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B-BBEE and sustainable development in South Africa

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Picture: Doctor Ngcobo/African News Agency (ANA)/ Taken September 22, 2022 – Models showcasing with Thandokazi Mguzulwa collection during rehearsals at the Durban Fashion Fair. Mguzulwa is a mentee of Makhosi Ntshangase of Sistas Felas brand, a success story of eThekwini Municipality’s fashion development programme who not only owns a fashion skills development school but also supplies Edgars stores and employs over 20 people. Structural inequalities in the South African economy can be achieved by promoting the growth of small and medium-sized enterprises and encouraging the development of local supply chains, the writer says.

By Francis Marimbe

Broad-Based Black Economic Empowerment (B-BBEE) has been a central policy in South Africa for over two decades. The policy was introduced to address the legacy of apartheid-era economic exclusion and promote inclusive economic growth. While the policy has had some successes, its impact on sustainable development in South Africa is a subject of debate.

B-BBEE has made notable contributions to sustainable development in South Africa. It has addressed historic inequalities and imbalances by promoting the entry of black-owned businesses into the mainstream economy. B-BBEE has also created more opportunities for previously disadvantaged individuals and contributes to socio-economic development. Regarding building skills and capabilities, B-BBEE codes require companies to invest in skills development and training programmes, which help build black-owned businesses’ capabilities. Significant skills transfer has contributed to improved economic performance and long-term sustainability.

Undoubtedly, the policy has also provided access to education, training, and employment opportunities for black South Africans. These positive outcomes of the policy have contributed to sustainable development in South Africa. Several companies have been pursuing responsible business practices by promoting sustainable procurement, environmental awareness and ethical behaviours that contribute to the longevity of businesses. Such longevity of companies plays a role in promoting sustainable development. More so, B-BBEE promoted social cohesion in South Africa. It has created space for a more equitable and inclusive economy, which can help reduce social tensions and promote a stable environment for businesses to operate and contribute to sustainable economic development.

B-BBEE has undoubtedly contributed to the advancement of black South Africans in various sectors of the economy. The policy has opened up opportunities for black-owned businesses to participate in the mainstream economy and has facilitated the growth of the black middle class. However, there are also several criticisms of B-BBEE’s impact on sustainable development in South Africa.

One major criticism is that the policy has not done enough to address the structural inequalities in the South African economy. Despite the policy’s efforts to create opportunities for black-owned businesses, the economy remains dominated by large, white-owned corporations. This has resulted in a concentration of wealth and power in the hands of a few, perpetuating the unequal distribution of resources in the country. B-BBEE has also been criticised for focusing too heavily on ownership and not enough on other aspects of economic empowerment, such as skills development and employment equity.

While the policy has created opportunities for black-owned businesses, it has not done enough to address the skills gap in the South African economy. This has resulted in a lack of qualified candidates for high-skill jobs, perpetuating the cycle of unemployment and poverty in the country. Furthermore, B-BBEE has been criticised for its lack of transparency and accountability. The policy has been criticised for being too complex and challenging to implement, leading to abuse and corruption. Such criticism has resulted in a lack of trust in the policy among the public, undermining its effectiveness in promoting sustainable development in South Africa.

As a way forward, a need to rethink the implementation of B-BBEE to ensure that it contributes more effectively to sustainable development is inevitable. I suppose there is a need to address the structural inequalities existing in the South African economy. This can be achieved by promoting the growth of small and medium-sized enterprises (SMEs) and encouraging the development of local supply chains. Hence, new opportunities for black-owned businesses will be created and help to decentralise economic power in the country.

There is also a need to focus on skills development and employment equity through investing in education and training programmes that provide young South Africans with the skills they need to succeed in the modern economy. This will help address the skills gap in the country and create new opportunities for employment and economic empowerment. Another best way forward would be to increase transparency and accountability by simplifying the policy and making it easier to implement, monitor, and evaluate. This will help to reduce the risk of abuse and corruption and increase public trust in the policy.

In conclusion, B-BBEE has positively and negatively impacted sustainable development in South Africa. While the policy has created opportunities for black-owned businesses and facilitated the growth of a black middle class, it has not done enough to address the structural inequalities that exist in the South African economy.

Francis Marimbe is a B-BBEE specialist at DRISA Consulting Services.