BEE Partner, South Africa Economy Watch

Equal Opportunity was to be relegated to the history textbooks in 1990 when suddenly and without warning, the National Party government announced the unbanning of previously proscribed political parties and the release of its political opponents from the incarceration and exile. This bold statement by the government of the day sent a strong message that black political and economic aspirations were back firmly on the agenda. Then the even bolder term, affirmative action resurfaced. Read the rest of this entry »

Research after research in the early 1980s had proved that white middle management found the term to be ‘almost tantamount to reverse racism’ in that, according to these managers, it sought to advance blacks only, possibly to the exclusion of whites. Furthermore, it was perceived to be too politically loaded, having been introduced at the time when the black political movement was under the strong influence of Steve Biko and his Black Consciousness Movement, which had triggered off the 1976 unrest. Read the rest of this entry »

The current BEE Act, the First Code of Good Practice and the BEE strategy document, all released in 2003, are the cornerstones of government’s plan to give impetus to broad-based empowerment by 2014. This legislation has direct bearing on the current BEE requirements for your business, and as a consequence needs to be studied in some detail. Read the rest of this entry »

Becoming an empowered company is not good enough. Soon all your competitors will have achieved similar status. Your company will need to do better than that. Whoever has undertaken the transformation process in the best way will be the winners, not those who have merely transformed. The key lies in transforming your business to become black empowered while simultaneously creating a sustainable competitive advantage. Read the rest of this entry »

An economic BEE transformation is a business necessity as a consequence of the following imperatives:

A moral imperative: The National Party came to power in 198 implemented the policy of apartheid. Economic repression led 4 to the expropriation of black property not already expropriated under the Land Act. There was widespread exclusion from the economy on the basis of race. In addition, white capitalists exploited black labour. Read the rest of this entry »

Empowerment has been defined by the government as ‘an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people that manage, own and control the country’s economy, as well as significant decreases in income inequalities:’ Read the rest of this entry »

Economic interest is a participant’s right to share in the economic fruits of the business. The legal form of the distribution is not important, but normally comes in the form of dividends and capital gains. The Codes define it as a claim against the entity representing return on ownership of the entity similar in nature to a dividend right. Read the rest of this entry »

Ownership has resulted in many of the negative comments regarding BEE. How many times have comments been passed making vague reference to “not giving my business away to anyone!” followed by a few obscenities. These comments are largely based on a fear of the unknown. The unknown is not referring to the incumbent change so much as the ignorance of the commentator about the nature of the ownership element. Read the rest of this entry »

There are three answers to this question. A Black-owned business would obviously take the points. A white-owned business needs to consider how much benefit it can derive through incorporating Black ownership. Businesses contracting directly with government are going to receive benefit from having Black ownership. Apart from direct dealing with government, where a Black party can bring new value to a business, it then makes economic sense to sell to a Black participant and score on the ownership points. Read the rest of this entry »

There is much detail in this section. It is, arguably, one of the most important issues in the context of BEE. BEE, and particularly ownership, has developed a bad name because the wrong partners have been sought. It is all very well to have a paternalistic approach and give ownership to staff members or some unfortunate person, but is this a sound business principle? It may be, but normally it is not. The point is, if an empowerment deal is not based on sound business principles, then a sustainable relationship is unlikely. Read the rest of this entry »

The Boston Consulting Group (BCG) categorized businesses into four groups:

• Start-ups (BCG uses the term “Question mark”.)
• Stars
• Cash cows
• Dogs.

Start-ups are new ventures with no track record. Start-ups usually require capital investment and do not produce any cash benefits for the owners. A start-up can evolve to a star or a dog. They are high-risk entities making them difficult to value and will find it hard to obtain empowerment partners. Read the rest of this entry »

Once the type of partner required has been established, the source of that partner is more easily identified. Determine who you want and consider the areas such a person would frequent. A question that small business owners may wish to consider in sourcing empowerment partners is, “Who is my target market and who can bring me closer to that market?” Read the rest of this entry »

In any event, while perceived power symmetries may explain the willingness of both the ANC and the NP to enter into negotiations, the balance of power eventually shifted quite clearly to the ANC. The National Party sought, for example, a guaranteed white veto in the legislature (similar to that assured in Zimbabwe’s 1979 negotiations), and a leading role in writing the final constitution. Read the rest of this entry »

Faced with both domestic and international pressures, the South African state was “substantially weakened” by the late 1980s and early 1990s. As Pierre du Toit notes, many activities were beyond the reach of state control: corruption, dirty tricks, and clandestine murder among them. Thus the prospect of a negotiated settlement brought great risk (the potential loss of hegemony) as well as opportunity (the prospect of stemming economic losses and maintaining political control) for the government, as it did for the ANC. Nonetheless, both parties anticipated that they might use their positions and the perceived weakness of the other party to gain from negotiation. Read the rest of this entry »

The economy and poverty remain, in our view, the principal obstacles to future stability in South Africa. As noted, growth is insufficient to meet population needs, and the controversial GEAR policies have to a considerable extent removed the state from the direct provision of economic resources to the poor in terms of redistribution, and have instead placed this critical role in the purview of “the market.” Read the rest of this entry »

Since large residual white populations remained in southern Africa after independence, a considerable degree of accommodation has been required to reduce conflict between the owners of the resources and the new majority “owners” of the state. South Africa’s 4.5 million whites continue to dominate industry, commercial agriculture, the financial sector, mining, and the vast majority of agricultural lands and resources. Read the rest of this entry »

Section 3.2 of Statement 102 provides the criteria for the sale of assets to qualify for recognition as an ownership alternative and achieve ownership points. The transaction must adhere to all the following criteria:

• It must result in the creation of a sustainable business opportunity for the Black party.
• It must result in the transfer of specialised skills or productive capacity to Black people. Read the rest of this entry »

Botswana has attracted expatriates from all over Africa in recent years.They have enjoyed a share in its growth and prosperity, which is pretty well unmatched in sub-Saharan Africa. Its people are easy-going and open. It is a country that is not over-regulated and benefits substantially from its proximity to South Africa. Read the rest of this entry »

Welcome to 2009. We are very much looking forward to this coming year. We have many new projects planned, great ideas that are set to work extremely well and fantastic prospects for 2009.

In addition to all the exciting plans we have, we believe this year is going to be a very exciting BEE year with many aspects changing, not to mention all the political action.

BEE Implementation in 2009

• 2008 saw a big expansion in BEE certificates – this year will be different. It will no longer be good enough to have a certificate. Companies will need to get scorecards that have enough points to satisfy their customers.
• Verification of BEE status for companies will change substantially – hopefully verification agencies will be accredited, but more importantly proper preparation will be vital in order to get a good verification. The most effective way to do this is with EconoBEE V3.
• BEE Charters – we don’t like the idea of charters as we feel it gives some companies an excuse not to implement BEE because they are waiting for a charter. We suspect that the charters will continue to be delayed and will have lots of controversy when they are finally gazetted. Read the rest of this entry »

If you are in sales, you know how important it is to give your customers what they want – a good reliable, quality, cost effective product or service. Customers can be difficult – if they ask you to jump, then the only way you are going to get the sale is to ask “How high?”

Many customers are asking for your BEE score. The only profitable response is to give them the right answer – “Yes, I do have a BEE scorecard – here it is”. Further your customer is no longer interested in knowing whether you have a BEE certificate – they want a high BEE score – the higher the better. Read the rest of this entry »