Government agencies are becoming more demanding about accelerating transformation in the South African economy through BEE black ownership targets and businesses having a good BEE scorecard.
We are starting to see this trend with gambling boards, liquor boards and most recently ICASA, to name a few. ICASA is insisting that ICT companies that do not reach their black ownership targets risk losing their licenses.
ICASA recently announced it will be holding an enquiry into historically disadvantaged groups’ equity ownership in ICT companies. This is in reference to the ICT BEE sector code that came into effect in November last year and includes mobile and fixed-line operators.
In future, businesses wanting a licence from ICASA may be required to have a minimum of 30% black ownership combined with a high BEE score. The current black ownership requirement is 25%. It also means that suppliers to these businesses will need a high BEE scorecard or risk losing business.
This adds immense pressure for ICT companies to be compliant and reach their targets. Their suppliers are not spared from the rod because this will add even more pressure on them to have good BEE certificate which could lead to a domino effect across the supply chain.