Latest news with #BBBEEAct
IOL News
04-07-2025
- Business
- IOL News
Minister Malatsi's policy direction on EEIPs faces backlash from Cosatu
Communications and Digital Technologies Minister Solly Malatsi gazetted a policy direction on the role of EEIPs in the ICT sector, aiming to provide policy certainty and attract investment. Image: X/IOLGraphics Cosatu has expressed concerns over the proposed policy direction on equity equivalent investment programmes (EEIPs) in the Information and Communications Technology (ICT) sector. Communications and Digital Technologies Minister Solly Malatsi gazetted a policy direction on the role of EEIPs in the ICT sector, aiming to provide policy certainty and attract investment. The policy direction allows companies to meet empowerment obligations through alternatives to 30% ownership, such as investing in local suppliers, enterprise development, and job creation according to Malatsi. However, Cosatu spokesperson Matthew Parks, said the Broad-Based Black Economic Empowerment (BBBEE) Act provides two options for investors that include a 30% shareholder option or an equity equivalent option. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading The trade federation giant believes that the BBBEE Act is inclusive and provides accommodating options for all investors and not only for the wealthy. The federation is concerned that the proposed policy direction might allow companies like Starlink to bypass BBBEE requirements. "It's critical that Starlink, like all other investors, comply with the BBBEE Act, whether it is the shareholder or equity equivalent option," Parks emphasised. Parks cited examples of companies like IBM and Microsoft that have utilised the equity equivalent option. Cosatu argues that exempting one company from BBBEE requirements would be unfair. The Black Business Council's (BBC) spokesperson Masedi Sesele also shut down the idea saying it would be 'bending of legislation' to accommodate an individual or company. 'Legislation is there for all to comply with, no exception. Otherwise, the country will become lawless…The BBBEE legislation together with the Codes of Good Practice prescribes that any company wanting to do business in South Africa should implement all the elements of the BBBEE codes being ownership, management control, skills development, enterprise and supplier development, and socio-economic development. We don't know how the rumoured R2 billion is going to implement those important elements." Malatsi, through his spokesperson Kwena Moloto, said the policy direction sought to provide the 'much-needed' policy certainty to attract investment into the Information and Communication Technologies (ICT) sector, and specifically with regards to licensing for broadcasters, internet service providers, mobile networks, or fixed and mobile networks.
IOL News
03-07-2025
- Business
- IOL News
Cosatu, BBC slam Elon Musk's R2 billion investment plan to avoid BEE
Cosatu has slammed Minister Solly Malatsi's attempt to bypass South Africa's 30% local ownership law, purportedly for Elon Musk's Starlink. Image: AP Photo/Francois Mori The Congress of South African Trade Unions (Cosatu) has expressed concerns over the proposed policy direction on equity equivalent investment programmes (EEIPs) in the Information and Communications Technology (ICT) sector. Communications and Digital Technologies minister Solly Malatsi gazetted a policy direction on the role of EEIPs in the ICT sector, aiming to provide policy certainty and attract investment. The policy direction allows companies to meet empowerment obligations through alternatives to 30% ownership, such as investing in local suppliers, enterprise development, and job creation according to Malatsi. However, Cosatu spokesperson Matthew Parks, said the Broad-Based Black Economic Empowerment (BBBEE) Act provides two options for investors that include a 30% shareholder option or an equity equivalent option. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The trade federation giant believes that the BBBEE Act is inclusive and provides accommodating options for all investors and not only for the wealthy. The federation is concerned that the proposed policy direction might allow companies like Starlink to bypass BBBEE requirements. "It's critical that Starlink, like all other investors, comply with the BBBEE Act, whether it is the shareholder or equity equivalent option," Parks emphasised. The BBBEE Act requires companies to offer 30% shareholding opportunities to historically disadvantaged individuals or offer equity equivalents, such as supporting local manufacturers, creating jobs, upgrading worker skills, or investing in local communities. Parks cited examples of companies like IBM and Microsoft that have utilised the equity equivalent option. Cosatu argues that exempting one company from BBBEE requirements would be unfair. "It would not be sustainable to exempt one company as this would be unfair to other companies and undermine the law," Parks said. Cosatu proposes that the government ensures BBBEE reaches those who most need empowerment, namely workers and working-class communities. The federation advocates for worker empowerment through Employee Shareholder Ownership Programmes and support for locally produced goods. The Black Business Council's (BBC) spokesperson Masedi Sesele also shut down the idea saying it would be 'bending of legislation' to accommodate an individual or company. 'Legislation is there for all to comply with, no exception. Otherwise, the country will become lawless…The BBBEE legislation together with the Codes of Good Practice prescribes that any company wanting to do business in South Africa should implement all the elements of the BBBEE codes being ownership, management control, skills development, enterprise and supplier development, and socio-economic development. We don't know how the rumoured R2 billion is going to implement those important elements. 'Anyone who wants to invest in any country must comply with the ownership legislation of that country. This is happening worldwide and is not unique to SA. So BBBEE regulations should never be exempt. Black people, who constitute 97% of the population and own only 3% of the economy, can't continue to be sidelined in the name of foreign investments,' said Sesele. Malatsi through his spokesperson Kwena Moloto said that the policy direction sought to provide the 'much-needed' policy certainty to attract investment into the Information and Communication Technologies (ICT) sector, and specifically with regards to licensing for broadcasters, internet service providers, mobile networks, or fixed and mobile networks. Communications and Digital Technologies Minister Solly Malatsi defends ICT policy, denies special treatment for Starlink, and stresses the need to align sector regulations with transformation laws through equity equivalent investment options. Image: X/IOLGraphics Moloto, on Thursday, saidthat Starlink was not the only company being considered. Starlink, owned by Elon Musk, reportedly plans to launch its services in South Africa ahead of the G20 conference. However, the company intends to bypass the BBBEE law and its 30% ownership requirement, preferring instead to go the Equity Equivalent Investment Programme route where they have offered to invest R2 billion. Political parties such as the EFF, the African Transformation Movement (ATM) and the uMkhonto weSizwe Party (MKP) have been opposed to the proposed changes, citing concerns about Starlink's compliance with BBBEE laws. Political analyst Professor Sipho Seepe criticised the government and president Cyril Ramaphosa for 'forging ahead' with allowing Starlink to operate in South Africa, saying it would set the wrong precedent.. 'The imbroglio regarding Starlink is further proof that South Africa is up for sale under the Ramaphosa administration. This is what you should expect when you have a prepaid presidency. 'Every penny given to support his presidential candidacy was a future investment to ensure that the South African government would succumb to business demands…The very fact that the Ramaphosa regime is willing to suspend legislation and regulations for pieces of silver is not only shameful but also points to a lack of conviction and commitment by the ANC to the demands of Starlink would set the wrong precedent and open the floodgates by like-minded business people,' Seepe said.
IOL News
26-05-2025
- Business
- IOL News
Transforming BBBEE: The potential of the R100bn Fund
Unsplash the Transformation Fund aims to channel R100 billion into firms that are majority black-owned and controlled, as defined by the BBBEE Act. Image: Unsplash South Africa stands at a pivotal moment. Two months ago the Department of Trade, Industry and Competition (Dtic) unveiled a draft Transformation Fund Concept Document, sparking a bold conversation about the future of Broad-Based Black Economic Empowerment (BBBEE). This proposed R100 billion fund, to be raised over five years, isn't just a policy proposal - it's a potential catalyst for reshaping economic inclusion, empowering black-owned businesses, and redefining corporate responsibility. But with great ambition comes great scrutiny. Will this fund deliver transformative impact, or will it stumble under its own complexity? A Vision for Empowerment Announced by the Minister of Trade, Industry and Competition in January 2025, the Transformation Fund aims to channel R100 billion into firms that are majority black-owned and controlled, as defined by the BBBEE Act. Administered through a tax-exempt Special Purpose Vehicle (SPV), the fund will operate as a registered Financial Services Provider, overseen by an eight-member board appointed by the Minister, including two private-sector representatives. Funding will come from a mix of government, public entities, international donors, development banks, and—crucially—the private sector. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The private sector's role is where the fund's innovation shines. Companies can contribute through two key mechanisms: Equity Equivalent Investment Programme (EEIP): Multinationals without black shareholding can earn BBBEE ownership points by investing in Dtic-approved initiatives. The fund could become a new destination for these contributions, though it's unclear whether existing EEIPs will be required to redirect funds or if this applies only to new programs. Enterprise and Supplier Development (ESD) Points: The Dtic plans to amend the BBBEE Codes of Good Practice, allowing firms to earn ESD points by contributing to the fund. This could streamline compliance for companies while funneling capital to black-owned businesses. These mechanisms promise to align corporate incentives with national transformation goals, but they also raise questions about execution and impact. A Simpler Path to Compliance—or a Missed Opportunity? Under the current BBBEE framework, firms earn ESD points by directly supporting black-owned businesses with annual revenues of R50 million or less. This involves monetary contributions (like loans, grants, or investments) and non-monetary support (such as mentoring or training), fostering direct relationships that integrate beneficiaries into supply chains. The system incentivises swift action, as contributions must be delivered within the firm's financial year to count toward its ESD score. The Transformation Fund, however, introduces a tantalising shortcut: companies could earn ESD points 'immediately' by contributing to the SPV, bypassing the need to design and implement their own ESD programs. This could save time and resources, especially for firms struggling to meet ESD targets (2% of net profit after tax for supplier development and 1% for enterprise development). Tax incentives, including exemptions under section 56(1)(h) and deductions under section 18(A) of the Income Tax Act, sweeten the deal. But here's the catch: simplicity comes at a cost. Direct relationships between firms and ESD beneficiaries drive tangible benefits, like tailored support and supply-chain integration. By interposing the SPV, the fund risks diluting these connections, potentially slowing the delivery of benefits to black-owned businesses. The concept document's vagueness on the 'participation agreement' with the SPV adds another layer of uncertainty—will contributions come with strings attached? Voluntary Contributions, Strategic Choices The Dtic emphasises that contributions to the fund are voluntary, suggesting firms can stick with their existing ESD programs. But the proposed amendments to the BBBEE Codes could shift incentives, nudging companies toward the fund for its efficiency. The flexibility of the current system, where firms can scale ESD spending based on their strategy (while risking a downgrade if they fall below 40% of ESD points), may be constrained if the fund becomes the default path to compliance. Investors and business leaders should watch closely. The fund's success hinges on its governance, efficiency, and ability to complement—rather than compete with - existing BBBEE programs like the National Empowerment Fund, the Industrial Development Corporation, or the DTIC's Black Industrialist Scheme. Why create a new entity when established programs could be scaled up? The SPV must prove its value through transparency and measurable outcomes, or it risks becoming another layer of bureaucracy. An Investment in South Africa's Future The Transformation Fund is more than a policy - it's a bet on South Africa's economic potential. If executed well, it could unlock unprecedented opportunities for black-owned businesses, driving growth and inclusion. For investors, it signals a maturing market where transformation and profitability are increasingly aligned. Companies that embrace the fund strategically could strengthen their BBBEE ratings, reduce compliance costs, and build goodwill in a nation hungry for progress. Yet, the fund's promise depends on its delivery. Will the SPV operate with the agility and accountability needed to distribute R100 billion effectively? Can it amplify existing BBBEE efforts without overshadowing them? And will the private sector see contributions as an investment in shared prosperity rather than a compliance checkbox? South Africa's transformation journey is at a crossroads. The Transformation Fund could be a bold step toward economic justice—or a cautionary tale of ambition outpacing execution. As the Dtic gathers public comments, businesses, investors, and policymakers must engage to ensure this R100 billion vision delivers real, lasting impact. Pieter Steyn is a director at Werksmans Attorneys. BUSINESS REPORT
TimesLIVE
05-05-2025
- Business
- TimesLIVE
IAAE and FNB team up to help black-owned QSEs crack ‘The Growth Code'
I Am An Entrepreneur (IAAE), a leading platform dedicated to enabling entrepreneurial success, has announced the launch of The Growth Code, an ambitious 18-month strategic partnership with First National Bank (FNB). This initiative is specifically designed to empower black-owned small and medium-sized enterprises (SMEs) that are poised for scale, investment readiness, and long-term sustainability. In a time when small businesses are navigating complex economic landscapes, The Growth Code offers a timely and strategic response to the needs of high-potential entrepreneurs. With a unique focus on scaling businesses that have moved past the survival stage, the programme is tailor-made for those ready to grow strategically, attract investment, and make a broader economic impact — locally and beyond. Bridging the gap between growth and scale The Growth Code is more than just a business development initiative. It is a growth accelerator for entrepreneurs who are already generating significant traction and are now looking to expand their footprint. This bespoke programme combines financial support, sector-specific mentorship, and meaningful network access — equipping entrepreneurs with the tools they need to overcome structural and operational challenges associated with scaling. 'Our commitment is to meet entrepreneurs at the point of their need,' says Keitumetse Lekaba, MD at IAAE. ' The Growth Code is more than just a support system — it's a collaborative blueprint designed to help black-owned businesses create meaningful impact, scale with precision, and build legacies that resonate beyond the present.' Through this programme, selected entrepreneurs will benefit from: Funding opportunities: Access to capital and financial instruments needed to fuel growth. Tailored mentorship and guidance: Personalised coaching from seasoned industry leaders and business strategists. Strategic networks and partnerships: Opportunities to build relationships with corporate partners, investors, and like-minded business leaders. Customised solutions: Targeted interventions and support to address operational, market, and strategic scaling challenges. Eligibility criteria Entrepreneurs interested in applying for The Growth Code must meet these criteria: Be at least 51% black-owned as prescribed in the Financial Sector Charter issued in terms of the BBBEE Act, 2013 (FSC). Be a Qualifying Small Enterprise (QSE) business that operates at varying stages of development and in high job creation industries, such as retail and manufacturing services, and be revenue generating but not profitable; or revenue generating and profitable, but requires scale; Must have a business-to-business 'B2B' business model. Businesses that have a business-to-business-to-customer 'B2B2C' business model will be considered on a case-by-case basis and may be accepted based on merit; Have been in operation for two or more years within SA; Have a turnover of between R10m and R50m per annum; Demonstrate good financial health; Demonstrate job growth potential; Demonstrate passion and resilience for business; Require access to growth finance; and Consent to and pass necessary background checks. A shared vision for inclusive economic growth 'IAAE and FNB are united in our vision to empower the next generation of industry leaders. This partnership is about more than just financial support — it's about creating lasting, transformational impact,' says Palesa Moeletsi, Business Development Support manager at FNB.
Zawya
29-04-2025
- Business
- Zawya
South Africa's building funding ready B2B businesses: Applications now open for the SME Advancer Programme
There is no question about the crucial role that SMEs play in the South African economy. SMEs that offer products or services directly to other businesses (B2B enterprises) further strengthen the business ecosystem, drive innovation, and contribute significantly to job creation and regional development. The SME Advancer Programme, in partnership with FNB and small business development specialists Edge Growth, supports B2B enterprises by enhancing business growth, improving funding readiness, and providing access to innovative funding opportunities. Many SMEs miss out on funding due to a range of challenges – this programme is designed to help them overcome those barriers. Applications are now open for the 2025 intake, with submissions closing on 2 May. A total of 30 entrepreneurs across five key industries will be selected to participate in this 18-month programme. Delivered in a hybrid format (digital and in-person sessions), it is designed to maximise flexibility while optimising learning and impact. More than just a business development initiative, the SME Advancer Programme's core objective is to attract investment and secure funding for SMEs. To this end, it places strong emphasis on financial management and funding readiness. The programme also aims to support growth opportunities, improve operational efficiency, and promote sustainable business practices – all while helping SMEs navigate and apply for appropriate funding channels. Qualifying criteria Applicants must meet the following requirements: - Be a 51% black-owned and managed B2B enterprise (as defined in the BBBEE Act). - Operate within the manufacturing and engineering, food processing and supply chain, service delivery, technology hardware and supply, or retail and wholesale sectors. - Have an annual turnover between R1 million and R10 million - Have been in operation for over one year - Be SARS compliant and not undergoing business rescue or liquidation - Demonstrate a growth mindset and a commitment to fully participate in the 18-month programme. Entrepreneurs will undergo a six-stage application process, with only those who meet the requirements at each stage advancing to the next. Programme features Starting in June 2025, the programme provides a comprehensive support structure aimed at helping entrepreneurs strengthen financial and operational systems to confidently pursue funding. Key programme elements include: - Business diagnostic assessments to identify strengths, weaknesses, and growth opportunities - Financial health assessments to evaluate profitability, cash flow, and funding potential - One-on-one financial and business mentorship to implement tailored growth strategies - Specialist project support targeted to each enterprise's specific challenges. Participants will also have the opportunity to apply for innovative funding solutions as an outcome of their improved financial and operational foundations. Advancer Programme success stories: Young Peers, a civils and construction business, excelled in project execution but lacked key business skills in marketing, operations, and management. Through the programme, the business achieved major improvements in operational efficiency and transformed the founder from a technical expert into a well-rounded entrepreneur with critical business management skills. Coalition Energy, owned by Mariam Diedericks and based in Cape Town, faced challenges with inconsistent cash flow, outdated operations, and low client engagement. With the help of the programme, a clear sales and marketing strategy was developed. Sales training transformed the team's confidence and effectiveness, helping unlock new potential. The business is now focusing on expanding its client base, launching new services in the Renewable Energy Sector and Green Economy, and further optimising its operations. Star Centre George, owned by Kubeshnie Naidu, operates in the automotive sector. Despite having over 20 years' experience in motor body repair, Kubeshnie lacked formal business education, resulting in operational inefficiencies, stagnant revenue, and limited growth. Through the programme, interventions such as regular mentorship, performance assessments, SOP development, financial literacy training, and implementation of an OHS plan significantly improved strategic decision-making, financial management, staff productivity, and business sustainability. Interested in joining the SME Advancer Programme? Applications open Monday, 7 April 2025, and close on 2 May. Apply here! For general programme queries, contact the Edge Growth team at vharris@ Edge Growth specialises in developing small businesses and creating jobs and real transformation by connecting corporates and entrepreneurs, growing SMEs by addressing their key constraints: Access to finance, markets and skills. Its offering consists of three service areas, designed to achieve maximum impact: - ESD strategy for corporates and building SMEs in their value chain - Investing in and growing SMEs through fund management - Scaling businesses to full potential through accelerator programmes All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
