Gauteng launches BEE strategy

19 April 2006

Broad-based black economic empowerment received a major boost in Gauteng on Tuesday with the launch of the province’s new BEE strategy, which will come into effect on 1 June 2006.

Black economic empowerment, or BEE, seeks to undo the economic harm of apartheid, which systematically excluded African, coloured and Indian people – collectively known as “black people” – from any meaningful participation in the country’s economy.

BEE seeks to do this through increased black ownership and control of companies, employment equity, and skills training. A focus of the policy is broad-based empowerment, which seeks to bring more women, the poor, disabled, the youth and rural people into the mainstream economy.

In order for companies to do business with the government, they must have a solid and legitimate BEE profile.

The new Gauteng strategy is expected to substantially increase the role of the provincial government in promoting broad-based BEE. It sets out that, by the year 2009, up to 70% of government procurement must come from economically empowered companies.

The state’s financial muscle
Gauteng Premier Mbhazima Shilowa said at the launch that the strategy complied with the national policy framework, and placed particular emphasis on the provincial government’s purchasing power and support for small business.

“The state has a responsibility and a clear mandate to use its considerable financial muscle to promote growth in the economy and reduce poverty and unemployment, in this particular case through the mechanism of BBBEE,” he said.

He said the strategy gave effect to the Broad-Based Black Economic Empowerment Act of 2003 and other national policy and legislation, including the Constitution, the Employment Equity Act, the Preferential Procurement Policy Framework Act and Public-Private Partnership Guidelines.

“This [strategy] will ensure that all our people reap the fruits of democracy and we therefore need to extend the gains we have made in the political sphere into the realm of the economy,” he said.

“Our growth and development strategy identifies BBBEE as a critical mechanism to achieve our objectives, particularly in making sure more of our people … become active participants in economic activity.”

The Gauteng growth and development strategy, launched by last year, aims to build the province as a globally competitive city region and stimulate regional economic growth to 8% by 2014.

Inclusion and fronting
He said that as BEE had been widely debated in recent years, with critics suggesting it was only targeted at the black elite, it was important to emphasise that the policy’s beneficiaries must be all black people, including women, workers, youth, people with disabilities and those from rural areas.

Shilowa also warned against fronting, saying it was important that both the ownership and hierarchy of empowered companies must be assessed.

“We need to send a clear message that the time for white monopoly capital to pay lip service to economic transformation and empowerment, especially for women, will not be rewarded,” he said.

Paul Mashatile, Gauteng MEC for economic development, said the strategy was not aimed at duplicating departmental initiatives, but rather complementing, strengthening and creating coherence between them.

“We hope this document will guide us to 2009 and beyond. I hope in the implementation of this strategy our stakeholders will also consult with us and where there are difficulties we can deal with them guided by this document.”

He added that the strategy should be taken as guidance to municipalities in policy formulation and implementation.

Shilowa called on the private sector to also play a role in the success of broad-based BEE.

“The private sector has a role to play in supporting the growth of small, micro and cooperative enterprises through enterprise development programmes in partnership with the provincial government, as well as in designing innovative financing options to address development objectives including in housing, health and infrastructure,” he said.

The strategy sets the following targets to be achieved by 2009:

  • 70% of the provincial government’s procurement will be from broadly based BEE enterprises
  • 20% from small BEE enterprises
  • 5% from micro BEE enterprises
  • 30% on goods manufactured in South Africa
  • 15% from enterprises owned by black women

South Africa.info reporter and BuaNews

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