Black ownership of SA businesses falls below 30%

The commission has called on Parliament to strengthen the B-BBEE Act to incorporate administrative sanctions for non-compliance.
Image: Bloomberg

Black ownership of businesses in South Africa dropped 1.5 percentage point to below 30% last year, as Africa’s most industrialised nation struggles to economically empower a larger portion of its population.

Black management control also dropped 5.4% percentage points to 51.6%, the B-BBEE Commission said in an annual report. The commission’s mandate is to supervise and encourage adherence to the Broad-Based Black Economic Empowerment Act passed almost two decades ago to address inequities stemming from apartheid in South Africa, where four in five people are Black.

The downward trend has persisted despite the more than 500 B-BBEE ownership deals worth over R600 billion ($36.1 billion) reported to the commission since 2017 that aimed to facilitate the transfer of ownership to Black people.

“There is a need for less-expensive and unencumbered funding for Black people to make acquisitions that can give real value in the hands of Black people, especially from government funding institutions,” the commission said. Compliance also remains sluggish, as the number of certificates uploaded by verification agencies dropped 76% from the 2019 level.

The report is based on annual compliance reports submitted from 130 listed companies, 82 state entities and data gathered from 1 373 entities whose B-BBEE certificates were uploaded to the commission’s certificate portal.

Other findings from the report include:

  • Board control of companies listed on the Johannesburg Stock Exchange by black people was at 39% (21% male, 18% female), compared to 28% in 2020.
  • 0% of entities listed are 100% black-owned, same as in 2020. This is down from 3% in 2019 and 1% in 2018.
  • The transportation and tourism sectors have the highest average Black ownership at 78% and 52%, respectively, while the agriculture and financial sectors recorded the lowest Black ownership at 17%.

The commission has called on Parliament to strengthen the B-BBEE Act to incorporate administrative sanctions for non-compliance.

In June, President Cyril Ramaphosa appointed 14 people to a Black economic-empowerment council to address inadequate progress with improving some measures of Black involvement in the economy almost three decades after the end of apartheid. The president highlighted Black management control, broadening procurement and skills development as areas needing attention.

© 2022 Bloomberg

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The wheels on the bus go BEE BEE! Its not working lets spin it some more.

When we work out race-based ownership, how does the project deal with shares owned by pension, retirement and savings plans? Is PIC shareholding counted white, black, grey or is it ignored? I’d wage that across the PIC and the ten largest institutions, fund ownership is probably more than half the JSE?

While it is a very serious topic, the reality is a (black) joke. It is not really “broad based” except for the size of the beneficiaries. It is all about enrichment of ANC elite cadres. No more and no less.

Identity politics, and BEE in particular, is an instrument that turns a potential GDP per capita of $30 000 into an actual GDP per Capita of only $6000.

This shortighted socialist redistributive policy disempowers the unemployed masses to enrich the wealthy ANC cronies. BEE is Robin Hood in reverse that creates the largest inequality on earth.

Graphically and statistically showing the failure of this lopsided plan. The result being the slow collapse of the economy with emigration of professional and technical experts to countries with more equitable opportunities for their skills.

If this policy of the ANC is dragged out to its final conclusion; every white owned business will have to be handed over to the black majority and whites will simply be “employed”. That’s their vision of the apartheid past, which to some extent is correct, but to attempt to do the same thing now?

Lunacy.

End of comments.

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