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AfricaMoney | November 6, 2016

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BEE will help boost economic growth: Davies

BEE will help boost economic growth: Davies

The South African Government News Agency reports that the Black Economic Empowerment (BEE) is not only a political and social necessity in redressing the wrongs of the past, but will also help broaden economic participation which will contribute significantly to economic growth, the Minister of Trade and Industry Rob Davies said yesterday. “As we bring people into the economy those people become consumers in that case, but also they become involved as producers and contributors to the development of the wealth of the country and that can contribute to the economy of the country,” said Davies.

Briefing journalists before the debate on the Broad-based Black Economic Empowerment (BEE) Amendment Bill in the National Assembly, he said the growth in the automotive sector for instance was attributed to new entrants in the market.

He said the intention with the bill is to ensure that black people became not only owners in companies but also active participants in the company.

“They are the people that actually direct the way that the company operates. They are the people who when they sit in the boardroom, they sit in the proper boardroom and take the proper decisions about how the company operates, not just in the subordinate categories where PR and things like that are looked towards,” he said.

He added that the aspirant small business owner had not benefited sufficiently from BEE, but that the new BEE codes of good practice which are expected to be released in a few months’ time after last year being released for public comment, would boost support to black-owned small firms.

Answering a question on whether a time limit would be set or not on BEE, Davies said the country was nowhere near to a point where a sunset clause could be set.

He pointed to a 2007 survey on BEE, conducted by the University of Pretoria, which had shown that most companies were only at the lowest level on the BEE scorecard – level 8.

The department has commissioned another university to conduct a follow-up BEE survey on the overall level of empowerment in South Africa.

The bill, which amends the Broad-based BEE Empowerment Act of 2003, provides a clear statutory definition of fronting and also provides for the setting up of a commission that will address issues of fronting and can levy penalties specified under the bill.

The bill also provides for a regulatory framework for BEE rating agencies, and gives all government departments and businesses one year to bring in to line any other empowerment legislation they may be using with that of the bill.

The mining charter, said Davies, is one of these tools that would need to be realigned with the BEE Bill.

The penalties under the bill allow for those convicted of fronting to be levied with a fine or a prison sentence of no more than 10 years.

The department is also in the process of amending the BEE codes of good practice after last year putting them out to comment.

The amended codes provide for greater emphasis on the development of black suppliers, Davies said they would be released in another couple of months, hopefully at about the same time when the bill is signed into law by President Jacob Zuma.

Davies said much of the comments received were around the targets, timeframes and parameters, which the department is still in the process of engaging with.

Once the National Assembly has adopted the bill, it will be referred to the National Council of Provinces (NCOP) for concurrence, before it can be signed into law by the President.

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Source: South African Government News Agency

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