PRESENTATION ON BROAD-BASED BLACK ECONOMIC EMPOWERMENT

09 March 2018

PRESENTATION LAYOUT Introduction

Ushering in a new era for Empowerment (B-BBEE)

B-BBEE & SMMEs

B-BBEE Scorecard

Black Industrialists Support

Conclusion

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INTRODUCTION Radical Economic Transformation (RET) - changing the productive base

of the economy, as well as changing the patterns of participation in the

economy, drawing from the skills, capacity and entrepreneurial spirit of

entire population

Radical Transformation is about inclusive growth

B-BBEE at the centre of RET

The B-BBEE scorecard is aligned in accordance with government key

priorities that support RET.

The Generic Scorecard has five (5) elements – Ownership, Management

Control, Skills Development, Enterprise and Supplier Development &

Socio Economic Development

USHERING IN A NEW ERA OF

EMPOWERMENT

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B-BBEE

NGP

NDP

NIPF

IPAP

CSDP

NIPP

Skills D

evelop

men

t

DEVELOPMENTAL OBJECTIVES

Job

creation

Lo

calisation

Ind

ustrialisatio

n

Su

pp

lierD

evelop

men

t

B-BBEE & SMMEs

All entities with a turnover of less than R 10 M per annum areconsidered to be small and therefore exempted

For Black Owned Entities the exemption threshold is a turnover ofless R 50 M per annum

Large entities: R50 million and above.

All companies except for Exempted Enterprises (EMEs) mustcomply with all 5 elements.

B-BBEE & SMMEs The BBBEE Codes enhanced the recognition status of black

owned EMEs and Qualifying Small Enterprises (QSE).

An Exempted Micro Enterprise and Qualifying Small Enterprisethat is 100% owned by black people qualifies as a Level 1contributor.

An Exempted Micro Enterprise and Qualifying Small Enterprisethat are more than 50% owned by black people qualifies as aLevel 2 contributor.

No verification requirements for Exempted Micro Enterprises &black owned QSEs – this is in support of small businessdevelopment, as well as serving to eliminate the role ofintermediaries that exploit small businesses.

B-BBEE & SMMEs All Large Entities are required to spend at least 30% of their

Total Procurement Spend on SMMEs

All Large Entities are required to spend at least 40% of their

Total Procurement Spend on entities that are at least 51%

Black Owned

Furthermore the Codes require that Large Entities spend 3% of

annual NPAT in developing and supporting Black Owned SMMEs

The support could be monetary on non-monetary

The aim is to create new or expand existing emerging enterprises

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THE AMENDED GENERIC

SCORECARDElement Weighting

Compliance

Target

Ownership 25 points 25% + 1 vote

Management control 19 points (50% to 88%)

Skills Development 20 points 6% of payroll

Enterprise and Supplier

Development 40 points

PP = 80%

SD = 2% (NPAT)

ED = 1% (NPAT)

Socio-Economic Development 5 points 1% (NPAT)

TOTAL 109 points

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B-BBEE Status Qualification Criteria B-BBEE recognition

level

Level One Contributor ≥100 points on the Generic Scorecard 135%

Level Two Contributor ≥95 but <100 points on the Generic

Scorecard

125%

Level Three Contributor ≥90 but <95 on the Generic Scorecard 110%

Level Four Contributor ≥80 but <90 on the Generic Scorecard 100%

Level Five Contributor ≥75 but <80 on the Generic Scorecard 80%

Level Six Contributor ≥70 but <75 on the Generic Scorecard 60%

Level Seven Contributor ≥55 but <70 on the Generic Scorecard 50%

Level Eight Contributor ≥40 but <55 on the Generic Scorecard 10%

Non-Compliant Contributor <40 on the Generic Scorecard 0%

B-BBEE RECOGNITION LEVELS

BLACK INDUSTRILISTS SUPPORT BI is about value chain approach to development and

empowerment

A Black Industrialist is a juristic person that includes cooperatives, incorporated in terms of the Companies Act (2008)that are owned by black South Africans, as defined by the B-BBEE Act, who create and own value-adding industrial capacityand who provide long-term strategic and operational leadership toa business.

A Black Industrialist can also be a natural person.

High level of ownership (>50%) and/or exercises control over thebusiness;

Operate in manufacturing sector (IPAP);

Strategic and operational leadership

TARGETED SECTORS

Such entities should be operating in the manufacturing sectors

in line with the IPAP industrialisation path as follows:

TARGETED SECTORS …continued

Such entities should be operating in the manufacturing sectors

in line with the IPAP industrialisation path as follows:

POLICY SUPPORT MEASURES

• Black Industrialist

Financing Forum:

• IDC, NEF, DBSA, PIC,

LAND BANK, SEFA,

ECIC

• DTI Incentive SCHEME

( Cost-sharing grant

of between 30-50%

up

to R50million)

• Collaboration with

private financial

institutions

AC

CE

SS

TO

FU

ND

ING

AC

CE

SS

TO

MA

RK

ET

S

OT

HE

R N

ON

FIN

AN

CIA

L S

UP

PO

RT

• Government Procurement opportunities

• Collaboration with State Owned Procurement Forum ,

• Agreements with Multi nationals across the sectors on Enterprise

Development Program

• Collaboration with Private Sector to facilitate access to markets

• Training and capacity

building

• Portal for networking

( information sharing)

and

match-making

• Research and support for

innovation

• Quality standard and

productivity support

• Other support initiatives

within the economic

cluster of government

• Compliance and

competitiveness

• B-BBEE in SA is an economic, social and political

imperative

• B-BBEE must promote inclusive growth

• Partnerships between the private and the public

sector to accelerate transformation

• B-BBEE Codes and Sector Codes should be used

as mechanism to facilitate transformation in key

sectors of our economy

CONCLUSION

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THANK YOU

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