South Africa’s final codes of good practice on black economic empowerment (BEE) — released this week — will add “a whole new regulatory layer” to the South African industry, says official opposition Democratic Alliance leader Tony Leon.
In his regular Friday internet column, SA Today, Leon said: “Most countries that seek rapid economic growth deregulate their industries and labour markets, but South Africa is doing the opposite.
“Many foreign investors are uncomfortable with BEE, and it is considered a potential sticking point in free trade negotiations between the United States and the entire Southern African Customs Union.”
Leon suggested: “Perhaps that is why the government is now expected to exempt foreign firms from the BEE codes.”
Achievements in BEE should be measured by the improvement in the lives of ordinary South Africans, not the small group of “gentlemen of empowerment”.
Leon said his party would prefer to create tax incentives for businesses to train their workers, rather than imposing costly skills levies and wasting money on the government’s ineffective sectoral education training authorities.
“We have also championed employee share-ownership schemes as an alternative to the ‘re-empowerment’ of the same people over and over again in massive BEE deals. And we have pushed for labour and regulatory reform so that small businesses can flourish.
“In the long run, the only real guarantee of empowerment is economic growth. That is why the government’s goal of reaching 6% growth should trump all of the many complicated percentages of the BEE score card.”
The codes provide some clarity on the measurement of bonus points on empowerment score cards. In addition, indirect equity holdings count as empowerment. — I-Net Bridge