Broad-Based Black Economic Empowerment (B-BBEE) has become an integral part of doing business in South Africa. As such, it is important for you to have a thorough understanding of what it means, in terms of how it is measured, and the implications it has for you and your business. This article unpacks the concept of B-BBEE and looks at how a business’s B-BBEE status is measured using B-BBEE scorecards. It is national legislation and not only a policy! Stop Racism and Discrimination against White minority people in South Africa.
Swart bemagtiging is nie een of ander programmetjie of beleid nie, dit is WETGEWING wat daagliks op nasionale vlak toegepas word teenoor blankes om teen hulle te diskrimineer.
Daar is ‘n groot verskil tussen PROGRAM of BELEID en Nasionale wetgewing. STOP RASSISME EN DISKRIMINASIE teenoor blankes en blanke besighede. Alle provinsies moet Nasionale wetgewing uitvoer.
The B-BBEE compliance levels of all Qualifying Small Enterprises are also measured using the Generic Scorecard. However, while Generic Enterprises qualify for bonus scores, QSEs do not. QSEs are required to comply with all five elements of the scorecard. However, unlike Generic Enterprises, it is only mandatory for QSEs to achieve a minimum target of 40% for two of the three priority elements – one of which being Ownership and the other being a choice between Enterprise and Supplier Development or Skills Development.
What Is B-BBEE?
The main aim of the Broad-Based Black Economic Empowerment Act (no. 53 of 2003, later amended as the Broad-Based Black Economic Empowerment Amendment Act, no. 46 of 2013) is to ensure the advancement of economic transformation and the enhancement of the economic participation of black South Africans, where “black” is inclusive of Africans, coloureds, and Indians. B-BBEE, as a concept, can therefore be understood as the result of this act and the presence (or level) of economic empowerment and participation (of racial minorities) in an enterprise. In practise, this often translates to the number of “black people” who are gainfully employed by or are legitimate shareholders in an enterprise.
How Do You Measure B-BBEE?
The B-BBEE Codes of Good Practice (gazetted in February 2007) stipulate that the B-BBEE compliance level of all enterprises operating within South Africa should be measured using an identified framework. This framework will depend on the classification of the enterprise. There are three broad classification according to which an organisation may be categorised:
- Exempted Micro-Enterprise (EME): This refers to any enterprise that earns an annual turnover of R 10 000 000 or less. Start-up enterprises (in their first year following their formation or incorporation) also qualify as EMEs.
- Qualifying Small Enterprise (QSE): This refers to any enterprise with an annual turnover of between R 10 000 000 and R 50 000 000.
- Generic Enterprise: This refers to any enterprise with an annual turnover of more than R 50 000 000.
Once you have determined into which classification your enterprise fits, its B-BBEE compliance can then be measured based on the applicable scorecard with which it is associated.
Measurement Of Enterprises
As mentioned above, an enterprise’s B-BBEE compliance is determined by the score or rating it achieves when measured using its applicable scorecard. These scorecards are included and discussed below, according to their associated classification.
Of the three classifications, the B-BBEE compliance of EMEs is not measured using a scorecard because EMEs are considered, by default, as “Level Four Contributors”, with a B-BBEE recognition level of 100%. There are, however, exceptions to this general rule:
- If an EME is 100% black owned, it qualifies as a “Level One Contributor”, with a B-BBEE recognition level of 135%.
- If an EME is at least 51% black owned, it qualifies as a “Level Two Contributor”, with a B-BBEE recognition level of 125%.
Over and above this, EMEs are required to obtain and submit a sworn affidavit annually confirming an annual total revenue, allocated budget, or gross receipts of R10 million or less, as well as the level of the percentage of black beneficiaries of the enterprise.
A Generic Enterprise’s B-BBEE compliance is measured using the Generic Scorecard. The Generic Scorecard is based on five elements each of which has an assigned weighting (iwhich correlates with the importance of that specific element) and a set target. The five elements are:
- Equity Ownership
- Management Control
- Skills development
- Enterprise and Supplier Development
- Socio-Economic Development
The elements and their associated weightings can be seen in the Generic Scorecard table below. The compliance levels of all enterprises classified as Generic Enterprises are measured using said scorecard.
Ramaphosa address the government’s plan to combat the spread of the coronavirus on 23 March 2020. A Nationwide lockdown. Ramaphosa met earlier on with business leaders at the Union Buildings in Pretoria to discuss the affect the disaster is having on businesses and the economy at large. He has also consulted faith leaders and politicians since his declaration on March 15 of the national state of disaster.
Speech from President of South Africa notes.
Government of South Africa declared a National State of Disaster
The Department had a budget of R8.15 billion over the MTEF period. Specifically, R2.57 billion was allocated to the Department for the 2019/ 20 financial year. Most of the allocation would go toward economic development. For the 2019/ 20 financial year, SEFA, SEDA and the Department got transfers of R1 billion, R870 million and R460 million, respectively.