State gets tough on BEE fronting

The Department of Trade and Industry (the dti) says it will centralise BEE accreditation and look at ways to take this function in-house as it targets the creation of 100 hundred black industrialists in the next three years.

“It must be difficult for you to get a (BEE) certificate. We will go to court to defend ourselves,” BusinessDay reported dti deputy minister, Mzwandile Masina as saying, adding that the government would tighten up on fronting.

“The South African government is promising radical economic transformation to get more black businesses involved in the transformation of our society, and to get more of our people, especially our youth working. The Broad-Based Black Economic Empowerment (B-BBEE) will be the vehicle used to drive that transformation.”

Masina announced several initiatives that government will undertake to supporti black industrialists including:

  • Reforms to the Preferential Procurement Policy Framework Act (PPPFA),
  • Customising incentive schemes offered by government and its agencies,
  • The launch of a new financial support scheme suitable for black industrialists,
  • The establishment of an advisory panel on black industrialists.

“Over the next five years, a host of working opportunities will become available to South Africans. For example, a new generation of black industrialists will be driving the re-industrialisation of our economy,” he said.

The dti said that local procurement and increase domestic production will be at the heart of efforts to transform the economy, and will be supported by a government undertaking to buy 75% of goods and services from South African producers.

Masina said that the local procurement aspect of the B-BBEE policy and other government procurement practices by State Owned Enterprises (SOEs), in particular, will offer black industrialists better access to markets.

SOEs must accelerate their procurement programme to meet the 75% target over the next five years, he said.

Mzwandile Masina
Mzwandile Masina

“In its current form, the PPPFA does not assist our transformation ideals. There should be a process of changing this piece of legislation to actualise the agenda of black industrialists,” Masina said.

“We will review the current incentives which seem to have been stringent and making it difficult for Black industrialists to access the funds. We will soon launch an incentive scheme that will specifically focus on black industrialists.

“We will centralise BEE accreditation because as things stand at the moment it is open for abuse. Therefore, we will look at ways where this function is housed in the dti. If we are to create sustainable Black industrialists we must change how we do things,” Masina said.

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State gets tough on BEE fronting