Sparrow Schools

Educational Trust

A Registered Non-Profit Organisation
& Socio-Economic Development Recipient

 

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About B-BBEE

 

B-BBEE stands for Broad Based Black Economic Empowerment. It is a government policy aimed at socio-economic transformation. ‘Broad-based’ means that the strategy is holistic — it includes black people, together with historically disadvantaged people, women, youth, and disabled and rural communities. The strategy facilitates economic growth because it ensures that every member of South African society is active in its economy. Black economic empowerment is often confused with affirmative action. Whereas the latter legislates equal representation in all workplace environments, the first emphasises black ownership and management representation. However, both fall under the Employment Equity Act and address inequality, which itself is the greatest threat to a healthy economy.

Many South Africans still believe that B-BBEE is only a moral strategy aimed to address historical wrongs — before the first democratic elections in 1994, the apartheid government made laws that denied African, Indian and Coloured South Africans access to, and participation in the country’s economy. However, as former president of the USA, Bill Clinton, acknowledges:

"advancing equal opportunity and economic empowerment is both morally right and good economics, because discrimination, poverty and ignorance restrict growth, while investments in education, infrastructure and scientific and technological research increase it, creating more good jobs and new wealth for all of us (Speech to the Democratic National Convention, Sept 5 2012)."

B-BBEE initiates tangible transformation, rather than a surface-level redistribution of wealth — in other words, through skills and enterprise development, it targets the root of inequality. This means that with a higher number of skilled entrepreneurs, there are more businesses running more effectively. As enterprises increase in number, so too do employment opportunities. This process indicates a positive snowball effect that stimulates economic growth.

B-BBEE has become an accurate indicator of, and contributor to economic development. According to the Department of Trade and Industry, “our country requires an economy that can meet the needs of all our economic citizens – our people and their enterprises – in a sustainable manner”. Sustainability extends beyond economics — there is a causal relationship between social and political unrest and economic instability. Accordingly, businesses no longer see B-BBEE as a bureaucratic necessity, but are well aware of its role in the social and political stability of a nation. B-BBEE is structured in a way that facilitates the entrepreneurial and infrastructural development of local communities. This means that communities are empowered, and that there is a growth in human resources. As explained by an SA info reporter, B-BBEE:

"increases the extent to which communities, workers, cooperatives and other collective enterprises own and manage existing and new enterprises, and increase their access to economic activities, infrastructure and skills (South African Info, 19 April 2013)."

In addition to the broader social benefits of black economic empowerment, the B-BBEE status of your business is critical in securing public and private sector tenders, business licensing requirements, as well as your company’s reputation.


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