In a surprising confession in a reply to a question regarding the policy of Black Economic Empowerment (BEE) which excludes millions of people from minority groups, the ANC government acknowledges that it has no idea what the real impact of the policy is, Adv. Anton Alberts, the FF Plus’ parliamentary spokesperson on trade and industry says.
He says the ANC is blindly stumbling along with a policy of which the negative effects are not known.
Adv. Alberts says pointed questions regarding BEE, such as whether there has been any research on the subject and whether it stimulates economic growth or creates jobs, were bypassed with jargon and it appears that the only two investigations which were done, were aimed at establishing whether existing enterprises were adhering the BEE provisions.
Questions about the future impact of BEE and accompanying job creation and economic growth and on what research these assumptions were being based were merely answered by the statement that transformation is showing slow progress and that the government is not yet in a position to analyse the effect thereof.
“The vague idea government apparently has about the destructive effect of the policy of BEE which negatively impacts millions of people from minority communities and which has largely destroyed service delivery, is a report of the National Planning Commission about research which was done between 2008 and 2012 which indicates that the poverty levels in South Africa have improved.
“This state of affairs is not acceptable as BEE and affirmative action has forced large sections of the white and brown minority communities out of the labour market and has impoverished them.
“The FF Plus is insisting that an independent investigation is done immediately into the merits of BEE. To date, it has only been abused by the ANC government as an instrument to enrich cadres and in so doing entrench the ANC’s hold on government,” Adv. Alberts says.
Contact no.: 082 391 3117 / 083 419 5403
2813. FF Plus to ask the Minister of Trade and Industry:†
(1) Whether there are any scientific studies which offer proof that the policy of broad-based black economic empowerment (BBBEE) (a) encourages and (b) ensures economic growth and job creation; if not, what forms the basis of the Government’s assertion that BBBEE has encouraged or brought on economic growth and job creation; if so, what are the relevant details;
(2) (a) what impact does he estimate the Government’s BBEEE policy is likely to have on future (i) economic growth and (ii) job creation and (b) what forms the basis of the Government’s figures;
(3) (a) how many black persons have been developed and uplifted from poverty by the specified policy and (b) what forms the basis of the Government’s figures;
(4) (a) how many black persons does the Government estimate will in the future be developed and uplifted from poverty by this policy and (b) what forms the basis of the Government’s figures NW3449E
1&2) The aim of the B-BBEE policy is not limited to economic growth and job creation but also contribute toward socio economic transformation of our society. It recognises and takes into account that over many years the South African economy was created to benefit only a few minority. The Black majority were excluded from the mainstream economy and they continue to operate mainly in the informal economy with limited access to resources and marketing networks. There was and still a necessity post- 1994 to create an integrated economy which benefit all South Africans by policies such as the B-BBEE.
When B-BBEE was conceptualised and developed benchmarks were made with similar policies elsewhere in the world. We also recognised that empowerment in South Africa in not new because we have had Afrikaner empowerment which was aimed to strengthen participation of Afrikaner in the economy.
The two main studies that we have commissioned so far is the 2008 baseline study as well as a follow up study in 2012/2013. The first study revealed that overall the country was at level 8 which is non-compliant. In the second study the findings indicated that the country has progressed with the implementation of B-BBEE to a certain degree. The overall picture indicates that the country is at level 4 of B-BBEE compliant. The make-up of such level 4 is that Exempted Micro Enterprise (enterprises with a turnover of less than R 5 m per annum) and Qualifying Small Enterprises (enterprises with a turnover of between R 5 m and R35 m per annum) are at level 3, and Large Enterprises (enterprise with turnover that is more than R35 m per annum) are at level 6. The large enterprises, which are meant to drive transformation in the economy, are still lagging behind, as they are still battling to embrace and implement meaningful transformation.
3) Although the studies show some slow progress in terms of transformation we have not being able to analyse the spin-offs on economic growth and job creation. We are in the process of appointing a commissioner who will have the capacity to periodically provide such data.
4) One of the elements of the B-BBEE policy is socio economic development which encourages enterprises to invest in poor households and communities (i.e 1% of their annual profits). We believe that this element if implemented properly will contribute towards poverty alleviation in South Africa and thereby complement other policies on poverty alleviation such as government provisions of grants to poor households. The National Planning Commission conducted a survey which looked at poverty levels for the period 2008- 2012 and which shows a decrease in poverty levels in South Africa. In future we should be able through the commission to quantify the estimated amount that can be available for socio economic development initiatives in the economy on an annual basis and the impact thereof on poverty eradication.