The introduction of black economic empowerment legislation marked an important milestone for the economic development of black people. The ANC led government has managed to achieve a shift in the political landscape of South Africa in the 16 years of its rule. However, it remains to be seen if·the country would follow the intended changes towards economic development. The political achievement of the forces of change set in motion unto date could be easily reversed if economic parity is not achieved in a constructive manner supported by the will of the nation as guided by the current South African constitution. The government in its formative years made it its goal to pursue equity and wealth redistribution with the hope of growing the economy. These goals have been difficult to achieve, thus challenging the government of the day in its attempt to eradicate poverty and create a sustainable economy. The government approach to local economic development has mainly been centered on the establishment of small businesses that would hopefully provide employment to a greater part of the population. With the development of small businesses the Asgisa objective of 6% growth would be attained. Generally, the redistribution of of wealth has been a contentious issue, sparking controversies from both the proponent and detractors of BEE alike. There have been mixed reactions towards the implementation of BEE. Some critics regard BEE as a way to benefit mainly connected individuals rather than the mass of the previously disadvantaged. On the other hand, South Africa's corporate sector continues to be dominated, managed and owned by the minority whites. As a whole, whilst affirmative action has progressed, imbalances still exist in that women appear to be still disadvantaged in certain sectors of organisations regarding management positions and shareholding within companies. Although Black Economic Empowerment tends to increasingly lead to white economic disempowerment (primarily white males). it nevertheless remains evident that for black~ to enter into business is still marred with problems. It is apparent from the critics that not only blacks are affected, also whites need some kind of relief from deprivation; this would avert the next generation of poor whites. The research results reveal some of the effects which BEE has on the growth of small businesses and on black people in general. / Thesis (MBA) North-West University, Mafikeng Campus, 2011