South Africa has announced plans to address unemployment and income inequality with a reform of the Black economic empowerment program.
Enacted in 2003, the Black economic empowerment law implemented a scorecard system that motivates businesses to employ and elevate Black individuals through the provision of tax benefits and opportunities for government contracts.
However, twenty years later, the World Bank reports that South Africa’s income inequality is at its worst in history.
Also, unemployment rates for Black people are five times higher than for White people in the country. This has led many critics to claim that the empowerment strategy has failed.
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The African National Congress is now facing significant pressure to enhance the living conditions of Black individuals who have been marginalised due to years of white minority dominance.
To address this, the director of South Africa’s Black economic empowerment program has announced plans to introduce new incentives and potential sanctions aimed at increasing corporate involvement and mitigating the exploitation of the system established to combat the country’s severe unemployment inequality.
Also, President Cyril Ramaphosa says he wants to concentrate on demonstrating to businesses the benefits of Black empowerment, but he has threatened to use penalties if they don’t comply.
In line with the reforms, companies earn points in categories such as Black ownership, management control and skills development.
Through this reform, the government hopes to address income inequality and provide more jobs for the Black community in South Africa.
