South Africa’s Black firms face $45B funding gap

South African Black-owned businesses face a funding shortfall of $45 billion, a new report shows, citing “explicit investor bias” alongside barriers such as limited collateral and governance concerns.

The findings come three decades after the democratic government introduced a raft of measures — known as Black Economic Empowerment (BEE) — aimed at reversing the dispossession suffered by Black people under apartheid and colonialism. Despite the efforts to redress the problem, South Africa remains one of the world’s most unequal societies.

The study, published by British International Investment and Sweden’s Swedfund, both state-owned development finance entities, lands as Washington steps up pressure on Pretoria to dismantle BEE. US Ambassador Leo Brent Bozell III has put scrapping the policy on a list of demands tied to improving the investment climate. Pretoria has refused, despite disagreements within the coalition government. Instead the policy conversation has moved to creating a $60 billion fund to help scale up small Black-owned businesses.