🚨Hidden BEE Premiums: How Preferential Procurement Drains Billions 🚨
South Africa’s government pays a premium on almost everything it buys — far more than private businesses.
Why? It's a system that prioritizes race over value-for-money spending, wasting billions.
BEE isn’t fighting poverty — it’s pro-poverty policy.
Let’s break it down. 🧵👇
South Africa’s government pays a premium on almost everything it buys — far more than private businesses.
Why? It's a system that prioritizes race over value-for-money spending, wasting billions.
BEE isn’t fighting poverty — it’s pro-poverty policy.
Let’s break it down. 🧵👇
1️⃣ A R40M School That Should Cost R15M?
In 2009, Finance Minister Pravin Gordhan exposed the shocking reality:
❌ The state paid R40M for a school that should have cost R15M.
❌A R26 loaf of bread instead of R7.
That’s anti-ownership economics in action — where taxpayers pay more and get less.
In 2009, Finance Minister Pravin Gordhan exposed the shocking reality:
❌ The state paid R40M for a school that should have cost R15M.
❌A R26 loaf of bread instead of R7.
That’s anti-ownership economics in action — where taxpayers pay more and get less.
2️⃣ The Price of Politics
By 2010, Gordhan warned again: The government was being routinely charged inflated prices. But nothing changed.
💰 A R14M tender to organize a conference — double the losing bid of R7M — because the winner was a 100% black-owned firm.
This is crony socialism, where government-knows-best policies force taxpayers to subsidize inefficiency.
By 2010, Gordhan warned again: The government was being routinely charged inflated prices. But nothing changed.
💰 A R14M tender to organize a conference — double the losing bid of R7M — because the winner was a 100% black-owned firm.
This is crony socialism, where government-knows-best policies force taxpayers to subsidize inefficiency.
3️⃣ @MYANC Admits the Problem
Even Gwede Mantashe criticized BEE procurement in 2012:
⚠️ "BEE companies must stop using the state as their cash cow."
⚠️ "It is unacceptable to charge taxpayers R20M for a public school that should cost R5M–R10M."
And who suffers the most? The poor.
Even Gwede Mantashe criticized BEE procurement in 2012:
⚠️ "BEE companies must stop using the state as their cash cow."
⚠️ "It is unacceptable to charge taxpayers R20M for a public school that should cost R5M–R10M."
And who suffers the most? The poor.
4️⃣ R140M for a Website?!
In 2013, Free State officials paid R140M to a BEE contractor for a website redesign—using a R400 template.
After public outcry, they "corrected" the number:
➡️ "We actually paid only R40M."
➡️ Still 100,000x the real cost!
In 2013, Free State officials paid R140M to a BEE contractor for a website redesign—using a R400 template.
After public outcry, they "corrected" the number:
➡️ "We actually paid only R40M."
➡️ Still 100,000x the real cost!
5⃣ That R40M could have:
🏠 Built 400 RDP houses
👩🏫 Paid for 1,000 new teachers
🍼 Funded 80,000 child support grants
Instead, it lined the pockets of politically connected elites. BEE isn’t about growth—it’s wealth destruction.
🏠 Built 400 RDP houses
👩🏫 Paid for 1,000 new teachers
🍼 Funded 80,000 child support grants
Instead, it lined the pockets of politically connected elites. BEE isn’t about growth—it’s wealth destruction.
5️⃣ The Smart Meter Scandal
Johannesburg’s @CityPowerJhb handed a lucrative contract to Edison Power, a company linked to Jacob Zuma, despite its higher price:
❌ Double the bid of another BEE firm
❌ Higher than multiple competitors
❌ Imported meters from the US, while a local firm planned to manufacture them in SA
Johannesburg’s @CityPowerJhb handed a lucrative contract to Edison Power, a company linked to Jacob Zuma, despite its higher price:
❌ Double the bid of another BEE firm
❌ Higher than multiple competitors
❌ Imported meters from the US, while a local firm planned to manufacture them in SA
6⃣ This is choking small businesses while driving up costs for everyone.
❌ More taxpayer money wasted
❌ Fewer jobs for South Africans
❌ Higher electricity prices for struggling families
❌ More taxpayer money wasted
❌ Fewer jobs for South Africans
❌ Higher electricity prices for struggling families
7⃣ Transnet’s R15.5bn "BEE Premium"
In 2013, Transnet awarded a R15.5bn fuel contract to 9 BEE firms. Their own CFO admitted:
⚠️ Fuel would cost more because the new firms lacked experience.
⚠️ The extra cost was justified because "BEE comes at a premium."
Translation? A direct transfer of wealth from taxpayers to connected insiders.
In 2013, Transnet awarded a R15.5bn fuel contract to 9 BEE firms. Their own CFO admitted:
⚠️ Fuel would cost more because the new firms lacked experience.
⚠️ The extra cost was justified because "BEE comes at a premium."
Translation? A direct transfer of wealth from taxpayers to connected insiders.
8⃣ And who pays?
➡️ Poor households struggling with high food & transport costs.
➡️ Small businesses suffocating under anti-innovation policies.
➡️ Job-seekers locked out of the aspiration economy.
➡️ Poor households struggling with high food & transport costs.
➡️ Small businesses suffocating under anti-innovation policies.
➡️ Job-seekers locked out of the aspiration economy.
9⃣ 💡 The Bottom Line
BEE was supposed to create economic inclusion. Instead, it’s an opportunity-crushing policy that punishes merit-based success while making poor South Africans even poorer.
BEE was supposed to create economic inclusion. Instead, it’s an opportunity-crushing policy that punishes merit-based success while making poor South Africans even poorer.
🚨 Cutting BEE premiums saves R100bn — enough to CUT VAT from 15% to 11.5%! NO NEED FOR HIGHER TAXES.
🔹 Lower VAT means:
✔️ Cheaper food & transport.
✔️ More take-home pay.
✔️ A real shot at economic mobility.
📢 Like & share if you agree!
📖 Read the IRR’s "Cut VAT & BEE" report here: irr.org.za/reports/the-ir…
🔹 Lower VAT means:
✔️ Cheaper food & transport.
✔️ More take-home pay.
✔️ A real shot at economic mobility.
📢 Like & share if you agree!
📖 Read the IRR’s "Cut VAT & BEE" report here: irr.org.za/reports/the-ir…
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