Black Economic Empowerment scrutinised


One of the major shortcomings in the implementation of Black Economic Empowerment (BEE) was the over-emphasis on diversity of ownership and senior management. This was one of the key issues raised at the Black Economic Empowerment Advisory Council meeting, chaired by President Jacob Zuma on Friday.

The meeting discussed how to take the agenda of economic transformation forward and to promote inclusive growth, state news agency BuaNews reports.
“The unintended consequence of this over-emphasis is fronting and tender abuse. We are happy that the Council spoke out so strongly against fronting which is one of the major obstacles to the implementation of BBBEE [Broad Based Black Economic Empowerment],” Zuma said. “Fronting is an insult to the dignity of the poor and we have to act decisively against it. I am pleased that the Council is so determined to work with us to act against this heinous practice.”

According to the Presidency, there was special emphasis on the implementation of the New Growth Path and the role of Broad-Based Black Economic Empowerment (BBBEE) in creating jobs at the meeting.

In particular, the meeting stressed that BBBEE was not just about big business deals for a few individuals in society but also had to have a hand in empowering ordinary people. Broad-based empowerment was introduced in an attempt to distribute wealth across a broad spectrum of society, and not just to a few black individuals.
“In this regard, the Council called for the consistent implementation of broad-based BEE in all sectors of the economy, to ensure that the policy touches the lives of more people,” the Presidency said.

The meeting also noted that BBBEE was central to inclusive growth. Support was given to provisions of the New Growth Path which require a much stronger focus on the broad-based elements of the BEE regulations.

This included ownership by communities and workers, increased skills development and career-pathing for all working people and support for small enterprise and cooperatives, as well as a new emphasis on procurement from local producers in order to support employment creation.

The meeting also pointed out that to contribute to job creation, BBBEE has to, amongst others, promote new enterprise development, encourage local procurement and enhance skills development and employment equity.

Participants also agreed that fronting needed to be eradicated and effective mechanisms, including possible punitive measures against those guilty of fronting practices, needed to be implemented to stamp it out.
“It was agreed that government, with the support of the BBBEE Advisory Council, would ensure a revision of the BBBEE Codes to promote employment creation, investment in small business and cooperatives, broad-based ownership and employment equity,” the Presidency said

The Council also recommended that government should urgently ensure proper monitoring and evaluation of the implementation of the BBBEE Act.

A progress report was presented by government on work done in the past year to promote job creation. According to the presidency, amongst these are the following:

  • The full budget of R41 million for the Co-operative Incentive Scheme was paid out to 222 co-operatives, creating around 2159 new direct job opportunities and a further 745 temporary job opportunities.
  • A total of 100 new small scale cooperatives with approximately 500 new job opportunities were established, and 113 cooperatives were supported to enhance access to markets through local and international exhibitions.
  • A total of 224 new small, medium and micro enterprises (SMMEs) were created, 656 SMME’s were supported and 6 678 direct and indirect jobs were created and amongst these, 35% are women-owned and 96% are black-owned.
  • Government has 30 incubators countrywide, supporting SMMEs in various industrial sectors including chemical, biotechnology, floriculture, small-scale mining, ICT, stainless steel, furniture, construction, jewellery, bio-fuels, agriculture, automotives, base metals, mixed manufacturing and aluminium.

    The Black Economic Empowerment Advisory Council was appointed in December 2009, in terms of the Broad-Based Black Economic Empowerment Council Act no 53 of 2003. Government is pursuing the BBBEE policy because the majority of South Africans still lag behind the historically advantaged groups in terms of amongst others, the ownership of productive assets and access to capital and financial resources.

    The functions of the Council include providing advice to government on black economic empowerment, reviewing progress in the implementation of BBBEE as well as providing advice on the draft codes of good practice and draft transformation charters if required.