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SA making slow progress on economic transformation


PRETORIA - The Broad-Based Black Economic Empowerment Commission says the country is making slow progress on economic transformation.

Data shows that economic empowerment amongst Johannesburg Stock Exchange-listed companies is regressing and that government departments are also failing to implement BEE legislation.

File: The Johannesburg Stock Exchange building in Sandton.


Broad-based black economic empowerment in the country is moving in the right direction but at a pedestrian pace.

On average, companies are not meeting 50-percent of the targets for management control, skills development, enterprise and supplier development.

At the same time, government departments are also not fully complying with economic empowerment laws.

"Every government entity must make sure that in anything that they do that relates to procurement, licensing, concessions, all those things that require something from government, government must insist on working with companies that are BBBEE compliant," Zodwa Ntuli from the Broad-based Black Economic Empowerment Commission.

All private companies doing business with government are bound by the BEE legislation.

This also applies to companies doing business with those dealing with government.

One of the most popular complaints to the commission pertains to fronting.

Fronting is the deliberate circumvention or attempted circumvention of black economic empowerment laws.

"Especially in some of the sectors like manufacturing we see the creation of new companies that don’t have any operations,” said Ntuli.

“They’re established to bring in something that looks like a 51% black owner. Essentially the work and the product are manufactured.

“Control is with the manufacturer. But the company is used to do transactions with government or with companies that are required to be more transformed."

Since its establishment in 2016, the commission has issued 55 preliminary and 14 final findings from complaints received.

Some ten cases have been referred to other regulatory entities.

Over a R100-million has been paid in redress to Black people found to have been disadvantaged by misaligned empowerment deals.



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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