On 30 May 2022, President Cyril Ramaphosa announced the appointment of a new Broad-Based Black Economic Empowerment ("B-BBEE") Advisory Council which was originally formed by former President Jacob Zuma with an aim to "champion the cause of economic transformation" in South Africa.
The new members of the council have been appointed by President Ramaphosa in an effort to correct inequality, ensure meaningful participation by Black people in the economy, further develop Black businesses and promote an inclusive model of economic growth which shares wealth.
The council is established in terms of section 4 of the B-BBEE Act, 2003 with the purpose of providing guidance and overall monitoring on the state of B-BBEE performance in the economy. The council also has the power to make policy recommendations in order to address challenges in transforming the South African economy.
President Ramaphosa appointed the new council members in terms of section 6(1)(c) and (d) of the Act, who will serve for a period of five years.
The council consists of members in government, business, members of the labour sector and other stakeholders with an interest in B-BBEE. Factors such as provincial representation, sector expertise, age and gender were taken into account when appointing the new council members. In line with the government's transformation efforts, eight of the 14 newly appointed council members are women.
The primary functions of the council are to:
- advise government on B-BBEE;
- review progress in achieving B-BBEE;
- advise on draft codes of good practice, which the Minister of Trade, Industry and Competition intends publishing for comment in terms of section 9(5) of the Act;
- advise on the development, amendment or replacement of the B-BBEE strategy referred to in section 11 of the Act;
- advise on draft transformation charters upon request; and
- promote partnerships between organs of state and the private sector that will advance the objectives of the Act.
President Ramaphosa noted in his council appointment announcement that there has been much regression in terms of Black management control, upscaling skills development, entrenching enterprise development and widening procurement to provide opportunities to Black women and the youth.
As such, the council will bear the responsibility of working to improve the government's transformation and B-BBEE efforts.
President Ramaphosa also noted in his announcement that the council will work to remedy the lack of progress in terms of improving the low level of participation in the economy almost three decades after the end of apartheid. He mentioned that at the end of apartheid, less than 1% of companies listed on the Johannesburg Stock Exchange were Black-owned and this number has not increased much in the last 28 years.
Black-owned businesses presently face many challenges in the economy such as gaining access to start-up and expansion capital, and difficulty of finding viable markets for small, medium and micro enterprises to sell their products. Black women-owned businesses also face difficulties in successfully negotiating and engaging in empowerment transactions on a large scale.
The council will be tasked with advising government on B-BBEE initiatives to ensure that such challenges will be alleviated and that Black businesses gain access to a large share of the South African economy.
With the added economic impact of the COVID-19 pandemic and the economic challenges South Africa is facing generally, many Black-owned businesses have been adversely affected by the pandemic and subsequent lockdowns.
It is clear that the council has an opportunity to play a crucial role in the long-term recovery, reconstruction and the meaningful transformation of the economy.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.