TRANSFORMATION INSIGHTS: ARE WE THERE YET?

South Africa’s transformation agenda is centered on BBBEE policies. Still, our country has been undergoing a slow transformation process.

On 31 July 2022, the B-BBEE Commission released its 2021 National Status and Trends on B-BBEE Transformation Report to the market. There have been mixed reactions to the report regarding the number of entities covered, as it may depict only some of the transformation progress in South Africa. In this article, we will unpack a few key areas and highlights of the report.

B-BBEE REPORTING REQUIREMENTS: WHAT ARE THEY?

Specifically, Section 13 (G) states:

• (1) All spheres of government, public entities, and organs of state must report on their compliance with B-BBEE in their audited annual financial statements and annual reports required under the Public Finance Management Act, 1999 (Act No. 1 of 1999).”

• (2) All public companies listed on the Johannesburg Stock Exchange must provide to the Commission, in such manner as may be prescribed, a report on their compliance with broadbased black economic empowerment.

• (3) All Sectorial Education and Training Authorities contemplated in the Skills Development Act, 1998 (Act No. 97 of 1998), must report on skills development spending and programmes to the Commission.”

A Summary Of National Status And Trends Over The Last 5 Years

Overall, black and black women’s ownership and compliance for all elements declined significantly in 2021. Despite this, it is interesting to note that Level 1 - 4 B-BBEE contributors have increased.

B-BBEE VERIFICATION CERTIFICATE LEVEL GROUPINGS – 4-YEAR ANALYSIS

• There was a substantial decrease in certificates uploaded, but no significant changes were observed in the levels 1-4 and 5-8 categories.

• Between 2020 and 2021, most indicators across Large, QSEs, and JSE-listed entities did not change more than 2%, except for Level 1-4 JSE-listed entities, which increased by 4%.

A 4-YEAR ANALYSIS OF B-BBEE ELEMENT SECTOR TARGETS

• Furthermore, the table shows a lack of sustained growth, with amounts in green indicating an increase and amounts in orange indicating a decrease.

• 3 out of 5 elements experienced a decrease based on the weighted average of certificates submitted on the B-BBEE Certificate Portal in 2021.

4 YEAR ANALYSIS OF THE B-BBEE VERIFICATION CERTIFICATE PORTAL

• From 2018 to 2019, the number of certificates uploaded to the B-BBEE Certificate Portal has grown exponentially.

• As a result, 1,373 (2021) certificates were uploaded compared to 5,818 (2019).

• As a result of this dip, GDP nosedived during the same period.