Black empowerment business deals worth R285-billion have been concluded in South Africa in the past 10 years, the government said on Friday, but details on the beneficiaries were scant.
At least 1 364 black economic empowerment (BEE) deals worth R285-billion were concluded between 1995 and 2005, said the Trade and Industry Ministry, defending the outcome of government policies in this regard.
”A number of reviews have been conducted to date that demonstrate broad-based beneficiaries are participating in BEE,” it said in a written response to a parliamentary question.
The beneficiaries were not further defined.
The BEE policies of the African National Congress-led government have been widely criticised as ineffective.
Critics contend that they benefit a small black elite representing faceless beneficiary groups and result in ”fronting” by white companies giving shares but no decision-making to blacks.
It was initially evident that the country’s top six BEE companies were the main beneficiaries of such deals, the ministry document conceded. These companies are mostly headed by successful black businessmen with ties to the ANC government.
But draft codes of good practice introduced in 2004 to steer companies towards truly broad-based BEE had ”significantly impacted on the size and shape of deals executed”.
Through BEE, the South African government is trying to boost the participation of blacks in the economy to rectify their exclusion through decades of apartheid policies. It holds entities with which it does business to quotas for black managers, staff, and procurement partners.
”Since 2000, about 55% of the top 40 companies have negotiated BEE transactions involving more than 10% of assets or equity,” the ministry said. ”At least 10% of the top 40 companies have entered into a BEE transaction involving more than 25% of assets.”
It said the profile of BEE partners has changed ”significantly” since the introduction of the 2004 codes. — Sapa-AFP