The concept of “Black New Entrants” is found under the Ownership scorecard whereby the Amended General B-BBEE Codes of Good Practice allows for Two Points to be scored based on a 2% Compliance Target.   The definition contained under Schedule 1 of the Amended General B-BBEE Codes of Good Practice  defines “Black New Entrants” as “ Black participants who hold rights of ownership in a Measured Entity and who, before holding the Equity Instrument in the Measured Entity, have not held equity instruments in any Entity which has a total value of more than R50,000,000.00 measured using a standard valuation method.”   Technical Services  are on hand to assist with the understanding of the above and how it is recognised.

Although entering into an Enterprise or Supplier Development loan contract is generally done with the best intentions, some loans issued will inevitably be defaulted on or, in the worst case, a Beneficiary will refuse to repay it. When giving a loan, an organisation has the full rights of recovery; however, this has to be clear in the terms and conditions. First and foremost, a loan must take the form of a debt instrument; thus, it must never be a grant disguised as a loan.   Any loan made with the intention of not receiving repayment of the capital amount is not a loan but a grant and must be claimed as such. Consequently, claiming a loan under Enterprise or Supplier Development instead of a grant is Fronting Practice.   However, if a beneficiary fails to repay a bona fide loan, an organisation may offer a Beneficiary a grant which will allow them to repay the loan. Otherwise, an organisation can write off the loan or follow the legal route based on the terms and conditions of a particular loan.   Enterprise & Supplier Development Services are available to guide Members to ensure their contracts align with the requirements of the relevant code.

A B-BBEE Code of Good Practice is a framework of measurement on how a Measured Entity scores points to achieve a specific B-BBEE Status Level. It consists of all principles, calculations, and methodologies on how this is executed.   As per Clause 3 of Statement 000 of the Amended General B-BBEE Codes of Good Practice , the following is stated:   3.     APPLICATION OF THE CODES   3.1   The following Entities are measurable under the Codes:    3.1.1     all Organs of State and Public Entities;   3.1.2     all Measured Entities that undertake any economic activity with all Organs of State and Public Entities;   3.1.3     any other Measured Entity that undertakes any economic activity, whether direct or indirect, with any other Measured Entity that is subject to measurement under paragraph 3.1.1 to 3.1.2 and which is seeking to establish its own B-BBEE compliance.     Technical Services  are on hand to assist with the understanding of the above.

Andisa Bonani | 18 March 2025 HIRING POLICY: A reviewed draft employment equity policy has been adopted by the  Nelson Mandela Bay corporate services committee DA councillor flags grammatical errors and failure to specify use of provincial demographics. Despite being riddled with grammatical errors, a reviewed draft employment equity policy was adopted at a Nelson Mandela Bay corporate services committee meeting on Monday.  The errors in the document were highlighted by DA councillor Annette Lovemore. She has previously raised concerns about the issue. Lovemore said she did not want to seem to be nitpicking by individually pointing out the errors but something had to be done. “There are also instances where there should be commas. Pointing each one of them out would be time-consuming. “I should file a written submission with all the errors I’ve noted.” Among other concerns, Lovemore said the document should state under the affirmative action header that the city bases its employment equity targets on provincial demographics. The metro’s use of the provincial race demographics has been widely criticised for years, particularly by coloured people. The municipality uses the 2023 employment equity annual report for demographics which shows that 84% of the province’s population is black, 10.4% is coloured, 5.1% is white and 0.5% identifies as Indian or Asian. This demographic is for those who are economically active and does not include metro figures. “It should state that we have chosen to use the provincial demographics because that’s what we have done as a city. “Also, we don’t regularly measure the implementation of our employment equity plan. “If there are five posts that require four women and a man, we don’t go back to look at what we have done. “There is no monitoring which means this is a touch meaningless.” The revised employment equity entails the addition of new clauses including affirmative action and the integration of skills development. Under affirmative action, the report by corporate services executive director Nosipho Xhego, states: “The municipality will adopt affirmative action measures to ensure that suitably qualified people from designated groups have equal employment opportunities and are equitably represented in all occupational levels within the municipality.” To achieve this, the report states the city will undertake measures that include the preferential treatment of designated groups to achieve numerical goals. “As a matter of good practice, deviation from employment equity targets is not encouraged but in exceptional cases where justifiable reasons [are] provided, deviation may be approved by the accounting officer as the head of the administration.” While under the integration of skills development clause, the document states that the city strives to integrate skills development and employment equity policies, strategies and practices. “This will be done by defining short-, medium- and long-term goals to promote transformation within the municipality. “Identifying the necessary training required to achieve employment equity objectives, allocation funds to support this training and monitoring and evaluating progress towards these goals,” the report reads. ANC councillor Lungile Langbooi said it was incorrect of Lovemore to say the city chose to use provincial demographics. “The municipality is simply after legislation and that’s why we use provincial demographics and not the regional [Nelson Mandela Bay] ones as you would like. “So it’s not a choice the city made, the institution is required by law.” Skills development and employment equity deputy director Nofilita Doni said the grammatical errors were embarrassing. “More so because this document was vetted in the COO’s [chief operating officer] office, but we will follow up on this matter.” Responding to concerns about the implementation of the employment equity plan, Doni said there were instances where some executive directors appointed people outside the required employment equity targets. “Executive directors as heads of the different directorates are responsible for the employment of staff in the respective departments, there are those who would do their own thing without applying for a deviation [from the targets]. “The policy now requires the executive directors to be intentional about employing people within the designated groups [such as people with disabilities] especially for office jobs that don’t require them to be physically active in their duties.” ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.theherald.co.za/news/politics/2025-03-18-metro-committee-adopts-revised-employment-equity-policy/

Hanno Labuschagne | 17 March 2025 Starlink is expected to launch a ground station in Mozambique by the end of March, increasing the satellite broadband service’s capacity and reducing latency across Southern Africa. Like other satellite services, the SpaceX-operated Starlink requires ground stations to facilitate backhaul connectivity to Internet servers. Inter-satellite laser communication is used to support connectivity in regions without ground stations. A satellite connected to a customer’s Starlink dish can send and receive data transmissions from and to other satellites within range of a ground station. This capability allows Starlink to provide connectivity across vast areas without ground stations, including the ocean and deserted remote areas. However, the additional time it takes to bounce data between multiple satellites increases latency. Starlink can provide latency between 20ms and 40ms if the user connects to a satellite close to a ground station. When inter-satellite links get involved, the latency is significantly increased. Customers in many Sub-Saharan African countries experienced latency in the triple digits. That includes those using roaming subscriptions to access the service in South Africa, which Icasa technically considers illegal. Speed tests in South Africa typically had between 200ms and 300ms latency when the sole ground station in Africa was in Nigeria. The addition of a ground station in Nairobi, Kenya, in late January 2025 already reduced latency to less than 100ms in some cases. According to the Starlink map, the service’s latency in Kenya has dropped to an average of 23ms to 29ms, while neighbouring South Sudan was getting average pings between 39ms and 57ms. Given the third ground station’s proximity to South Africa, it will likely substantially improve the latency for roaming users. Zambian Starlink kit supplier Stellar Systems recently shared photos of the ground station under construction in Matola, the largest suburb of Mozambique’s capital, Maputo. The images show 16 radomes, weatherproof covers for radio antennas that can communicate with satellites in multiple directions simultaneously. Boosting capacity for new subscriptions The additional ground station could also boost capacity on the Starlink network in Sub-Saharan Africa, enabling the service to reopen sign-ups in broadband-limited cities with high demand. In addition, Starlink plans to reopen new sign-ups for its regional roaming or Roam Unlimited subscription in the region. That option was removed due to capacity constraints and abuse of the service in unsupported countries. Starlink’s official availability date in South Africa has been unknown since late 2022, but roaming has functioned locally since early 2023. Many South African businesses or organisations in remote areas — including farms, charities, schools, and game lodges — have been using the service despite Icasa’s warnings. Some have described the service as a “game-changer,” as other broadband options are not reliable, fast enough, or too expensive. Starlink’s official launch has been complicated by the Electronic Communications Act requiring that telecoms licensees have 30% ownership by historically disadvantaged persons. Icasa has also gazetted a new regulation that will require 30% black-only ownership from licencees. Although this new regulation is currently suspended, it could be implemented at a moment’s notice, with severe consequences for existing licensees. Other international companies typically work with a local partner to ensure compliance with South Africa’s contentious race-based ownership laws. Starlink has a direct-to-customer model for its residential services. By not working through middlemen, it can offer the best possible prices and control the customer relationship. The service launched in two more countries on the continent in 2025 — Liberia and Niger — bringing its total supported African countries to 16. Aside from Mozambique, three of South Africa’s neighbours have launched the service, and the remaining two — Namibia and Lesotho — have estimated launch dates in 2025. While Starlink’s approval is in limbo in South Africa, Icasa’s type-approval list suggests that there were once plans to roll out ground stations in the country. The list includes three Starlink Earth Gateways, all of which were type-approved in 2021. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://mybroadband.co.za/news/broadband/586894-great-news-for-people-using-starlink-in-south-africa-and-neighbouring-countries.html

Justene Smith | 11 March 2025 Diversity, Equity, Inclusion and Belonging (DEIB) are crucial for South Africa’s progress. Amid global challenges, our young democracy must uphold these principles to foster true equality, social cohesion and economic transformation. In a world grappling with political shifts and ideological tensions, Diversity, Equity, Inclusion and Belonging (DEIB) have become more than just corporate buzzwords - they are essential pillars for building resilient, just and progressive societies. As the global landscape changes, particularly with the rollback of DEI initiatives in the United States under the Trump presidency, it is critical to reflect on why DEIB remains a necessity, especially in South Africa. Our young democracy, still navigating the legacy of apartheid, requires sustained and intentional efforts to foster inclusivity in both the workplace and society at large. South Africa: a young democracy in need of DEIB South Africa is a nation still healing from the wounds of apartheid. Despite significant strides in social justice, economic inequality remains rampant and access to opportunities is still largely determined by race, gender and disability status. DEIB is not just a corporate responsibility here - it is a national imperative. 1. The South African Constitution: afoundation for equality At the heart of South Africa’s democracy is our Constitution, widely regarded as one of the most progressive in the world. The Constitution enshrines equal protection under the law for all individuals, regardless of race, gender, disability or background – it recognises the diversity of our people, embracing multiple languages, cultures and traditions while safeguarding the rights of women, the LGBTQI+ community and people with disabilities. The Constitution also provides a framework for a more just and inclusive society,ensuring that DEIB principles are not just aspirational but legally mandated. Upholding these foundational values is essential in combating discrimination and fostering a truly inclusive society. 2. Addressing economic inequality South Africa remains one of the most unequal societies in the world. According to the World Bank, the top 10% of earners take home over 65% of total income, while the bottom 50% struggle to survive on just 5%. Without deliberate DEIB policies, workplaces will continue to mirror these broader societal disparities, limiting economic mobility for historically disadvantaged groups. 3. Inclusive workplaces as a tool for transformation Given our past, many South Africans still experience exclusion in the workplace based on race, gender and disability. While employment equity laws exist, they are often seen as a compliance exercise rather than a meaningful commitment to fostering inclusive environments. True DEIB means moving beyond ticking boxes - it’s about creating workplaces where all employees feel valued, heard and empowered to contribute. 4. The importance of disability inclusion One of the most overlooked aspects of DEIB in South Africa is disability inclusion. People with disabilities face barriers to education, employment and social participation. Despite legislative frameworks like the Employment Equity Act, unemployment rates among people with disabilities remain disproportionately high. Companies must do more than meet quotas; they must invest in real accessibility, workplace accommodations and career development opportunities. 5. Strengthening social cohesion South Africa’s history of segregation has left deep scars. While democracy has brought freedom, true social cohesion remains a work in progress. DEIB initiatives help bridge divides by fostering mutual understanding and respect across different backgrounds. A society that values diversity and ensures equity is one that is more stable, resilient and primed for sustainable growth. Why belonging is the key to long-term change Many DEI efforts focus on representation and equity but often miss the final, crucial piece - belonging. It is not enough to have diverse teams if individuals do not feel included and valued. A workplace that fosters belonging sees higher engagement, innovation and productivity. More importantly, a society where everyone feels they belong is one that can truly heal from its past and build a more just future. Moving forward: what can businesses and leaders do? Commit to meaningful change – Move beyond compliance and embed DEIB into company culture. Invest in skills development – Support initiatives that uplift marginalised communities, especially in education and employment. Champion disability inclusion – Make accessibility a priority, both physically and culturally. Create safe spaces for dialogue – Encourage discussions around diversity and bias to promote understanding. Measure progress – Hold leadership accountable by tracking and reporting on DEIB efforts. At a time when the global DEI movement is under attack, South Africa must reinforce its commitment to diversity, equity, inclusion and belonging. Our nation’s progress depends on it. The challenges of our past should serve as a reminder that without intentional inclusion, inequality will persist and true democracy will remain out of reach. If we are to build a society where everyone has a fair shot at success, DEIB must remain a priority - not just in boardrooms, but across all facets of life. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.bizcommunity.com/article/why-deib-matters-now-more-than-ever-a-south-african-perspective-692981a

Tawanda Korombo | 16 March 2025 Small-scale to medium enterprises play a pivotal role in South Africa’s economy but they may well have been forgotten when Finance Minister Enoch Godongwana delivered his 2025 Budget Speech this week. Shawn Theunissen, the founder of Property Point and eTTP, said the 2025 budget statement “was a missed opportunity to leverage SMEs as a catalyst for economic growth and job” creation. “Instead of bold action, we saw vague commitments and a lack of urgency on the issues that matter most to small businesses,” he said. The 0.5% VAT increase proposed for 2025/26, rising by another 0.5% the following year was expected to add an additional direct financial strain on SMEs. The hike in the VAT rate will increase operational costs for small businesses and further squeeze profit margins at a time when consumer spending is already weak. Worse still, said Garth Rossiter, the chief risk officer for SME services provider, Lula, “there was not one single mention of small business or SMEs” during the Finance Minister’s Budget Speech. This was despite the importance of SMEs within the economy as small business owners make up the biggest employer segment in the country. “They are forced to make job cuts to keep the doors open while public sector wages are increased. This is hard to stomach and particularly tone-deaf,” says Rossiter. Although no formal tax increases were announced, the adjustment of tax brackets for inflation means that individuals will end up paying more. South Africa’s economic environment continued to pose significant challenges for small and medium enterprises, said Rossiter, highlighting that liquidations of SMEs sharply rose last year.   “Liquidations have jumped quite significantly towards the end of last year. We are seeing a lot more businesses applying for business rescue,” explained Rossiter. With the past year marked by stagnant growth, high interest rates, and mounting financial pressures, turnover for small businesses had fallen by more than 50% in the past 12 months. “The past year has been one of survival for many South African SMEs. Economic stagnation, high interest rates, and declining consumer spending have created an unforgiving business landscape. Yet with resilience and strategic financial management, SMEs can position themselves for recovery and future success,” says Rossiter. There were, however, some positives for SMEs in the budget statement. The increased spending on infrastructure was something the SME sector has been pleading for as it contributes to its ability to create jobs and create employment opportunities for South Africa. Others expected the R100 billion Transformation Fund and R20 billion in SME funding initiatives touted in the past few months to be fast-tracked, yet there was no clarity from Treasury on the timelines and accessibility of these funds. Similarly, said Theunissen, the Public Procurement Act (2024), which mandates that 40% of state contracts be awarded to SMEs, was barely addressed. This raised concerns that SMEs will continue to be excluded from government procurement opportunities, with large corporations dominating the bidding process and corruption continuing. “Government procurement should be a growth driver for SMEs, but without clear implementation measures and strict enforcement of payment timelines, it remains a broken system,” said Theunissen. Delays in government payments to SMEs remain a major challenge, despite past promises to enforce the 30-day payment rule. This issue has been raised repeatedly in previous Budgets, yet many small businesses continue to experience long waits for payments, leading to severe cash flow constraints. SME White Paper A new white paper released this week by Lula, titled SME Survival in a Harsh Economic Climate: The State of South African SMEs in 2025 , says these enterprises face a persistent credit crunch, with SMEs grappling with high borrowing costs stemming from elevated interest rates earlier in 2024. Despite the South African Reserve Bank (SARB) initiating rate cuts later in the year, the relief comes too late for many businesses already saddled with debt, the paper shows. High levels of gearing have left SMEs vulnerable to interest rate swings, forcing them to pay a premium on loans taken to cover stock, materials, or operational expenses. This financial strain has been compounded by a low-inflation environment, pushing businesses to slash prices or write off debts, further eroding their margins. The white paper also flags a troubling rise in debtor days, now at their highest since quarter two 2022, signaling delayed cash flows that stifle SMEs’ ability to reinvest in growth or innovation. Unlike larger corporates with the leverage to enforce quicker payments, SMEs lack the clout to expedite collections, leaving them in a precarious double bind. The report also says SMEs have a unique economic cycle, where recovery tends to lag behind that of consumers, a dynamic worsened by the prolonged financial stress of 2024. While the SARB’s rate cuts offer a glimmer of hope, the depth and speed of these reductions will determine whether SMEs can claw back stability in an economy still reeling from structural challenges. Looking ahead, the paper says the formation of a Government of National Unity following last year’s elections has bolstered investor sentiment, while planned infrastructure investments could unlock opportunities in sectors like construction and manufacturing. Yet, uncertainty looms large, reflected in divergent GDP growth forecasts for 2025: the IMF projects 1.5%, Investec sees around 2.0%, and PwC offers a range of 0.5% to 1.3%. This points to modest growth ahead, which is a potential lifeline for SMEs. However, the path to recovery hinges on deeper rate cuts and sustained policy support to ease the credit squeeze and restore cash flow confidence, the white paper notes. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/entrepreneurs/sa-budget-2025-smes-left-in-the-cold-as-vat-hikes-loom-895e2582-8507-40ab-81f5-3450e29439e8#:~:text=The%200.5%25%20VAT%20increase%20proposed,consumer%20spending%20is%20already%20weak .

Rising Sun Online | 10 March 2025 The six top achievers who each received a laptop, along with a cash donation and other stationery items were Luthando Mbatha from Impoqabulungu, Ziyanda Ndlovu and Sandisiwe Ngcobo from Tugela Secondary, Senzokuhle Makhanya from Stanger South Secondary and Ashley Gumede and Neliswa Ndlovu from Groutville High School. It was back to school with a bang this year for many of Sappi’s neighbouring schools in the Ilembe region in northern KwaZulu-Natal, thanks to Sappi’s impactful ‘Back to School’ paper donation and matric excellence campaign. Reaffirming its commitment to education as a catalyst for long-term growth, Sappi has once again provided vital educational resources to schools in and around the communities neighbouring their Stanger and Tugela Mills. Between the two areas, the company distributed 18 tons of much-needed Sappi Typek paper – which translates to 1, 680 boxes, or 6, 400 reams at recent handover events held at the schools and at the mills. This initiative has lessened the burden of purchasing paper for the 52 schools that received these donations, benefiting thousands of pupils, who now have access to other essential educational support and tools. These handovers form part of a greater countrywide initiative, targeting Sappi’s communities adjacent to their manufacturing and forestry sites. In total, the company will be providing 72 tons of paper – or 6, 000 boxes or 30, 000 reams – to neighbouring schools through this campaign. The initiative has been met with widespread enthusiasm from teachers, pupils, and community stakeholders. All have acknowledged the critical role Sappi plays in narrowing educational disparities and driving social transformation by continuously investing in youth development. Sappi is not just addressing immediate academic needs but fostering a culture of excellence, innovation, and opportunity. Speaking at the event, the mayor of Mandeni, Cllr Thabani Mdlalose commented, “Sappi is a pillar in our society and their commitment to improving our region’s educational standards has been witnessed time and again through initiatives like these. We applaud them and thank them for what they do for our youth and look forward to our continued collaboration going forward.” Taking its commitment a step further, Sappi has recognised academic excellence by awarding six high-achieving 2024 matriculants with laptop starter packs as they transition to university. These technology-driven resources serve as a bridge to higher education, empowering students to embrace the digital age with confidence and competence as they shape their futures. Education remains a strategic pillar of Sappi’s social impact strategy, aligning with its overarching vision of sustainability, empowerment, and socio-economic advancement. Through interventions like these, Sappi actively builds capacity within communities, unlocking the potential of future leaders and driving progress where it matters most. “This initiative is more than a donation, it is a bold statement of intent, a powerful demonstration of Sappi’s unwavering commitment to shaping a brighter, more inclusive future. When communities are empowered through education, it creates a lasting impact, ensuring prosperity for generations to come,” said Beryl Traoré, social impact lead for Sappi Southern Africa. The Typek paper, manufactured at the Sappi Stanger Mill in KwaZulu-Natal, is renowned as a superior quality A4 office paper, known for its brightness and printability. Not only is it renewable and recyclable, but it is also unique in that bagasse (sugarcane waste) is used in its production process. This quality product embodies Sappi’s commitment to environmental sustainability whilst aligning with Sappi’s dedication to making meaningful social impact by supporting Sustainable Development Goal 4 (SDG4), which strives towards Quality Education. The six top achievers who each received a laptop, along with a cash donation and other stationery items were Luthando Mbatha from Impoqabulungu, Ziyanda Ndlovu and Sandisiwe Ngcobo from Tugela Secondary, Senzokuhle Makhanya from Stanger South Secondary and Ashley Gumede and Neliswa Ndlovu from Groutville High School. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://risingsunnewspapers.co.za/307677/back-to-school-with-a-bang-for-ilembe-region-schools-thanks-to-sappi/

Staff Reporter | 12 March 2025 There has been an ongoing narrative that there is a shortage of artisans in South Africa. Some in the industry may argue that the issue is not the lack of artisans but rather that qualified artisans are unable to find employment. In efforts of addressing the issue of a shortage of qualified artisans and employment, Anglo American Zimele, in partnership with the Artisan Training Institute (ATI), recently launched an artisanal skills development programme aimed at youth from their host communities in the Northern Cape. The three- to four-year programme began in November 2024 and will train 75 young people from the communities around Kumba Iron Ore’s Sishen and Kolomela mines. The programme combines institutional and workplace learning at ATI’s fully accredited Kimberley campus where candidates are trained in nine essential trades, including auto electrical, heavy equipment mechanics, and instrumentation. Successful graduates will receive internationally recognised Red Seal Certificates from the Department of Higher Education and Training. All the accredited engineering trades will meet a minimum of NQF level 4 status, positioning them for careers in various industries. “We believe in the transformative power of partnerships to truly drive meaningful and sustainable change in people’s lives,” said Larisha Naidoo, head of Anglo American Zimele. “What sets this programme apart is its comprehensive approach to skills development. Beyond technical training, we’re providing full accommodation, meals and transport support to ensure our learners can focus entirely on their development.” The programme demonstrates Anglo American’s ongoing commitment to sustainable community development and economic transformation in its operating regions, where skills development plays a crucial role in breaking the cycle of unemployment and creating sustainable livelihoods. The initiative directly supports key objectives of South Africa’s National Development Plan (NDP) 2030, particularly its goals for economic transformation and job creation. Zimele’s approach to youth development is job-centric which focuses on 30% training, 40% support and 30% effectiveness on the job in efforts of opening pathways beyond mining. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/economy/artisan-skills-training-programme-introduced-to-help-bridge-the-youth-employment-gap-e9f4d8eb-920c-43ca-b344-c0dfbb9b54b9

Staff Writer | 12 March 2025 The Minister of Trade, Industry, and Competition, Parks Tau, said the new R100 billion Transformation Fund will give black-owned enterprises access to funding. He provided details about the Transformation Fund in response to a parliamentary question from Thokozani Makhosonke Langa. The R100 billion fund rose to prominence last year after Toby Chance, DA spokesperson on trade, industry, and competition, sounded the alarm about the new fund. Chance warned that the R100 billion transformation fund risks being a slush fund and is open to abuse by connected politicians. He likened it to South Africa’s R500 billion coronavirus funding, which was rife with corruption, fraud, and looting. “Not only does the DA reject race-based legislation, but BBBEE has proven counterproductive in closing our inequality gap,” Chance said. He added that most black empowerment funding does not stimulate high-growth enterprises in South Africa. Another controversial part of the R100 billion transformation fund is how it will be funded, considering businesses are already overtaxed. Tau wants South African businesses to pay 3% of their annual net profit after tax for a new R100 billion transformation fund. In response to Chance’s question, Tau told parliament that money for the fund would be raised according to the BBBEE codes of good practice. Another funding source will come through the Competition Commission’s public interest participation. “Entities are obliged under the BBBEE codes of good practice to contribute an equivalent of 3% of annual net profit after tax for the development of black suppliers,” Tau said. “Entities will be required to contribute to the transformation fund for compliance with the enterprise and supplier development element.” He explained that the BBBEE codes of good practice make provision for multinational entities to comply with ownership elements. This includes setting aside funds, 25% of the value of their South African operations, for transformation purposes. “Therefore, funds from the equity equivalent investment programme will form part of the transformation fund,” Tau said. President Cyril Ramaphosa promoted the controversial R100 billion black economic empowerment fund during his State of the Nation Address. “We will set up a transformation fund worth R20 billion a year over the next five years to fund black-owned and small enterprises,” he said. R100 billion Transformation Fund details Langa asked Minister Parks Tau for a detailed breakdown of the R100 billion Transformation Fund and how he will ensure the money reaches the intended beneficiaries. Tau responded , saying the fund will be administered through a partnership between the private and public sectors. He added that the Transformation Fund will have a governance structure consisting of a board and oversight committees. The Minister explained that Section 9(2) of the Constitution places a collective burden on all to advocate for equality and redress. He said the constitutional undertaking is given legislative impetus through Section 2(h) of the B-BBEE Act. This obliges the government to “increase the effective economic participation of black-owned and managed enterprises”. He added that it includes small, medium and micro enterprises and co-operatives and enhance their access to financial and non-financial support. “The Transformation Fund is established to address access to funding for black-owned enterprises and SMMEs,” Tau said. “This will increase their economic participation and income-earning potential in line with the Constitution.” It will be achieved by aggregating various funds, such as the Enterprise and Supplier Development contributions and the Equity Equivalent Investment Programme. R500 million fund to support and assist spaza shops in rural areas The R100 billion Transformation Fund is not the only initiative to assist black businesses in South Africa. On 3 March 2025, the Minister of Small Business Development, Stella Ndabeni-Abrahams, launched a R500 million fund to support spaza shops in rural areas. Ndabeni-Abrahams said the Spaza Shop Support Fund will bolster the competitiveness of spaza shops and help them compete with larger retailers. She explained that the fund will provide financial and operational support to township convenience stores. “The fund will be launched in the next two weeks, and the exact date will be communicated,” she stated. The initiative will be jointly funded by the Department of Small Business Development (R150 million) and the Department of Trade, Industry and Competition (R350 million). “The fund aims to boost economies of scale by linking spaza shops and food-handling outlets with buying groups for bulk purchasing,” she said. “It will strengthen business operations through training and support, improving their overall market competitiveness.” She told parliament that the R500 million had not yet been disbursed because Spaza Shops first had to be registered. The registration process, which ended on 28 February 2025, helped to determine the extent and type of support required by their owners. “This information was essential to design appropriate support mechanisms tailored to their needs,” she said. Now that the registration process has been completed, the fund will soon be open for applications. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://businesstech.co.za/news/business/816404/r100-billion-fund-for-black-businesses-in-south-africa-here-soon/

Kebalepile Matlhako | 12 March 2025 One of the lies that is perpetually being echoed is that “Broad-Based Black Economic Empowerment (B-BBEE) does not work”. I disagree, B-BBEE does work. My argument is that people who benefit from the injustice of exclusion, and feel they lose power, are the ones who will continue to spread the lies and myths so they can continue to benefit exclusively. Steve Biko argued that true freedom could only be achieved once Black People realised that “the most potent weapon in the hands of the oppressor is the mind of the oppressed”.  By challenging the premises and forces that created identities of inferiority and helplessness, Black People, and previously marginalised people, can free themselves from the shackles of poverty and lack of access to the mainstream economy. For me, this suggests there is no saviour for the poor, but they themselves, through how they perceive themselves as equal participants of the economy and not merely consumers. Much as the argument of social engineering of apartheid carries some weight, there is enough evidence that, with some support and proper policy framework, more Black People can and have managed to become active players in the mainstream economy. We need a significant number to be actively involved, but the lens-mind of the oppressed needs to be decisively dealt with in order to move the needle. Biko’s quote reminds us that the most effective way to fight injustice is to help people see through the myths and lies that are used to keep them in their place, they can understand the real causes of their oppression and the power they possess to overcome it. The recent announcement by Parks Tau, Minister of Trade, Industry and Competition (dtic) on the formation of a R100bn Transformation Fund aimed at providing support towards black-owned Small, Medium and Micro Enterprises (SMMEs) raised many objections from numerous quarters; some call it ill-advised, vague, poorly conceived, unrealistic, a risk that may encourage corruption and mismanagement, while the Institute for Race Relations referred to it as unconstitutional and may cause enormous harm to the economy. Are these the myths and lies that seek to keep Black People in their place? Minister Tau, in announcing this policy direction, indicated that the Fund also reflected the statement of intent of the Government of National Unity (GNU), which emphasised fostering a redress and inclusive economic growth. True as it may be, the devil is always in the detail, and we eagerly wait for that detail. The GNU’s transformative agenda seeks to dismantle systemic barriers to economic participation, ensuring that historically disadvantaged communities are afforded equal opportunities to thrive in all sectors of society. Rapid, inclusive, and sustainable growth remains at the apex of the priorities of the GNU. “Through collaboration with the private sector, civil society, and other stakeholders, we will create an economy that is inclusive, sustainable, and reflective of South Africa’s diversity,” Tau asserted. In his State of the Nation address, the President echoed the aims of the Transformation Fund and its role in seeking to achieve inclusive and sustainable growth. So, let us rest assured that the Transformation Fund will be in place by 2026 as targeted. The media release from the Ministerial Spokesperson, Yamkela Fanisi, on the 24 January 2025 highlights the Objectives of the Transformation Fund, as follows: 1. Promotes Economic Inclusion : Provides financial and non-financial support to Black-Owned enterprises, ensuring meaningful participation in the economy. 2. Addresses Fragmentation: Aggregates resources from existing Enterprise and Supplier Development (ESD) obligations and other sources to enhance the Fund’s impact and efficiency. 3. Fosters Sectoral Growth : Focuses on high-impact sectors, including agriculture, tourism, ICT, manufacturing and businesses in township and rural areas. 4. Enhances Market Access : Offers technical assistance, pre-and post-investment support, and market access opportunities to beneficiaries. 5. Supports Industrialisation: Aligns with South Africa's industrial policy to stimulate growth in productive sectors and underdeveloped areas. These objectives, noble as they are, are almost similar to the Automotive Industry Transformation Fund (AITF), which is a success despite all the challenges, myths and lies. The AITF is a good case study that demonstrates that with the right will and best approach, that of market access, Transformation Funds can work. If one were to wonder, where does this Transformation Fund idea come from, I will refer you to the final report of August 2022, “DETERMINING THE EFFECTIVE IMPLEMENTATION OF ENTERPRISE AND SUPPLIER DEVELOPMENT FUNDS” published by the B-BBEE Commission. The Accounting Officer of B-BBEE Commission, in his foreword states: “In this regard, the study recommends among others that ESD funds be pooled into a central fund, with a governance framework similar to the Solidarity Fund that was created to assist with responding to the Covid-19 pandemic. As part of this, a register or database of vetted Black-Owned enterprises that qualify under the ESD element could be created, to enable the funding to be better targeted and more impactful than has been the case overall.” While political parties and civil society continue to lambast the Minister when he announced the policy intent to form the Transformation Fund, it seems at least to me, that this topic was on the agenda in 2022, long before Parks Tau was the Minister, moreover, it is congruent with the priorities of the GNU and based on a study of the ESD landscape. The Competition Commission in awarding or endorsing mergers and acquisitions and to protect the public from monopolistic behaviour, it will normally instruct companies, as a condition, to set up funds that are aimed at creating an inclusive and diversified supply chains. These funds have not been effective, in fact, most have missed their deadlines while companies continue to benefit. Some even complain about the lack of capacity to deliver on the mandate which they have agreed to be conditional to the transaction. The same challenge is met through the Equity Equivalent Investment Programmes where most companies, who were awarded B-BBEE Ownership points through this mechanism, struggle to meet their own set of performance targets of creating inclusive growth. We also note the existence of several ESD funds providing little value to the beneficiary while most of the value vests with the respective fund managers and intermediaries, and as a concern, the beneficiaries do not experience financial and operational independence. With a reported R26bn available per annum to support Black-Owned SMMEs, it is amiss that the dtic reports that as a country 70% of SMMEs fail within the first 24 months.  It therefore makes sense to pool these funds together to create impact.  However, we must remain vigilant in ensuring that this will not be another failure story. As an Environmental and Social Governance (ESG) and B-BBEE specialist, I fully support the ESD Transformation Fund approach to stop the leakage and avoid excuses of a lack of capacity for it to be implemented. We know that the problem lives with the will to create inclusive economic growth and address the mental slavery of the oppressed. I would further urge other stakeholders to continue to hold the powers that be accountable. We as the BEE Chamber, will continue to provide guidance, support and the required criticism and solutions where necessary to ensure we create an environment of inclusive growth where the marginalised become active participants in the creation of value and benefit equitable in the rewards from that value creation. In this way, we will dispel the myths and lies that seek to perpetuate exclusion of the majority from participating in the mainstream economy of the country.  After all, when the Fund works well, our South African economy will grow in an inclusive manner and the demand for products and services will also increase and ultimately benefit all equitably, including those who continue to complain. This will go far in realising the true freedom that Biko was referring to. We look forward to participating in the formation of the ESD Transformation Fund. https://www.engineeringnews.co.za/article/can-the-r100-billion-esd-fund-work-yes-it-can-2025-03-12

Makone Maja | 11 March 2025 This week, the Institute of Race Relations (IRR) will be writing to key state ministries to ask hard questions South Africans deserve real answers to. Beyond the grandstanding and political games, it is time for answers about foreign businesses and investment opportunities the country has lost due to the barriers of BEE laws. Says IRR Strategic Engagements Manager Makone Maja: “From the IRR’s calculations and estimates, the potential missed investment injections likely represent tens of thousands of unemployed South Africans who could have been placed in jobs, and families lifted out of poverty. This represents development gone down the drain that could have taken place in key sectors where skills transfers, and booming expansion of infrastructure, would massively transform key sectors in the country.” The ministries the IRR will engage with on this matter include Employment and Labour, Trade, Industry and Competition, Small Business Development, and International Relations and Cooperation. These ministries oversee and administer the bulk of policies that have substituted the real empowerment that jobs offer with the hollow empowerment of BEE and its impact on the scale of multinational corporate activity in the country, in one way or another. Says Maja: “The case of Starlink, recently prominent amidst tensions between Washington and Pretoria, exemplifies how BEE sacrifices the underprivileged on the altar of transformation. While other African countries that are similarly desperate for affordable internet access were selling out Starlink kits and rapidly expanding their online access, our government was turning this offer down under the guise of 'broad-based' empowerment of black people.” After more than two decades of BEE, it is long overdue for the government to provide answers on the cost of its own policies – particularly given that most examples of the barrier BEE raises do not gain the same publicity as the Starlink saga has. South Africans deserve answers from the government on how many companies and businesses capable of crucial investments have been cynically denied value-add entry to the economy. Such investment could in the short term have created the jobs people need to earn a living and feed their families, and, in the long term, facilitated the development of critical infrastructure and much needed market competition. Illustrating the human cost of BEE in the example of Starlink, it is no coincidence that the poorest provinces, the Eastern Cape and Limpopo, also have the least internet access, according to the Statistics South Africa General Households Survey of 2023. These provinces also come last in having access to public Wi-Fi, which speaks to a lack of political will or state action to improve internet access for the impoverished, rural communities that make up the highest share of the poor population of the country. “True economic empowerment would address these challenges instead of perpetuating the wealth disparities which BEE undeniably worsens. The BEE road to hell, perhaps once paved with good intentions, can no longer claim a destination of upliftment and prosperity. From the answers to the questions the IRR will put to key ministries, South Africans will be able to see for themselves how, when faced with choosing either Blatant Elite Enrichment for a few connected cadres or genuine upliftment for millions, the government has time and again chosen to keep aspirant job-creators and job-seekers trapped in poverty only to further enrich those at the top.” ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.politicsweb.co.za/politics/how-many-potential-jobs-has-sa-lost-over-bee--irr