1. Government’s strategy for Broad-based Black Economic Empowerment

2. The Transfomation Imperative Initiatives since 1994
OVERVIEW
The Transfomation Imperative
Initiatives since 1994
Broad-based black economic empowerment strategy
Policy instruments
‘balanced scorecard’
Financing BEE

3. THE TRANSFORMATION IMPERATIVE
Legacy of systematic dispossession and disempowerment during colonialism and apartheid
Transformation has political, social and economic dimensions
A more equitable economy will support the drive for accelerated growth

4. INITIATIVES SINCE 1994
Dismantling machinery of apartheid
Constitution enshrines basic human rights of all South Africans
Constitution recognises the need for redress
Legislative measures:
Restitution of Land Rights
Preferential Procurement
National Empowerment Fund
Employment Equity Act
Competition Act

5. INITIATIVES SINCE 1994
Various policies and programmes
Integrated Human Resource Development Strategy
Urban Renewal
Rural Development
Tourism Transformation
Strategic plan for agriculture
Small enterprise development

6. INDUSTRY SPECIFIC INDICATORS & TARGETS
KEY PRINCIPLES
A clear definition of Black Economic Empowerment
BEE is an inclusive process
BEE is part of our growth strategy
Economic growth, development and BEE are complementary

7. Broad –based Black Economic Empowerment
A process that directly contributes to the economic transformation of South Africa and brings about significant increases in the numbers of black people who manage, own and control the country’s economy, as well as significant decreases in income inequalities
Includes:
HRD preferential procurement
Employment equity enterprise development
Investment, ownership and control of enterprises and economic assets

8. Advisory council on BEE Preferential procurement
POLICY INSTRUMENTS
Enabling legislation
Advisory council on BEE
Preferential procurement
Restructuring of state-owned enterprises

9. POLICY INSTRUMENTS (cont.)
Licensing and related regulatory instruments:
Fishing
Mining
Gambling
Liquor
Sector Charters and Enterprise Partnerships:
Only for designated sectors
Encourage voluntary compliance

10. A “BALANCED SCORECARD”
Direct empowerment:
Equity ownership
Management
Human resource development
Employment Equity
Preferential procurement
Enterprise development

11. FINANCING BEE
Need to maintain macroeconomic stability
Need to address market failures
R10bn over 5 years
Industrial development corporation
National empowerment fund
Targeting incentives and other support-measures for enterprises

12. INSTRUMENTS (cont.)
Black Economic Empowerment Advisory Council
To provide considered advice to the government
To promote institutional and societal consensus on the implementation of BEE.
To assist in monitoring and evaluation

13. INSTRUMENTS (cont)
Utilising regulatory instruments
To set out consistent empowerment measurement indicators and definitions and provide guidance to stakeholders;
To allow for the issuing of codes of practice through an enabling act to promote certainty in the application of BEE

14. IMPLICATION FOR THE SECTOR
The industry should therefore give consideration to the following:
The design of comprehensive BEE programmes for the sector
Programmes should address the following:
the core BEE indicators as outlined;
outcomes targets/percentages;
appropriate financing instruments to promote affordable and sustainable ownership;

15. IMPLICATIONS FOR THE SECTOR
appropriate financing instruments to promote affordable and sustainable ownership;
a reporting, monitoring and evaluation system;
independent auditing by accredited BEE rating agencies or approved industry associations.

16. IMPLICATIONS FOR THE SECTOR (cont)
Recruit black people into executive decisions making positions in the company;
Develop a comprehensive procurement and enterprise development strategy ;
Sell equity to a black firm;
Choice of partner and funding arrangements are critical; New shareholders must exercise a level of influence over direction of the business interests in SA; demonstrate a commitment to add value to the investment;

17. CONCLUSION
To ensure that the benefits of empowerment are shared across society and impact as widely as possible, the Strategy aims to mobilize all South Africans to support BEE as an integral component of economic stability and of efforts to increase South Africa and the regions productive capacity. Partnership initiatives are thus critical.
The inclusion of black people in meaningful and sustainable economic activities underpins economic stability and prosperity and promotes human dignity.
The reality therefore is that the government has to act to advance Black Economic Empowerment if we are to attain the equitable, non-racial and non-discriminatory society that is embodied in the Constitution.