BEE law has failed small enterprises, say black leaders

Black economic empowerment has failed to reach its objectives and needs to be reviewed urgently, according to black business leaders, business organisations and civil society.

Speaking at a one-day conference this week organised by the Mail & Guardian, at which 20 years of economic transformation was reviewed, National African Chamber of Commerce (Nafcoc) president Joe Hlongwane summed up the views of many of the speakers when he said: "Black economic empowerment [BEE] is not delivering. We need to fix it, or find something else."

Addressing Deputy President Kgalema Motlanthe, who delivered the opening address, Hlongwane said the major problem is that South Africa does not "concentrate on building companies from the bottom up; instead, we bought into existing big business. There is no focus, then, on building the BEE sector."

Legislation has done nothing to assist small business, as "big business just found ways to get around the system".

Motlanthe said in his address that BEE's original intention, which was to make ownership and senior management more equitable, "led to unintended consequences such as fronting, speculation and abuse of the tender system".


He said, however, new empowerment codes and greater monitoring of broad-based BEE compliance, as well as increased incentives for larger companies to support emerging and smaller enterprises and to include them in their supply chain, are being implemented.

Ministers inaccessible "until ­election time"
Hlongwane said that, in his ­experience, state agencies still work in silos, with one division not talking to another.

Furthermore, ministers remain inaccessible "until ­election time", making it hard for Nafcoc to address the specific ­problems of small enterprises.

"The sector, which is key to growth, needs a champion in the form of a minister assigned to oversee small, medium and macro enterprise development," he said.

Funding and training continue to be a large hurdle for small business.

The National Youth Development Agency's Siviwe Mkoka said there is no funding for small businesses that need up to a few thousand rand in start-up capital.

Former government communication spokesperson Jimmy Manyi, speaking on behalf of the Progressive Professionals Forum think-tank, said there is confusion within the government about the difference between ­entrepreneurship and self-employment.

"Let's not confuse someone who wants to open a spaza shop with an entrepreneur. A person who opens a spaza shop is looking at self-employment and maybe employing a few more people; an entrepreneur is something totally different."

Manyi said training is incorrectly targeted: "We are sitting with an innovation hub that is virtually a white elephant because the wrong people are being channelled there."

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Africa needs businesses that build and strengthen the continent

Africans should know by now that they can’t depend on leaders and should rather learn to do it themselves

Zuma vs Ramaphosa? Neither is the leader South Africans deserve

Neither statesman could command sufficient authority in an ANC that remains mired in corruption and infighting and at the behest of big capital

Sars plan for illicit tobacco still being refined

Meanwhile, billions of illegal cigarettes are flooding the informal markets as lockdown regulations are lifted at last

Women are South Africa’s changemakers and they deserve more

The truth is the economy still largely revolves around men, especially white men like me, writes Alef Meulenberg.

Covid-19 is taking its toll on people’s state of mind

The future is uncertain, and the number of people suffering from anxiety and depression is rising

Comrade Andrew Mlangeni was the embodiment of service

Kgalema Motlanthe paid tribute to ANC struggle stalwart Andrew Mlangeni, who died on Tuesday, at his 95th birthday celebrations last month
Advertising

Subscribers only

The shame of 40 000 missing education certificates

Graduates are being left in the lurch by a higher education department that is simply unable to deliver the crucial certificates proving their qualifications - in some cases dating back to 1992

The living nightmare of environmental activists who protest mine expansion

Last week Fikile Ntshangase was gunned down as activists fight mining company Tendele’s expansions. Community members tell the M&G about the ‘kill lists’ and the dread they live with every day

More top stories

Fifteen witnesses for vice-chancellor probe

Sefako Makgatho University vice-chancellor Professor Peter Mbati had interdicted parliament last month from continuing with the inquiry

Constitutional Court ruling on restructuring dispute is good for employers

A judgment from the apex court empowers employers to change their workers’ contracts — without consultation

Audi Q8: Perfectly cool

The Audi Q8 is designed to be the king in the elite SUV class. But is it a victim of its own success?

KZN officials cash in on ‘danger pay for Covid-19’

Leadership failures at Umdoni local municipality in KwaZulu-Natal have caused a ‘very unhappy’ ANC PEC to fire the mayor and chief whip
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday