How the DA sees BEE

Original publish date – Tue, 14 Apr 2009 07:16:44 +0000, Keith

The DA says: “The Democratic Alliance (DA) believes that Black Economic Empowerment (BEE) is an economic and moral imperative for South Africa. If correctly designed and implemented, not only will it redress the imbalances of the past but it will pull more people into the economy, stimulate competition, improve our skills and productivity, raise our domestic investment levels, reduce poverty, increase employment and broaden our tax base. However, BEE as it is currently constituted has created significant distortions in the economy, which have hampered growth and job opportunities without helping the poor.”

It goes on to complain about specific deals, and specific people who have benefited.

It concludes with

“The DA will review the BEE scorecard to ensure that it accurately prioritises the interests of those who have fallen by the wayside, not those who are already reaping the rewards of the new South Africa. This review will focus on:

  • Placing less emphasis on ownership, and more emphasis on skills training and socio-economic investment, in the weightings accorded to the various categories used to evaluate businesses.
  • Developing ways to prevent credits from being used over and over again by the same individuals.
  • Establishing an ombudsman to resolve questions of compliance quickly.”

My feeling is that the DA has fallen into the same trap as those who do not understand BEE.

They want to place less emphasis on ownership. Currently ownership is 20% of the generic scorecard and 0% of the QSE scorecard if the QSE chooses so. What would they do? They state that they want to develop ways of preventing credits from being used over and over again by the same individual. Have they realised that the current scorecard has 2 points for “new entrants” – people who have not yet done deals to the value of R20 million – what I fondly call the “anti-Tokyo” clause.

What would they put down for skills and socio-economic development? Skills is currently 15% and SED 5% – which elements would they reduce?

A point to note is on a scorecard that has 100%, you cannot break the pie into more pieces than the 100% available.

My conclusion is that the DA is as confused about B-BBEE and the scorecard as anyone else I have ever criticised.



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