A plan should be devised to cap the level of benefit black empowerment companies receive to avoid an endless round of public and private tenders going to the same people, says South Africa’s small African Christian Democratic Party (ACDP).
The ACDP — which has eight members in Parliament at present but aims to significantly increase this number in the coming April 14 national election — said in a statement on Monday that the government’s black economic empowerment (BEE) strategy “must focus on growing the black market share rather than empowering a few well-connected individuals”.
Advocate Mighty Madasa, MP, said: “The ACDP believes that the current application of BEE by the government tends to benefit only a few established BEE companies which may be politically well-connected, without sharing the benefits and helping to develop emerging companies.
“We believe a plan should be devised whereby once BEE companies reach a stage where they have made a certain profit and are established, other BEE companies should be given tenders, thereby enabling the growth of this sector, creating wealth and job opportunities.
“The purpose of this strategy would be to broaden the BEE base so that the same companies do not benefit from government and private sector tenders over and over again.
“The current system works against smaller BEE companies that are instructed to form consortiums with larger existing BEE companies, compelling them to partner companies which are already benefiting from tenders.
“Once a BEE company has reached a stage where it is well-established and making a profit, the company is no longer disadvantaged and should compete on even terms in the business arena. Opportunities can then be given to developing BEE companies to grow and share in the profits.
“This system of equal sharing would help avoid corruption and assist those who are currently disadvantaged to develop and create economic growth in South Africa,” Advocate Madasa said. – I-Net Bridge