THE NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
Question 971
Mr M Mnqasela (DA) to ask the Minister of Trade and Industry:
(1) Whether he has found that black economic empowerment (BEE) has had
any impact on ordinary business people; if not, what is the position
in this regard; if so, what are the relevant details;
(2) Whether only certain people have benefited from BEE; if not, what is
the position in this regard; if so, what are the relevant details;
(3) Whether he intends enhancing the confidence of the small, medium and
micro enterprises in government programmes, including BEE and broad-
based black economic empowerment (BBBEE); if not, why not; if so, what
are the relevant details? NW1171E
Response:
1) BBBEE as a policy has evolved since its adoption by government, and
now the emphasis is on ensuring the broadest possible beneficiary
base of marginalized people, enterprises and regions in our country. It
is the dtiâs view that as the implementation framework and guidelines
for BBBEE including the Codes of Good Practice and sector
transformation charters have been established and became clearer,
compliance with BBBEE policy and legislation is gradually on the
increase. Consequently, ordinary business people are benefiting by
virtue of the preferential procurement and enterprise development
elements of the score-card on which the Codes of Good Practice are
based. However, much more needs to be done in this regard, and this is
one of the key priorities of the dti in the immediate period ahead.
In addition, BBBEE legislation envisages a leading role for the
State and public entities. Two key public entities of the dti, the
National Empowerment Fund (NEF) and the Industrial
Development Corporation (IDC), play a critical catalytic role in
promoting BBBEE, and the revised National Treasuryâs Preferential
Procurement regulationsâ promise to substantively benefit black
owned small and medium enterprises.
(2) At the beginning, the beneficiaries of black economic
empowerment were a few high profile individuals. Since the
emphasis on broad-based BEE through the introduction of the Codes
of Good Practice, other elements of the policy other than
Ownership and Management Control are being actively promoted,
namely, Procurement, Enterprise Development, Skills
Development, Employment Equity and Socio- Economic
Development.
All these elements provide a balanced score-card which seeks to ensure
the broadest possible beneficiary base, including ordinary black
people who are employees or entrepreneurs in different sectors of the
economy.
This shift is gradually becoming a trend as reflected in the recently
concluded BBBEE deals by some major corporates, i.e. SASOL, VODACOM,
Barloworld, and SAB, which are broad-based in structure. These BBBEE
deals include ordinary employees, broad-based schemes, cooperatives,
members of communities, youth, women, and the general public. We are
confident that these deals will translate into meaningful
participation of black people in the economy. Their impact must be
measured in terms of the number of skills facilitated, enterprises and
job opportunities created, which would be in line with the countryâs
priorities.
(3) the dtiâs view is that the confidence of small, medium and micro
enterprises will be enhanced by clear policies and transparent and
consistent rules, as well as effective implementation. the dti has a
leading responsibility in this regard, and it is seized with seeking to
continuously improve products and services to support SMMEs. The
Small Enteprise Development Agency (seda) has been successfully
established, with a presence in all provinces and key municipalities,
and its focus is now on the quality and reach of its products and
services; its coordination with other agencies of the dti offering support
to SMMEs, such as Khula Enteprise Finance Ltd and South Africaâs Micro-
Finance Apex Fund, as well as with provincial departments and agencies
responsible for SMME support.
Improved compliance with BBBEE legislation and the Codes of Good
Practice in both the private and public sectors will strengthen the
supportive environment for the growth of the SMME sectors. For this
reason, the monitoring and evaluation of BBBEE is a key priority in
the work of the dti in this area in the immediate period.
Specifically, preparations are advanced for the establishment of a
Presidential Advisory Council on BBBEE, as provided for in the BBBEE
Act No 53 of 2003.
As already indicated, Preferential Procurement and Enterprise
Development elements of the BBBEE score-card hold major potential to
contribute to the growth of the SMME sector. To this end, work has
been underway in government led by the dti to establish a framework
for targeting particular products and services for preferential
procurement from SMMEs, and for promoting the payment of SMME
suppliers within the statutory 30-day period, to enable the cash flow
in their businesses.