Black Economic Empowerment

Black Economic Empowerment (BEE) is a racially selective programme launched by the South African government to redress the inequalities of Apartheid by giving black (African, Coloureds, Indians and Chinese) South African citizens economic privileges that are not available to White South Africans, in essence wealth redistribution. It is a form of Affirmative action. Although race is the overriding factor, it includes measures such as Employment Preference, skills development, ownership, management, socioeconomic development, and preferential procurement.

By 2015 around R350 billion (equivalent to US$24 billion) worth BEE deals had been done by the top 100 companies on the JSE with an additional R50 billion by private South African companies indicating that 10 percent of South Africa’s GDP had been transferred to 20 percent of the population in the 15 years since 2000.

Legislation

The new Codes of Good Practice of the Broad-Based Black Economic Empowerment comprise the following:

  • Code 100: Ownership
  • Code 200: Management & Control
  • Code 300: Employment Equity
  • Code 400: Skills Development
  • Code 500: Preferential Procurement
  • Code 600: Enterprise Development
  • Code 700: Socioeconomic development
  • Codes 800 – 807: Qualifying Small Enterprises

Scorecards

  • Generic Broad Based Scorecard
  • Generic Narrow Based Scorecard
  • Qualifying Small Enterprises Narrow Based Scorecard
  • Qualifying Small Enterprises Broad Based Scorecard
  • Financial Sector Scorecard
  • Construction Sector Scorecard (repealed on 17 February 2016)

Qualifying Small Business

Significant leniency for Small Enterprises has been built into the gazetted codes. Based on the Qualifying Small Enterprises Codes, any company with a turnover under R5 million p.a. is completely exempt from BEE and automatically qualifies as a level 4 contributor or achieves 100% BEE Contribution Recognition.

The generic broad based scorecard.

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Qualifying Small Enterprises

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