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BBBEE Commission to monitor and advocate 40% set aside rule

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BBBEE Commission to monitor and advocate 40% set aside rule

30th August 2021

By: Yvonne Silaule
Contributor

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The Broad Based Black Economic Empowerment Commission (BBBEE Commission) recently hosted its annual Women’s Economic Empowerment webinar to commemorate Women’s Month with the aim of looking at solutions to unlock constraints on women economic empowerment.

This year marks the sixty-fifth anniversary of the 1956 Women’s March as the country pays tribute to the efforts of women who took part in the protest against unjust and exclusionary laws. This year also marks the eighteenth anniversary since the enactment of the BBBEE Act.

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The webinar focused on the accountability of both the private and public sector for the stagnant pace of economic empowerment of women.

According to the BBBEE Commissioner Zodwa Ntuli the focus for the BBBEE Commission this year is on enterprise and supplier development.

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“The 2020 National Status and Trends Report of the BBBEE Commission shows that black women make up 15% in ownership, a very low state of representation given demographics of South Africa although a slight increase is noted. Representation on boards of JSE listed entities for black women is at 11%. The country has regressed in regard to board representation on the JSE which continues to be dominated by white people and foreign nationals,” she said.

The focus on enterprise and supplier development, she added, is an opportunity that exists within the framework of BBBEE to ensure that the public and private sectors support the development of black-owned businesses in South Africa.

“Enterprise and supplier development is divided into three sub-elements including preferential procurement, where and with who the companies are spending their money. For this, as a commission, we will do a follow-up and ensure the [implementation of the] set-aside rule set by the President in 2020 where both private and public entities are required to spend 80% of their procurement spend on BBBEE-compliant entities, with 40% placed on the 51% black-owned business with immediate effect. We see an opportunity for black women to play a significant role and therefore we will advocate for and monitor this,” Ntuli said.

Ntuli said that with supplier development, both private and public entities would be required to spend 2% of their net-profit after tax, and for government it will be 0.2% of their allocated budget, from the monies spent annually to support black entrepreneurs who are in their supply chain to make sure that they grow and move into other avenues and to supply more entities than they currently supply.

She further said that the enterprise development element requires that private entities must spend 1% of their net profit after tax, while public entities required spending 0.1%.

“The entities must spend that in identifying black entrepreneurs that are not in their supply chain, in order to develop and get in to the supply chain. The entities are given bonus points on their score cards if the person they have identified from an enterprise development perspective graduates to become a supplier. This is intended to facilitate availability of financial support as well as non-financial support from current and existing businesses and public sector entities to support black entrepreneurs,” she explained.

Ntuli said entities needed to use the enterprise and supplier development strategy correctly by advertising the supplier opportunities openly.

“Most women are not aware of such programmes because a number of entities use consultants to scout for black business women, but that kind of mechanism ends up benefiting a few people and a large portion of black women are left uninformed,” she said.

She appealed to the private and public sectors to create mechanisms for ensuring that opportunities are advertised so that more women benefit and can make applications that are objectively assessed.

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