Title: BEE The Transformation Imperative
1(No Transcript)
2BEE The Transformation Imperative
3BEE Why is it necessary?
- Apartheid systematically and purposefully
restricted the majority of South Africans from
meaningful participation in the economy. The
assets of millions of people were directly and
indirectly destroyed and access to skills and to
self-employment was racially restricted. The
accumulation process under Apartheid confined the
creation of wealth to a racial minority and
imposed underdevelopment on majority black
communities. The result is an economic structure
that today, in essence, still excludes the vast
majority of South Africans.
4BEE Who is Black?
- A generic term Indigenous Africans, Coloureds,
Indians. - Black Enterprise 50.1 owned by black
persons/substantial control - Black Empowered Enterprise 25.1 owned by black
persons/control - Black woman-owned enterprise 25.1
representation black woman - Community or broad based enterprise empowerment
shareholder representing a broad base of members
such as local community, black woman, people with
disabilities, or youth groups, significantly
comprising of black persons -
Extract from Department of Trade and Industrys
Strategy for BEE - April 2003
5BEE Survey - Key Points
- Policy objectives of BEE
- Key Principles of BEE
- Policy instruments to achieve BEE
- Financial support from government for BEE
- BEE Achievements and Lessons Learned
- Comparing our procurement policies with world
standards - Importance of Buy-in from Top Management
6Policy Objectives of BEE
- A substantial increase in the number of black
people who have ownership and control of existing
and new enterprises. - A substantial increase in the number of black
people who have ownership and control of existing
and new enterprises in the priority sectors of
the economy that government has identified in its
microeconomic reform strategy. - A significant increase in the number of new black
enterprises, black empowered enterprises, and
black-engendered enterprises.
7Policy Objectives of BEE
- A significant increase in number of black people
in executive and senior management of
enterprises. - Accelerated and shared economic growth.
- Increased income levels of black persons and a
reduction of income inequalities between race
groups. - An increasing proportion of the ownership and
management of economic activities vested in
community and broad-based enterprises (such as
trade unions, employee trusts, and other
collective enterprises) and co-operatives.
8Key Principles of BEE
- Black Economic Empowerment is broad-based
- Black Economic Empowerment is an inclusive
process - Black Economic Empowerment is associated with
good governance - Black Economic Empowerment is part of our growth
strategy - Wealth accumulation must come from both existing
economic activity and new economic activity - An effective and successful process of BEE and
accelerated economic growth and mutually
reinforcing objectives
9Policy Instruments to Achieve BEE
- Government use a number of policy instruments to
achieve its objectives in respect of BEE.
Government seek partnerships with the private
sector to accelerate the BEE process. - Legislation Broad Based BEE Billestablish
framework - Regulation Various regulatory means
- Balance Scorecardmeasure progress/basic
framework - 3 core elements (direct empowerment, HR
development and employment equity, indirect
empowerment preferential procurement and
enterprise development
10Financial Support from Government
- R2.2 billion was allocated to fund BEE
initiatives for 2002/03 financial year. (Ntsika,
Khula, IDC, DBSA Land Bank) - Isibaya Fund contributed R321 million, Umsombomvu
Fund contributed R461 million and DBSA
contributed R1.4 billion to the revenue of low
income households 2000/2002 - Khulas contributions to empowerment and SMME s
of R1.3bn - 79 were to BEEs
- 56 to women-owned enterprises
- 71 to urban enterprises
- 29 to rural enterprises
11BEE Achievements
- The IDC has financed over 690 empowerment deals
worth more than R6.6 billion. - Increase in empowerment funding rose from three
deals in 1990 to a peak of 191 deals in 2002,
about 37 of the total number of approvals. - Past 5 years to December 2002, increase in
empowerment funding from 14 in 1998 (R56.4M) to
39 (R1.2billion). - Sectoral spread manufacturing, communications,
mining, quarrying, retail and wholesale trade
12BEE Initiatives since 1994
- The Integrated Human Resources Develop Strategy
- Urban Renewal Programme
- Integrated Sustainable Rural Development
Programme - The Tourism Transformation Strategy
- The Strategic Sector Plan for Agriculture
- The National Small Business Development Promotion
Programme
Department of Public Service Administration
Vol2. Ed03 2003
13BEE Achievements
- All BEE approvals during 1990-2002, 78 (R4.71bn)
high impact sectors compared to 4 (R0.23bn)
low. - Central objective of RDP was to de-racialise
business ownership and control completely,
through focused policies of black economic
empowerment - The private sector embarked on several BEE
initiatives in the 1990s. In 1993, Sanlam sold
10 of its stake in Metropolitan Life to a
black-owned consortium. This was followed by
ABSA, Afrox-Health, Mvelepanda, MTN, African
Rainbow Minerals, Harmony.
14Comparing our preferential procurement policies
with world-wide standards
- No study or research - preferential procurement
policies - SITA ITAC process similar to American DOD
Procurement - DPSA Preferential procurement is an effective
instrument to promote BEE in our economy.
Government is reviewing its preferential
procurement policy in order to enhance its impact
on BEE. In addition to increasing the levels of
preference to black-owned and black-empowered
enterprises, clear targets have been set. A final
target will be set once research on existing
levels of black procurement has been completed.
Department of Public Service Administration
Vol2. Ed03 2003
15Preferential Procurement by Government
- In support of increased procurement by
black-owned firms, government will expand its
supplier development programmes to ensure that
more black enterprises are created and are able
to meet the requirements of purchasers in the
public sector. - The enabling legislation on BEE will provide that
all government departments, state-owned
enterprises and public agencies must take into
account any code of practice issues in terms of
the legislation in determining and implementing
their preferential procurement policy.
Department of Trade and Industry9 April 2003
16Black Economic Empowerment Task Team Announced
- The Minister _at_ DTI, Alec Erwin, announced the
names of the BEE task team. Serve until Advisory
Council on BEE appointed - Finalize legislation and devise guidelines in the
BEE strategy - Liaise with various interested parties
- Cyril Ramaphosa, Saki Macozoma, Derek Cooper,
Patrice Motsepe, Gloria Serobe, Danisa Baloyi,
Buhle Mthetwa, Vuoy Jack, Ronnie Ntuli, Loyiso
Mbabane, Imogen Mkhize, Alan Hirsch, Philisiwe
Buthelezi and Lionel October
Department of Trade and Industry9 April 2003
17Summary
- Our country requires an economy that can meet
the needs of all our economic citizens our
people and their enterprise in a sustainable
manner. This will only be possible if our economy
builds on the full potential of all persons and
communities across the length and breath of this
country. Governments objective is to achieve
this vision of an adaptive economy characterized
by growth, employment and equity by 2014.
Department of Trade and Industry9 April 2003
18Thank You
Contact details 880-0101 telephone 388-2353
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