Latest news with #TransformationFund
Eyewitness News
4 days ago
- Business
- Eyewitness News
DA wants independent review of BBBEE legislation with view to scrapping law
CAPE TOWN - The Democratic Alliance (DA) wants an independent review of the country's broad-based black economic empowerment (BBBEE) legislation with the view to scrapping the law. The party said that the legislation merely recycled and enriched the same "tycoons" and people that weren't disadvantaged, and could not stay in its current form. The party made the call in Parliament on Thursday, while presenting its alternatives to the Transformation Fund, which is being championed by Trade, Industry and Competition Minister Parks Tau. The DA said it rejected the Transformation Fund as another failed BBBEE scheme that enriched the elite and not workers. The party released its submission to the Department of Trade, Industry and Competition's Transformation Fund on Thursday, offering its alternatives. DA trade spokesperson, Toby Chance, said the fund blocked growth by focusing on race instead of investment or jobs. He also recommended changes to BBBEE legislation and a new approach to transformation. "So, in specific terms, we are recommending an independent review of the BBBEE legislation and regulations with a focus on impact on economic growth and job creation." He said that two recent surveys showed how South Africans were moving away from BEE and don't believe the government should continue pushing the policy.
Mail & Guardian
4 days ago
- Business
- Mail & Guardian
Transformation Fund a ‘looting scheme', says DA
The Democratic Alliance (DA) has lambasted the Transformation Fund proposed by the ANC as a sophisticated mechanism of 'looting' and economic capture that will only benefit the politically-connected elite. (Photo by Ihsaan Haffejee/Anadolu via Getty Images) The Democratic Alliance (DA) has lambasted the Transformation Fund proposed by the ANC as a sophisticated mechanism of 'looting' and economic capture that will only benefit the politically-connected elite. DA spokesperson for trade Toby Chance on Thursday said the party rejected the fund as another of the ANC's 'failed' broad-based black economic empowerment (broad-based BEE) schemes that 'enrich elites, not workers'. He told a media briefing that the DA'S submission to the department of trade, industry and competition presented an alternative vision of economic empowerment that transcends racial boundaries. The The ANC says its black empowerment drive aims to reverse the economic imbalances which favoured whites. On Thursday, Chance argued that the transformation fund would block growth by focusing on race and not on investment or job creation and that the DA backed 'real empowerment' through economic growth and striving to reach the United Nation's sustainable development goal targets. 'The department's concept document has attracted much attention, in terms of impracticality. Organised business and think tanks have all been vocal against the fund, as it will not deliver economic growth and job creation,' he said. He added that a recent survey showed South Africans were against the government continuing with broad-based BEE after years of failed implementation. He said the fund was a 'continuation of broad-based BEE policies which have failed to bring disadvantaged South Africans into the economic mainstream and have left eight million people unemployed, up from five million people in 10 years, while enriching a small elite'. The fund would not address barriers to foreign investment inherent in broad-based BBEE and 'other heavy-handed government policies'. 'Over a period of 20 years, the narrative and the orthodoxy around transformation has been corrupted. It's not real transformation. It's actually seizure of assets to the benefit of a small number of people'. DA national spokesperson Karabo Khakhau described the fund as 'an activated looting scheme'. 'Funnelling money to a select few in the name of transformation, is not transformation. In fact … it is an activated looting scheme that is always available for evil ones to manipulate,' she said. 'Prioritising funding for the same politically connected people or elites in the name of being pro black is not transformation. That is corruption, and that's what we need to be able to crack the whip on here, and that's why we're anti this, this whole idea that such funds are supposed to work. 'You take a Karabo, and on the basis of Karabo being black, you give her an opportunity for funding. She gets her success. And instead of moving on to [other candidates] …you take the same Karabo again, and you make her the same dipper of the same system. 'And then Karabo becomes loyal to you and your organisation in how she manipulates her tenders, in how she trades and who her trade partners are and she becomes a tycoon of a system that is only focused on one person, while black, coloured and Indian people who are supposed to be empowered … fall behind the line.' DA deputy spokesperson on trade Mlondi Mdluli said empowerment and redress were 'deep issues' that were sensitive and should be broached with 'compassion, clarity and effectiveness'. He argued that existing state-supported funds such as the Black Business Supplier Development Programme and the National Empowerment Fund had failed to address systemic economic challenges. Chance said the DA's alternative vision to the fund detailed in its submission emphasised creating an environment where 'everybody can grow', regardless of race. This includes investing in quality education, skills development, cutting bureaucratic red tape and fostering an inclusive economic growth strategy. True empowerment comes through growing the economy, not through redistributive mechanisms, he argued. Responding to a question on the narrative that the DA was anti-transformation, and whether the issue could destabilise the government of national unity, DA national spokesperson Willie Aucamp said ANC governments of the past had not empowered the majority of black people. 'Their policies were not pro black because it did not empower the largest amount of black people in this country,' he said. 'When the DA entered this government of national unity, we said that we've got two main aims. The one is to grow our economy, and the second one is to create jobs. And in everything we do, we ask ourselves whether what we are doing will contribute towards that, and if it's not, we won't do it. 'But we did not agree to be co-opted by the ANC, the Democratic Alliance is a party in our own right, and we will remain so. In most of the issues that come up in the GNU we do agree with each other, but where we disagree, we will not be a rubber stamp to just say yay and amen into whatever it is that the ANC does that we might differ with.'
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. 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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
The Herald
21-05-2025
- Business
- The Herald
Government 'will remain committed to R100bn transformation fund'
Small business development minister Stella Ndabeni-Abrahams has encouraged women to participate in the public comment process for the government's R100bn transformation fund aimed at helping small businesses access funds and markets. Speaking on Tuesday at the Women's Dialogue and Stakeholder Luncheon in Paris, Ndabeni-Abrahams called on women to share their opinions of the fund despite criticism in some quarters that the concept was flawed. 'There are people hell-bent on undermining this transformational agenda that we want to drive. There are people already who are committed that they will take that process to court,' said Ndabeni-Abrahams. She said the government would stand by the fund despite opposition from some quarters, including major business organisations. 'Yes, we are a government that promotes nonracism, but we are a country with a particular history that is not going to be washed away. We are standing by our constitution in terms of addressing past imbalances,' said Ndabeni-Abrahams. The Transformation Fund was proposed by the department of trade, industry & competition. It aims to raise R20bn over the next five years and disburse R100bn, using a mix of contributions from enterprise and supplier development (ESD) obligations under B-BBEE codes of good practice and voluntary donations by big corporations. After anger that the fund would impose new obligations for corporations, trade industry & competition minister Parks Tau allayed fears, saying it would not replace existing ESD programmes and contributions would be voluntary. Ndabeni-Abrahams said the government was pushing its plan to allocate 40% of public procurement to women, however women needed strategic procurement opportunities. 'We do see that the government and the private sector still want to use women to only provide catering. We want to ensure that our role does not remain one that provides food and does the décor. We (women) are bigger than those services and that is why we are working with the department of trade, industry & competition to ensure access to funding for small business,' she said. The Women's Dialogue and Stakeholder Luncheon is the first formal engagement of the France South African Investment Conference led by Deputy President Paul Mashatile. Philisiwe Mthethwa, non-executive director at the Industrial Development Corporation, also speaking at the event, said gender equity was crucial and not only a women's issue but a societal imperative. 'Let us forge partnerships rooted not only in profits but in purpose. Let us walk out of this room with collaborations formed, capital committed, and courage renewed. We are not here because we were invited, we are ready to lead, ready to build, ready to change the story for every woman and every girl, every unseen hereon still waiting to be seen,' she said. TimesLIVE
TimesLIVE
20-05-2025
- Business
- TimesLIVE
Government 'will remain committed to R100bn transformation fund'
Small business development minister Stella Ndabeni-Abrahams has encouraged women to participate in the public comment process for the government's R100bn transformation fund aimed at helping small businesses access funds and markets. Speaking on Tuesday at the Women's Dialogue and Stakeholder Luncheon in Paris, Ndabeni-Abrahams called on women to share their opinions of the fund despite criticism in some quarters that the concept was flawed. 'There are people hell-bent on undermining this transformational agenda that we want to drive. There are people already who are committed that they will take that process to court,' said Ndabeni-Abrahams. She said the government would stand by the fund despite opposition from some quarters, including major business organisations. 'Yes, we are a government that promotes nonracism, but we are a country with a particular history that is not going to be washed away. We are standing by our constitution in terms of addressing past imbalances,' said Ndabeni-Abrahams. The Transformation Fund was proposed by the department of trade, industry & competition. It aims to raise R20bn over the next five years and disburse R100bn, using a mix of contributions from enterprise and supplier development (ESD) obligations under B-BBEE codes of good practice and voluntary donations by big corporations. After anger that the fund would impose new obligations for corporations, trade industry & competition minister Parks Tau allayed fears, saying it would not replace existing ESD programmes and contributions would be voluntary. Ndabeni-Abrahams said the government was pushing its plan to allocate 40% of public procurement to women, however women needed strategic procurement opportunities. 'We do see that the government and the private sector still want to use women to only provide catering. We want to ensure that our role does not remain one that provides food and does the décor. We (women) are bigger than those services and that is why we are working with the department of trade, industry & competition to ensure access to funding for small business,' she said. The Women's Dialogue and Stakeholder Luncheon is the first formal engagement of the France South African Investment Conference led by Deputy President Paul Mashatile. Philisiwe Mthethwa, non-executive director at the Industrial Development Corporation, also speaking at the event, said gender equity was crucial and not only a women's issue but a societal imperative. 'Let us forge partnerships rooted not only in profits but in purpose. Let us walk out of this room with collaborations formed, capital committed, and courage renewed. We are not here because we were invited, we are ready to lead, ready to build, ready to change the story for every woman and every girl, every unseen hereon still waiting to be seen,' she said.
