New BEE rules announced for IT companies in South Africa

The Independent Communications Authority of South Africa (Icasa) has announced new regulations aimed at promoting historically disadvantaged South Africans in the ICT sector.

In a directive published on Wednesday (31 March), the regulator said that the purpose of these regulations is to promote equity ownership by historically disadvantaged groups and to promote B-BBEE.

In achieving this, Icasa said that the regulations will:

  • Facilitate diversity and transformation in the ICT Sector by promoting B-BBEE, with particular attention to the needs of women, opportunities for youth and challenges for persons with disabilities;
  • Prescribe the application of the Historically Disadvantaged Group (HDG) equity requirement;
  • Provide the manner in which compliance with the HDG equity requirement, Black Equity requirement and B-BBEE contributor status level requirements will be verified, monitored and enforced.

Among the changes is a requirement for licensees to comply with the mandatory equity ownership requirements, 30% equity ownership by black people and level 4 BBEEE status.

The regulations also establish penalties of up to R5 million or 10% of the licensees annual turnover where a licensee fails to maintain the mandatory minimum requirement.

2021 will be a ‘game changer’ for BEE in South Africa

President Cyril Ramaphosa has said that the government will look at how black-owned businesses can participate in the recovery of the country’s economy in 2021.

Speaking at the ANC’s Progressive Business Forum in January, the president said this will include a focus on the key economic sectors which drive the economy and the role that black people have in these areas.

“That in my view will be the game changer. Sometimes we talk in broad terms about the economy, we now need to go deeper into exactly what makes the economy work and function, and the participation of black people in all areas of economic activity.

“We will then see how best we can get black people to participate. This is the year that we should be able to do that and move the needle of economic empowerment for women, young people and black people broadly.

“We need to be able to say in a few years time that the empowerment of our people is now becoming a reality.”

Read: Why South Africa is a ‘miserable’ country: ratings agency

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New BEE rules announced for IT companies in South Africa