Black Economic Empowerment
With more than 20 years in a new democratic age, Black Economic Empowerment (BEE), or Broad-Based Black Economic Empowerment (B-BBEE), has become a critical component of South African legislation. Broad-based black economic empowerment (BEE) is a government program that aims to accelerate economic transformation and increase the economic participation of Black people (South African citizens of African, Coloured, and Indian origin) in the South African economy.
Although BEE involves many other components, we will concentrate on the ownership aspect. The goal here is to increase black ownership in business, which is normally accomplished by selling a stake in the company to adequately qualified people. There is no certainty that BEE stakeholders will obtain any equity due to the way these arrangements are normally set up.
Now, since there is no guarantee of equity, how much advantage does the target group of these transactions receive? Of course, there will be moments when they do receive equity, but how frequently and to what extent? Furthermore, who is often targeted as a candidate for such arrangements, and how will this assist BEE achieve its goals?
Different Points of View
The value of BEE laws is debated on all sides of the political spectrum. Cyril Ramaphosa, Dr Rob Davies, and Themba Dlamini are among the famous figures who support BEE. Although they believe that the current implementation of BEE may be improved, they believe that BEE plays a critical role in South Africa’s economic well-being. In addition, the demographic disparity in black participation in South African firms must be addressed.
Others, including former Reserve Bank governor Tito Mboweni, believe BEE should be removed from the Act. Several arguments are presented as to why this is the case. Mboweni’s point is that financing is the biggest impediment, which he feels a state bank may help to overcome. Others argue that the ambiguous guidelines with subjective interpretation have exacerbated the situation. It is often stated that BEE slows growth, indicating that it has a negative impact on the economy. Others contend that BEE actually hinders the equitable distribution of wealth and corporate representation by exacerbating historical political injustice and, at best, indirectly maintaining the status quo.
In South Africa, who is eligible for BEE?
BEE allows a person to become a South African citizen by birth, descent, or naturalisation. However, citizenship by naturalisation is only available in certain conditions.
Who brought BEE to South Africa?
In an attempt to rectify the disparities endured by black South African residents as a result of the apartheid period, the South African government passed the Broad-Based Black Economic Empowerment Act 53 of 2003 (the BEE Act) in 2003.
How do I become a BEE?
Customers can apply for a B-BBEE certificate at any time on the eservices website, Bizportal, or at CIPC Self Service Terminals while registering a business or filing yearly returns. A B-BBEE accreditation is not necessary for a company with a revenue of less than R10 million.
