American President, Donald Trump’s inclusive policies coupled with China’s, France and Germany’s introspection on development investment could create a global economy riddled with isolation policies, that’s according to Oriole Consulting, a legal consultancy firm based in Johannesburg. Natalie Grundlingh, a BEE consultant at the firm, said economies built on “isolation policies” generally discourage external investment and focus on localised business growth. Domestic policies go under the spotlight and a substantial amount of time and resource is dedicated to ensuring that these policies benefit all who live in that country.
Natalie said South Africa will be no different. “With dwindling foreign investment, the ruling ANC already alludes to intense changes to local economic policies in an attempt to drive B-BBEE, economic transformation and overall growth. For Government, transformation is a vital support pillar in long-term economic growth,” she explained.
Driver of change
Natalie believes the general consensus is that with over 20 years of economic freedom in SA, very little economic transformation has actually taken place. “Broad-Based black economic empowerment (B-BBEE), introduced to address the challenge of economic transformation, remains the main vehicle for achieving equality,” she explained.
“Empowerment is the main driver of change using B-BBEE as a vehicle. From qualifying small enterprises to larger corporates, B-BBEE certification is now a mandatory exercise.
B-BBEE Verification
For companies intending to continue to be B-BBEE verified, Natalie listed the follwing points to consider:
- B-BBEE verification period
Your next B-BBEE verification will be done using your company’s activities under the current financial year. This is in accordance with the Amended Codes of Good Practice.
- Ownership and Management Control
These elements are verified as at the date of rating and so any changes to these elements after your financial year end need to be monitored to ensure that your score during verification does not drop below your expectations.
Skills Development, Enterprise Development, Supplier Development and Socio-Economic
Development
If your B-BBEE plan requires you to have implemented programmes in any of these areas, these programmes need to be implemented during your financial period. Any spend made after your financial year end will not be allowed to be counted during verification.
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- Preferential Procurement
As your procurement period is now basically complete, it is unlikely that any major spends can be made. Ensure that you know which of your suppliers are compliant and that you have a copy of their latest B-BBEE certificate.
Future waits
In her conclusion, Natalie said with a global economy riddled by inclusive growth, developing economies, like South Africa, will not be able to use trade to boost their growth potential. At the same time, the international cooperation that occasionally provided some cushion against financial or economic hardship in the developing world could break down. The Governments vehicle of empowerment is under pressure to perform. “B-BBEE is clearly here to stay and in an effort to boost local economic growth, B-BBEE has no option but to succeed,” she concluded.
