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AfriForum Challenges Government's New R100 Billion "Transformation Fund" Proposal

Published January 23, 2025
18 days ago

AfriForum, a prominent South African civil rights organization, has voiced strong opposition to a recent government proposal which aims to establish a R100 billion "transformation fund." The fund, announced by Parks Tau, the Minister of Trade, Industry and Competition, would be financed by expropriating 3% of annual net profit after tax from businesses.





During a presentation to the Portfolio Committee as part of the Department's annual performance plan, Minister Tau detailed that this fund would be managed by the National Empowerment Fund (NEF) and dispensed based on Broad-Based Black Economic Empowerment (BBBEE) racial criteria.


This proposal has ignited controversy, notably from AfriForum, which argues that the initiative not only enforces racial discrimination but also endangers the broader business environment amidst an already strained economic landscape in South Africa. The organization also raises concerns about the potential for corruption, citing the troubling precedent set by the mismanagement of the government’s R500 billion Covid-19 support funds.


Ernst van Zyl, Head of Public Relations at AfriForum, has expressed that additional taxes coupled with racial criteria for fund allocation could undermine business operations and economic recovery. "The last thing the struggling South African economy needs is further government tax and more racial discrimination,” stated Van Zyl. He emphasized the necessity for adopting meritocracy and a more business-friendly approach instead of expanding what he describes as "ANC's failed race-obsessed experiment."


AfriForum also highlighted the fact that South Africa currently has over 141 race-based laws, branding it as the most race-focused government globally—a claim that Van Zyl suggests should be viewed critically rather than celebrated.


In response to the government's proposal, AfriForum has initiated a petition urging public support to oppose the continuation of racially discriminatory laws in the country.


As debates continue, the implications of such a fund on South Africa's businesses and its broader socio-economic landscape remain under intense scrutiny. The proposition of using racial criteria for financial empowerment has been a divisive issue, reflecting the larger, ongoing debate about racial policies and economic justice in post-apartheid South Africa.


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