EXCERPT FROM "POVERTY & INEQUALITY RESOLUTIONS" by Dr. Temba Gola

• More value-added goods and services.
• More employable African people (Skills Development).
• Decrease in crime.
• More people productively employed.
• Entry into the global market and increased foreign
investment.
• Economic freedom.
• Increased Gross Domestic Product (GDP).
• Decrease dependence on the state i.e. Social Grants.

 

Disadvantages of Black Economic Empowerment

• The system includes an unfair emphasis on race in workers,
rather than qualifications and experience.
• The system only benefited the few politically connected
individuals’ rather equal consideration.
• Constant application.
• Lack of funding for the previous disadvantaged groups.
• Fronting – this where the business owners are whites, but
on paper the shareholders are registered as Africans who
do not benefit from the company and have no decision
making powers, but the company benefits from businesses
because of the company profile which is representative,
which might even include women and black men who fall
within the previous disadvantage group, that will increase
the score when the rating is done to select the bidder.

 

The challenges experienced Small and Medium Black Companies

The first problem which is experienced by small and medium
companies, is the lack of funding when they need to participate
in the tender process to compete with established companies.
The delays in the payment for the services which were rendered,
where payment takes more than 30 days against the standard
procedure that service providers should be paid within 30 days
- in most cases there is non-compliance with this rule. These
tendencies then kill the very same small and medium businesses
which must benefit from Black Economic Empowerment which is
aimed at reducing poverty and inequalities, and cause frustration
on the owners of these companies.
The other problem is corruption in the procurement process,
the unfair distribution of business where service providers collude
with officials who are in involved in the awarding of tenders to
the preferred companies, because of the vested interests because
of the benefits they get for the awarding of tenders to the family
friends or even politically connected cadres who influence the
awarding of tenders. There is problem with both companies
and officials who offer the bribes and doing of favours to obtain
the business either from the public institutions and private
companies.
The executive managers and political leaders must reconsider
the current procurement procedures which are open to abuse, by
both political office bearers and officials if the Black Economic
Empowerment is aimed at closing the gap between rich and poor
and create a fair equitable system which will benefit everyone
on an equal basis. Corruption kills competition amongst the
businesses and compromises service delivery, in which the
affected company renders a poor quality of service.

It should be noted that the BEE policy had good intentions
to redress the imbalances of the past racial policies, but the
technocrats and politicians are taking advantage of the loop
holes in the system which are used for personal or political gains
and this can be seen on the testimonies presented at Zondo
Commission State Capture Report which was presented to the
state president of South Africa in 2022.

 

GRAB YOUR PHYSICAL COPY BELOW: