Has B-bBEE worked from government’s position?
This year marks the second anniversary of the broad-based black economic empowerment (B-bBEE) framework. Over 24 months, the framework has far exceeded the objective of redefining BEE in practical terms. There is general consensus that substantial progress has been made to advance empowerment in the country. However, as government, we encourage all parties to continue to build on this foundation.
B-bBEE policy endeavours to transform the South African economy to enable the meaningful participation of black people, women, and rural communities in the mainstream of the economy in a manner that has a positive impact on employment, income redistribution, structural readjustment and economic growth. Moreover, the strategy tries to address the imbalances of the past by transferring ownership, management and control of South Africa’s financial and economic resources to the majority of its citizens.
B-bBEE activity has shown a sharp rise with respect to the number and nature of transactions, involving new enterprises and new consumers. B-bBEE transactions were concluded across a range of sectors including mining, financial services, construction, oil and gas, telecommunications and food and beverages. Increasingly, large companies are forging deals that reflect the key characteristics of broad-based black economic empowerment.
Furthermore, it is important to note that the BEE deals recently concluded include broad-based schemes, women, youth, people living with disability, and people in the rural communities. These deals will obviously facilitate meaningful participation in the mainstream of the economy by ordinary people in South Africa. Certainly, this process has not scared off investors, and has almost become an automatic component of every business transaction for domestic and foreign investments.
How do we address concerns that BEE only benefited the very few elite group?
The BEE policy has been crafted to benefit the majority of black people in the economy. These beneficiaries are categorised in the form of ordinary black people, black women, youth, people with disabilities, and most importantly, people living in the rural areas. Enterprise Development, an element of the B-bBEE Scorecard, is meant to assist emerging black enterprises to achieve operational and financial independence. This element is used in conjunction with the preferential procurement element to bring more black people into the mainstream of the economy
Other elements like skills development and socio-economic development are also meant to fast track capacity building in the black communities, thereby facilitating the empowerment of black people in a sustainable way through job creation and industry development.
How does the fall of some of the BEE companies affect the policy?
According to the Department of Trade and Industry’s (dti) view, it is clear that BEE activities will depend on market performance at a particular time. Furthermore, it is important to note that the BEE policy is a ten year programme, and the transactions are concluded based on the future performance of the particular entities. Like any other investment, there will be ups and downs along the way, which will be dependent on the prevailing economic dynamics.
What other issues that accountants should take note of as far as BEE is concerned.
The accountants in South Africa should take note of the fact that the Accountancy Negotiation Charter Forum submitted on behalf of the accountancy industry an application for the gazette of the Charter Accountancy (CA) Charter in terms of Section 9(5) of the B-bBEE Act. One of the important observations in the Charter is the allocation for increased excisable voting rights of black people up to 50% in the next ten years.
The dti is in the process of assessing and analysing the application to ensure that it is aligned to the Codes and the objectives of the B-bBEE Act. Once completed, the process should provide clarity on whether there will be an Accountancy Charter to regulate transformation in the industry.
As in every other industry with unique transformation needs, accountants have an important role to play in ensuring that the accountancy profession contributes to B-bBEE by developing measures to facilitate and fast track access and entrance of black people into the profession.
Over and above other elements of the Code, accountants should support skills development and enterprise development initiatives that focus on the increase of black women and youth in the accountancy industry.
Nomonde Mesatywa, is the Chief Director: Broad-based Black Economic Empowerment, the Department of Trade and Industry.