Wayden Michaels | 12 September 2023 The skills development provider hosted their very first programme which was a success and said that they’re now ready to collaborate with companies to bridge the unskilled youth gap. Local skills development NPO, Seven Fold Mystery launched a new programme in partnership with NACOSA – a community service organisation working to build strong, equal, and healthy communities free from the burden of HIV, Aids, TB and gender-based violence. The programme is aimed at young women between the ages of 15 to 24 years and the launch took place at Roodepoort City Hall from September 4 to September 6. This three-day intervention programme focused on empowering young women to build an Aids-free future and addressing gender-based violence issues around communities which saw ‘No Means No’ sessions, financial literacy, and sexual reproductive health classes presented. The free intervention strategy also saw mentorship offering over six months, referral, and layering to relevant partners and certified courses, while beneficiaries were awarded certificates at the end of the three days. Seven Fold Mystery is a non-profit organisation, which has been operating for three years now and is dedicated to skills development and industry-related activities. Their mission is to empower vulnerable, young, and disabled individuals by providing opportunities for training, skills development, employment, and personal pride. Their dedication to inclusion, diversity, and empowerment motivates them to develop skills, employment opportunities, personal development, and community participation. “At Seven Fold Mystery, we are dedicated to nurturing talent, fostering growth, and creating lasting change. Join us in our journey to empower the vulnerable, youth, and the disabled, and together, let’s build a more inclusive and prosperous future,” Kopano Ntsele Toguen, the founder of the NPO, said. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://roodepoortrecord.co.za/2023/09/12/npo-launches-new-project/

Staff Writer | 12 September 2023 Microsoft South Africa has embarked on a skills development training programme to train 2 000 local small, medium and micro enterprises (SMMEs) in artificial intelligence (AI) skills. According to a statement, the tech giant will equip SMMEs for an AI-powered future, setting them on a trajectory of sustainable growth through the Microsoft for Start-ups Founders Hub, which provides entrepreneurs with free technology resources. The programme particularly targets SMMEs specialising in developing smart solutions for government departments. As AI increasingly helps businesses across the globe to evolve, Microsoft says its initiative looks to pave the way for a more inclusive future and help position Africa’s SMME sector at the forefront of global digital transformation. The first training sessions were recently delivered in Durban, in the lead-up to the GovTech 2023 conference, taking place from 12 to 14 September. The workshops leveraged the low-code capabilities of the Microsoft Power Platform, to help SMMEs build solutions and applications that are fuelled by data and AI. “Through this initiative, we want to help equip SMMEs with the skills and understanding they need to develop and provide AI-driven solutions that empower government to not only modernise processes, but also improve decision-making and unlock efficiencies and cost savings,” notes Lerato Mathabatha, public sector director at Microsoft South Africa. The Microsoft Founders Hub was launched in Africa in 2021, to provide entrepreneurs with access to a self-service hub that delivers a range of resources, including tools like Microsoft Azure, GitHub and Microsoft 365. It also assists SMMEs with go-to-market and business support. The hub currently offers support for 1 000 African start-ups, according to Microsoft. The Microsoft Work Trend Index highlights the potential of AI not only as a technological tool, but as an enabler of business efficiency and innovation. “We recognise that training is not a once-off activity. Post this training at GovTech, we will continue to provide SMMEs with access to resources through the Founders Hub. Making AI technologies and skills accessible to SMMEs is an important step forward if we want to drive a more digitally-inclusive, and active business landscape in South Africa,” says Mathabatha. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.itweb.co.za/content/8OKdWMDXKJNMbznQ

Ethics, skills & competence are at the top of the due diligence list when selecting a B-BBEE Rating Agency. Firstly, an organisation must ensure that they engage the services of a B-BBEE Rating Agency in line with the R47-03 document that does not allow B-BBEE Rating Agencies to provide B-BBEE Consulting services. Secondly, organisations must ensure that their chosen B-BBEE Rating Agency allocates a team with the technical expertise to ensure the B-BBEE Verification process is smooth. Remember, an organisation is within their rights to request CVs about the team undertaking their B-BBEE Verification. It is encouraged that Members adopt a Due Diligence process when selecting a B-BBEE Rating Agency. Verification Preparation Services are available to Members to assist with planning for the B-BBEE Verification process.

Skills Development is an intrinsic part of building a transforming economy. It incentivises organisations to use 6% of their payroll annually for Skills Development interventions. The core aim is to facilitate development to create sustainable employment, thus inviting more people to participate in the economy. Some organisations invest what they can afford, whilst others aim to fund the complete 6% for Skills Development. However, due to a disconnect on where the spend would be most effective and how a meaningful investment in higher education, training or learnerships, internships or apprenticeships could lead to absorption, they only meet the sub-minimum requirements. It Is encouraged that Members develop and maintain a sustainable Skills Development strategy. Skills Development Services are available to assist members in developing Skills Development strategies.

Youth Employment Service (Y.E.S) B-BBEE legislation and the subsequent Practice Note 1 of 2018 are clear that expenditure for the initiative and Skills Development must remain independent of one another, which extends to administration costs. Clause 7 of the legislation references Informal Spend for Category F & G training initiatives featuring in the Skills Development Matrix which states: “7.1 Informal Skills Development expenditure for Y.E.S employees will be recognised during the Verification Process of the Skills Development element under Amended Code Series 300, Statement 300. Y.E.S Measured Entities will be able to claim up to 50% of their Skills Development Spend as Informal Training (Category F and G of the Skills Development Matrix) against the Skills Development Scorecard”. Further reference appears in clause 1.11 of the Practice Note: “1.11 Y.E.S Measured Entities will be able to claim up to 50% of their Skills Development Spend as Informal Training (Category F and G of the Skills Development Matrix) against the Skills Development Scorecard for Y.E.S Eligible Employees only”. Therefore, administration costs for Y.E.S Employees would fall under Preferential Procurement Spend and not Skills Development. Y.E.S Management Services are available to assist members in understanding requirements under the Y.E.S Initiative.

Sibongile Vilakazi | 12 September 2023 South Africa faces infrastructure setbacks and is starved of much needed investment to drive the economic reconstruction and recovery outlook. Despite an arsenal of legislative provisions aimed at driving transformation, our economy remains concentrated in the hands of a few, exacerbating inequality and resulting in an economic landscape where gross domestic product growth can never grow to materially change the conditions of the majority. While the state has targeted infrastructure led economic recovery among others, impatience with the declining attitude to transformation and empowerment both in the state and private sector, all manner of upheaval and even criminal conduct are emerging in the ecosystem. Key among these is the rise of the phenomenon of Construction Mafias. These collectives are often referred to as ‘forums’. Speaking at a recent webinar, the Minister of Public Works stated that the general complaint laid by these groupings is “that contracts in the government are given to one and the same companies”. According to the Global Initiative against transformational organised crime report on “the construction mafia in South Africa”, “this often starts with a smaller group of people with a specific identity, and who are capable of inflicting violence, from which a ‘broader group identity may emerge, serving to band disparate agents into a recognisable network that ensures their loyalty”. Most famous among these are the ‘Amadela ngokubona’, emerging out of KwaZulu-Natal. There have been numerous calls for regulating business forums or collectives representing interest groups. This open sea of malicious actors loosely labelled as forums potentially hamper the work of organisations like Black Management Forum (BMF), whose proven track record can be conflated with these emerging trends. While commitments are made to confront this scourge of criminal elements in some of these groupings, we have to also assess the extent to which knowledge of our transformational laws and specific sector codes (built-environment in this context) can equip black entrepreneurs and professionals with needed understanding of how to navigate an ever-changing market with innovative strategies to unlock new economic opportunities for their businesses. The BMF regularly embark (as per the mandate of developing managerial skills) on a series of webinars to engage these important questions. These include the State of South Africa’s forums, presented by Dr Ongama Mtimka, whose doctoral thesis looks into the “political economy of transformation in Nelson Mandela University Bay: a critical analysis of the construction sector”. The BMF also frequently provides engagements aimed at better understanding of Broad Based Black Economic Empowerment (BBBEE) sector codes. It wouldn’t be surprising if the rise of lawlessness in the construction sector will soon be blamed on BBBEE. The existence of a policy is not the problem in spaces where law enforcement needs to be heightened. However, we are beginning to suspect that there is limited awareness of these provisions in the BBBEE Act and as another form of literacy challenges in South Africa, there may be too many professionals and entrepreneurs who navigate socio-economic South Africa today without having read any of these laws. If Professor Marwala’s “those who do not read should not lead” dictum is anything to go by, it then must be said that black businesses and professionals will not lead their own agenda for economic development and empowerment if they do not read the same texts that are intended to aide this in the form of the BBBEE Act. Nothing demonstrates this more than the case before court between Sanral and a host of construction sector entities who filed an interim interdict to the awarding of tenders on road stabilisation at the Eastern Cape High Court. Sanral have elected to use the powers given to them by Treasury regulations to make shifts in how they allocated preferential procurement scores to tenderers. This has resulted in what the applicants call the relegation of B-BBEE level rating and the elevation of black ownership and subcontracting to targeted enterprises. This is bound to be an instructive case in an environment where legislation needs to be transformative to defeat inequality and high concentration of markets. The spectre of violence in the construction sector must be assessed against this shifting legislative environment. The ‘real forums’ working with government and other stakeholders of development and empowerment must put these laws to the test through innovative entrepreneurial undertakings for the benefit of the black players who continue to languish on the fringes of the South African economy. It will not be an ignorance of these laws that will end violence, but a better and deeper understanding and engagement of them that will steer us all towards a turnaround path. We in the BMF will continue to promote awareness of sector specific codes to inspire a value creating agenda for transformation. Those who must lead must therefore read! ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/economy/improved-awareness-and-understanding-of-bee-sector-codes-may-be-an-antidote-to-construction-mafias-f5c29c83-f3b5-47f8-aa4d-dc3b6e87b213

Simangele Khoza | 11 September 2023 Sefa’s core mission - Empowering SMMEs and cooperatives. In a remarkable event held at a local hotel on Thursday, August 31, the Small Enterprise Finance Agency (Sefa) reaffirmed its commitment to supporting women-owned businesses. This initiative was in honour of Women’s Month and aimed to bolster the entrepreneurial spirit among women in eMalahleni. Sefa, operating under the umbrella of the Department of Small Business Development (DSBD), has a primary mission to foster the establishment, development, and growth of Small, Medium, and Micro Enterprises (SMMEs) and cooperatives. Beyond this mission, Sefa’s activities also contribute significantly to poverty alleviation, job creation, and overall economic growth. The heart of the event lay in face-to-face engagement with women entrepreneurs. It was a unique platform that welcomed both seasoned entrepreneurs and budding start-ups. Here, women had the opportunity to learn about the diverse array of products and programmes that Sefa offers to support women-owned businesses. Sefa’s unwavering dedication to empowering women in business is not just a Women’s Month endeavour, it’s an ongoing commitment. By providing women with the necessary resources, knowledge, and opportunities, Sefa plays a crucial role in fostering a more inclusive and economically robust society. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.citizen.co.za/witbank-news/news-headlines/2023/09/11/sefa-empowers-women-entrepreneurs-during-womens-month-celebration/

Terence Creamer | 11 September 2023 A new Centre for Development and Enterprise (CDE) report argues that the South African government’s policy of localisation is locking the country “into the wrong path” of rising protection and rising inefficiency. Published following an expert roundtable, the report outlines what it calls the “seven sins of localisation”, including: A policymaking process that is neither transparent nor evidence-based; The imposition of conditionalities that pose a threat to investment; A strategy of import substitution that is biased against exports; A reduction of competition, owing to a restriction on imports; Constraining innovation by excluding foreign knowhow; Threatening trade relations by forced localisation that may violate international obligations; and locking the country into an industrialisation path that relies on protection and facilitates rent-seeking behaviour. The report comes as the Department of Trade, Industry and Competition (dtic) continues to prioritise localisation as a central pillar in South Africa’s industrial policy and amid growing concern over what some are describing as the country’s premature de-industrialisation. Government has responded with a series of initiatives, including a 2021 approach to the social partners represented in the National Economic Development and Labour Council with a call for a 20% reduction in nonfuel imports over a five-year period. In addition, the dtic has for some time been working across various sectors, from steel and automotive to renewable energy and clothing, to develop masterplans to identify opportunities for local industrial development. It also comes as several other countries, including highly developed countries, are ramping up their own industrial policies to revive domestic manufacturing. Nevertheless, CDE executive director Ann Bernstein argues that, instead of compelling the local manufacture of products, government should be working to shape a business environment that attracts and rewards investment shaped by strong competitive pressures and which is more often export-oriented. She, thus, calls on government to rethink its adherence to the localisation policy, which the CDE report describes as “expensive”. “We need a different approach to building an expanding local economy with many more growing, innovative and export-oriented firms creating employment opportunities for the whole South African labour force. “That is the kind of ‘localisation’ we need,” Bernstein concludes. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/new-report-says-localisation-policy-locking-south-africa-into-wrong-path-2023-09-11

Sibahle Malinga | 8 September 2023 MTN South Africa has introduced the MTN Xlerator programme, to scale and improve procurement processes and the development of the mobile network’s local small and medium enterprise (SME) suppliers. According to the telco, the enterprise and supplier development (ESD) initiative, which was launched today in Johannesburg, aims to accelerate local supply chains and drive economic growth within MTN’s supplier ecosystem. It will also provide training and skills development based on the needs of the individual participating entrepreneurs. Through the Xlerator programme, MTN has set a target to spend R50 million in procurement, at 50 black-owned suppliers (up from 13 in 2021), with more investments planned for the future. The telco says it plans to have 140 active qualifying small enterprises within MTN SA’s supply chain, from 70 now, and 120 active exempted micro enterprises (EMEs) from 66 currently. EMEs are businesses that are exempt from measurement in terms of the Department of Trade and Industry’s codes of good practice for black economic empowerment. The introduction of Xlerator marks a significant step forward in MTN’s journey to support black-owned enterprises, as part of the environmental, social and governance pillar of its Ambition 2025 strategy, says the company. “At MTN, we’re significantly ramping up procurement and development spending into key areas, where outcomes can be accelerated and maximised,” says MTN SA CEO Charles Molapisi. “Supply chain resilience will be enhanced by increasing supplier diversity and strength, collaboration, and the ability to adapt to the ever-changing operating environment and challenging economic conditions. We’re improving value chain efficiency by fostering responsiveness, flexibility, innovation and cost-effectiveness.” MTN’s total measured procurement spend increased from approximately R26 billion in 2018, to more than R44 billion in five years; R17 billion of that spend went to entities that are at least 30% black women-owned in the 2022 financial year, says the company. MTN SA says it also seeks to lower the barriers to entry to the telecommunication and technology sectors, which have been notoriously difficultfor SMEs to break into, due to the often-high cost of capital investment required. “As an example, this programme is already helping us facilitate more black-owned network operators in SA, which is an important milestone for the industry. Beyond procurement opportunities, we are also reshaping the ownership landscape of our Y’ello stores, with the goal of better mirroring the demographic tapestry of South Africa,” Molapisi explains. MTN’s Xlerator will also offer support to participants in a number of ways, to aid their growth and ability to meet the programme requirements. The short-term processes focus on assisting with working capital funding and will include early payments and working capital loans for small businesses. Longer-term processes will include low-interest loans, asset finance and guarantees, it says. “Through MTN Xlerator, we are transitioning our supply chain strategy from transactional to values-driven, with ESD at its epicentre. The programme aims to be a beacon of economic transformation, where budding entrepreneurs and suppliers are nurtured, while fostering competitive markets that catalyse job creation and establish self-reliant communities,” adds Molapisi. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.itweb.co.za/content/KBpdg7pm9wLMLEew

Bongani Mdakane | 10 September 2023 Multinational construction group SMEC this week went to the Johannesburg High Court to interdict the South African National Road Agency (Sanral). The interdict is aimed at stopping Sanral from proceeding with and or implementing the outcome of the tender adjudication process. This relates to the tender invitations contained in SMEC’s papers, pending a review application launched in Gqeberha High Court. Sanral’s decision to implement a new scoring system in awarding tenders is challenged. The construction company has taken umbrage with the new scoring system introduced by Sanral in awarding new and existing tenders, saying it disadvantaged some companies. Sanral, which is responsible for the road infrastructure in the country, has introduced a new Preferential Procurement Policy, which includes a new scoring system. The new scoring system was revealed in May, when the new policy was uploaded to the Sanral website. SMEC said the new scoring system was introduced through an addendum to all tender invitations then pending and all the new tender invitations. Before introducing this system, a company’s B-BBEE level could account for 0 – 10 or 0 – 20 of the points, depending on its B-BBEE level. With the new system, a B-BBEE level, regardless of the level, now only accounts for a maximum of one or two points, depending on the contract size. Added to that is the possibility of another five points (if the maximum is 10) based on being wholly black-owned and four points (if the maximum is 10) if targeted enterprises are subcontracted. SMEC, bidding for work in the Eastern Cape, said in its court documents, the new system renders the Broad-Based Black Economic Empowerment Act a nullity. The company also says all the money companies spent to obtain a high B-BBEE score would now mean nothing if the new scoring system is allowed to stand. In its response, Sanral denied SMEC was precluded. The state-owned entity said that no pre-qualification criterion prevents a bidder from submitting the relevant bid. Sanral said if SMEC wants to improve its score in the black ownership category, it can make use of subcontractors from targeted enterprises to better the score. The rest of the 90 out of the 100 points relate to pricing, and this might well mean the SMEC wins the tender. Sanral also said the harm complaint was speculative as they cannot predict the outcome of the tender process. In fact, Sanral said SMEC stands an equal chance to the other bidders in being successful. However the court ruled in favour of SMEC. “The applicant (SMEC) has a reasonable prospect of success and should be allowed to take the decision on review and have an effective remedy available. “The right to partake in a constitutionally compliant procurement process is a clear right. The right to have a review application heard in which the court would be able to grant just and equitable relief is also a clear right. The applicant has thus established that it has prima facie right,” the judgment reads. “It follows that any exclusion from participation in a process must be based on a sound and lawful foundation, absent of which, the applicant will have prima facie right and an apprehension of imminent irreparable harm. The immediate irreparable harm lies in the possibility that its constitutional rights are infringed by being subjected to an unconstitutional scoring system.” ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/business/multinational-firm-interdicts-sanral-from-implementing-scoring-system/

SA News | 10 September 2023 Deputy President Paul Mashatile has attributed the growth in gross domestic product (GDP) to the economic recovery measures that were implemented by government to support the economy. Stats SA reported that the country's GDP grew by 0.6% in the second quarter of 2023 while it grew by of 0.4% in the first quarter. These measures include financial support for distressed businesses, infrastructure investment, and job creation initiatives such as the Presidential Youth Employment Initiative (PYEI), implemented as the Basic Education Employment Initiative (BEEI) across all nine provinces. “Between April and June this year, at least 135 000 earning opportunities were secured by young people through the Presidential Youth Employment Initiative’s National Pathway Management Network. “Some 108 061 of these were accessed through the SA Youth platform, with 27 088 opportunities scored through the Department of Employment and Labour’s Employment Services of South Africa (ESSA) website. We are adamant that if PYEI can receive more funding, it will reach more young people,” Mashatile said on Saturday in Johannesburg. Addressing the Forty Under 40 South Africa Awards Ceremony, he called on young people to take up the opportunities available in digital sectors and others to combat the high youth unemployment rate. “Our government believes that entrepreneurship is part of the remedy for the massive youth unemployment. In partnership with the private sector, we have launched several youth business funding opportunities to help youth start and maintain their businesses. This includes the Youth Challenge Fund (YCF), the Youth Pipeline Development Programme, and the Youth Technology Innovation Fund (YTIF). “While these measures have helped stabilise the economy, we must remain vigilant and adaptable to emerging challenges. Moreover, we have also gained some pace by implementing the structural reforms for the reconstruction and recovery plan, Operation Vulindlela,” Mashatile said. Since Operation Vulindlela was launched in October 2020 as part of the Economic Reconstruction and Recovery Plan, government has implemented 35 priority structural reforms identified for their impact on economic growth and job creation. “We have made progress in energy, our logistics network, digital communications, and the reform of the visa regime to enable businesses to attract the skills they need to grow. Eleven reforms have been completed, while 14 are on track or progressing well. “Regarding the energy challenge that has remained a top priority in our country, we have amended Schedule 2 of the Electricity Regulation Act to remove the licencing requirement for generation projects of any size,” the Deputy President said. More than 100 projects are at various stages of development, representing over 10 000 megawatts of new generation capacity and over R200 billion in private sector investment. “Additionally, three projects from the risk mitigation programme have been constructed, with five projects expected to reach financial closure this quarter. “We approved the Electricity Regulation Amendment Bill in March, which has been tabled in Parliament. This Bill will establish a competitive electricity market, enabling multiple generators to compete on a level playing field. These are essential to ramping up energy generation in the short and medium term,” the Deputy President said. He said government’s efforts in investing in young people means redirecting efforts and resources in a number of critical areas, including the skills revolution and education, providing quality health care, investments in new technologies as part of 4IR and artificial intelligence as well as investments in infrastructure for ease of business and movement of goods allows entrepreneurs to flourish. “Investing in youth participation is not just a trendy concept but a necessity for our collective future. It goes beyond just financial resources. It requires a mind-set shift and a collective commitment to nurturing talent and empowering individuals,” Mashatile said. Taking advantage of opportunities on the continent The Deputy President urged entrepreneurs to take advantage of the African Continental Free Trade Area (AfCFTA). “In this regard, South Africa is a significant member of this trade revolution that will shape the continent's future by stimulating innovation and value-chain growth and boosting industrialisation and job creation across industries. The AfCFTA has 54 signatories, making it the largest free trade area in terms of the number of member states, second only to the World Trade Organisation. “As part of Agenda 2063, we must dismantle the barriers that hinder youth participation in the economy. We need to break free from the cycle of generational exclusion and embrace an intergenerational approach where the knowledge and experience of our elders are combined with the fresh ideas and perspectives of today's youth,” he said. Mashatile said unlocking the demographic dividend will spark a wave of growth and progress that will benefit the youth and the entire continent. “We need greater collaboration among governments, civil society, the private sector, and international partners to achieve this,” he said. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.sanews.gov.za/south-africa/economic-recovery-measures-improve-economy#:~:text=These%20measures%20include%20financial%20support,BEEI)%20across%20all%20nine%20provinces.

Cameron Mackay | 7 September 2023 Management consulting company EY Africa private capital leader and partner Graham Stokoe on September 7 discussed key findings of the Southern African Venture Capital and Private Equity Association’s yearly Private Equity (PE) Industry Survey, and emphasised the improved performance of Southern African PE firms in 2022, when compared with global trends. “We had 49 PE firms participate in this survey. EY has been doing the survey for the past three years, and it’s pleasing that the number of participants has increased from 40 last year. This is a great representation of the industry and what’s happening. This has contributed to great data for us, and it has grown the credibility of the results,” he stated at the 2023 PE Equity Survey launch, held in Johannesburg. Information in the survey covers events up to December 31 last year. The survey covers analysis of the industry’s strategic priorities. This includes environmental, social and governance (ESG) and impact investing, talent, broad-based black economic empowerment, fundraising, investment and divestment activity, value creation and funds under management. The survey includes comparisons to global PE trends and the level of detail that respondents have provided varies across topics and questions in the survey. “It’s the first time in our three years of doing the survey that we got industry participants to share enough information on their portfolio companies. This includes information on revenues, employees and earnings before interest, taxes, depreciation and amortisation information. This helps to see if this industry is driving value creation and therefore economic growth.” While a global recession and geopolitical concerns are seen as the biggest industry concerns by both Southern African and global PE firms, Stokoe pointed out that the timing of the survey could have a slight impact on the findings. The views of PE firms in Southern Africa were gathered in March and April 2022 and those of global PE firms in November and December 2022. “Some of those macroeconomic shifts on interest rates and inflation have only come out in the last few months, not when the survey was done in March and April last year. “In some of the broader areas like cybersecurity and other global concerns such as geopolitics, one has to keep in mind that with the global survey, global PE firms are much larger than the average Southern African PE firm size. This will lead to some differences in the findings.” ESG, IMPACT INVESTING & TRANSFORMATION In addition to geopolitical concerns, the survey found that 57% of PE firms have specific impact investing mandates, an increase from 45% in 2021. Of the respondents whose funds do not have impact investing mandates, 79% are likely to consider such mandates within the next five years, a decrease from 86% in 2021. The study also indicates that strategic priorities for Southern African PE firms, aside from asset growth, are ESG initiatives and talent management. “This is a theme that has grown massively global. It’s been a theme in a number of Southern African PEs for many years, but the importance of this theme is growing globally, to attract capital and you know, showing meaningful impact. Investors want financial returns, but also want the fuller impact of their investments as well,” Stokoe said. He also pointed out that survey results indicate that the PE sector is making positive shifts in terms of transformation. Fifty-nine per cent of PE firms have over 50% black ownership without applying modified flow through. Further, 28% of PE firms have over 30% black female leadership and 60% of PE firms have over 50% black management. Stokoe also noted that Southern African PE firms have continued to focus on hiring more people with racially and ethnically diverse backgrounds in both the front and back offices. He added that, in terms of PE firms with over 30% representation of under-represented people with racially and ethnically diverse backgrounds, Southern African firms with over 30% representation increased from about 60% to 70% in 2021 to 80% last year. Global firms with over 30% representation, however, grew from about 10% to 20%. “We’re far more diverse in Southern Africa compared to global PE firms. It’s a trend that’s added a lot of momentum to the growth of transformation, as Southern Africa has also improved in this metric. Black management meanwhile has decreased slightly, so there’s more transformation in terms of ownership, but there are ups and downs in various areas.” He also pointed out that survey results indicated that the number of firms with over 30% women participation on boards has increased from 28% in 2021 to 42% last year. This follows a decrease from 2020 to 2021. FUNDRAISING & EXITS Survey results also indicated that PE fundraising in Southern Africa witnessed an increase of 21% in 2022, compared with 2021. This took fundraising activities to closer to pre-pandemic levels in 2019, which was contrary to global PE fundraising trends, which decreased by 13%. “In rands and dollar terms, it doesn’t look as good, but Southern Africa is dominated by smaller PE firms so this plays a role”. He also pointed out that 51% of funds raised were from investors outside of Southern Africa, with European and UK investors making up 77% of investments from outside Southern Africa. “For the first time, last year we had more capital coming in from non-Southern African investors than from Southern African investors. Despite all of Southern Africa’s challenges, investors from outside of the region are putting their money into Southern African PE firms.” Study results also showed that contrary to global trends – where PE exits were muted in 2022 – Southern African PE firms witnessed a strong increase in both the value of exit proceeds (breaching the R20-billion level for the first time since 2011), and the number of exits (highest in the last four years). ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/survey-shows-improved-southern-african-private-equity-performance-2023-09-07