review to enhance its effectiveness, focusing on meaningful and sustainable economic transformation rather than just compliance.
- Banking Association South Africa (Basa) supports shifting from input-based metrics (like spending targets) to outcome-based measures (actual black economic participation and advancement).
- As of 2024, major banks have made significant progress in ownership and junior management targets but still fall short in senior leadership representation of black individuals.
- Banks have provided R136 billion in empowerment funding in 2024 alone and oppose any form of unfair discrimination in banking services, adhering to established codes and regulations.
- The slow pace of transformation is linked to South Africa’s low economic growth (0.6% in 2023 and 2024), highlighting that faster inclusive economic growth is critical for accelerating empowerment.
