What Economic Transformation actually happened in South Africa in 2019?
The B-BBEE Commission recently released the annual B-BBEE trends report for the 2019 calendar year.
The purpose of the report is to assist the B-BBEE Commission to determine how organs of state, public and private entities in South Africa are performing against the generic and sector Codes of Good Practice.
The report assesses ownership, management control, skills development, enterprise and supplier development and socio-economic development.
The report is based on compliance reports received from 150 companies listed on the JSE, 43 organs of state and 5,818 other entities whose B-BBEE certificates were uploaded onto the B-BBEE Commission’s portal.
- Black ownership has increased from 25% in 2018 to 29% in 2019. In 2018, 100% black-owned JSE listed entities was 1.2% but in 2019 this has now increased to 3.3%.
- The % of black South Africans holding Directorships has decreased from 45% in 2018 to 39% in 2019.
- The % of black South Africans holding Directorships in the JSE has increased from 38.3% in 2018 to 43.6% in 2019.
- The B-BBEE Commission has mentioned invoking the relevant penalties of the JSE Listing Requirements if these are not met.
- The B-BBEE Commission has noted that, although black ownership has increased in the 2017 – 2019 period, management control has not increased accordingly which indicates that black people are not involved in the control and core operations of businesses.
- The three least performing sectors on ownership in 2018 were AgriBEE (11.19%), MAC (19.55%) and financial (21.64%), with construction (48.03%), transport (40.53%) and forestry (33.66%) showing relatively good progress.
- Contributions towards skills development, enterprise and supplier development have decreased in 2019.
- Black people continue benefiting from bursaries, partnerships and incubation opportunities under these elements, however, absorption into a job or sustainable supply chain remains a challenge.
- The report shows that 49.3% (50.9% – 2018) of JSE listed entities are at level 4 and higher, while 50.7% (44.5% – 2018) entities are between level 5 and non-compliant B-BBEE status.
- The B-BBEE Commission reiterates its concern about the low level of reporting and the overall slow pace of economic transformation. To address this, the B-BBEE Commission has started conducting site visits on the reports submitted to verify the accuracy of the reports submitted and to identify best practices to share with other measured entities. Also, preparation to refer measured entities that failed to submit reports are underway as their conduct is not only a violation of the B-BBEE Act, but enables the harbouring of fronting arrangements.
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