Companies that fail to meet black empowerment requirements could be prosecuted.
So said Zodwa Ntuli, head of the Broad-Based Black Economic Empowerment (BBBEE) Commission, at the release of its 2019 report. The report indicated there had not been significant progress in meeting BBBEE targets.
The report is based on reports voluntarily submitted to the commission. These include 150 companies listed on the Johannesburg Stock Exchange (JSE), 43 state companies, and nearly 6 000 other companies.
According to the commission, overall black ownership increased from 25% to 29%, between 2018 and 2019. In 2019, management control was at 39%, with black board control of JSE companies being at 43.1%. The level of ownership on the JSE was lower, with only 3.3% of JSE companies being completely black controlled. However, this represented an increase from 2018, when 1.2% of JSE companies had been under 100% black control.
Ntuli bemoaned the low levels of compliance with BEE reporting requirements and said that those who had violated the BBBEE Act could be prosecuted.
IRR analysts point out that there is little evidence that BBBEE has worked in South Africa. That black unemployment remains high and income inequality among black South Africans is the highest out of all race groups, and continues to grow, implies that the benefits of BBBEE are accruing to a relatively privileged, well-connected few. Despite this, President Cyril Ramaphosa has said that BBBEE will be accelerated in the coming months.