Tag Archives: Broad-Based Black Economic Empowerment

Corporate South Africa to assist entrepreneurs

The National Empowerment Fund (NEF), an agency of the Department of Trade and Industry, has unveiled the Enterprise Development Fund (EDF) to invest in small, medium and micro black businesses by way of financial loans varying anywhere between R250 000 (US$37 000) and R75-million ($11-million).

The only real distinction between the EDF and various other agencies of the department is the fact that EDF raises its capital as a result of contributions by big businesses, who will shell out 3% of their annual profits in the project.

 

This simply means that big business is going to be assisting smaller ones get established.

The NEF has recently obtained funding of R2.3-billion ($298-million) coming from the Treasury, and is also getting excited about a prospective cash injection coming from the top 40 companies on the Johannesburg Stock Exchange. This sum of money could quite possibly meet or exceed R5.3-billion ($749-million).

Making contributions towards empowerment

Philisiwe Buthelezi, the fund’s CEO, stated: “We are thinking about creating a brand new industrial capacity by way of inputs driven by black South Africans.”

She revealed that the fund is designed to bridge the gap between advantaged and disadvantaged citizens – “not by taking from the haves, but stating the way we can partner to empower the have-nots.”

As a result of giving 3% of their profits, private establishments are going to generate points as an a assessed entity according to the Broad-based Black Economic Empowerment Act of 2003, which states that comapnies making contributions will earn a 15% weighting towards 100% compliance.

The financing is voluntary however if businesses do not comply, they have to deal with shedding their empowerment accreditation points.

Contribution will lead to specific tax benefits – firms that do conform will get a tax benefit of up to 10% off their taxable income for the reason that NEF is tax-exempt, as a result companies that commit to the fund defintely won’t be subject to a donations tax.

 

NEF CEO Philisiwe Buthelezi

 

Lawrence Mavundla, president of the National Federated Chamber of Commerce and Industry, explained: “The legislation states that businesses need to contribute 3% when it comes to enterprise development and 2% ought to be allotted to corporate social investment.”

Mavundla depicted his expectation that big corporate will likely be prepared to contribute to the fund. “I sincerely hope the NEF will in addition provide post-funding mentorship to assist these small black companies to develop,” he added.

For the reason that a shortage of practical experience and skills can be described as risk to the success of small companies within a competitive industry – and quite a few of them do falter even after funding – post-funding mentorship can be considered as a means to fix this challenge.

Leading organizations which include Volkswagen, Chrysler, Bank of America, Merrill Lynch, Nestle and Edcon already have indicated interest in the fund, said the NEF.

“To make investments and expand the fund a business is required to sign a letter of participation, agreeing to pay out more than a minimum contribution of R5 million ($747 000),” explained Buthelezi.

Funding small business in South Africa

South Africa boasts a variety of agencies geared towards improving small businesses.

They range from the Small Enterprise Development Agency, which offers business development and support services for small enterprises; Khula Enterprise Finance, which happens to be associated with funding of small to medium enterprises; the Industrial Development Corporation, and others.

Young entrepreneurs aided

The inclusion of young entrepreneurs within the overall economy is in addition a national priority, reinforced by agencies for example, the National Youth Development Agency (NYDA).

Because of its major target group aged between 14 and 35 years, the NYDA endeavors to scale back unemployment within this age bracket, as well as boost social cohesion.

The NYDA assists young entrepreneurs to establish new businesses and even to develop established ones. It was actually introduced on Youth Day, 16 June 2009 by President Jacob Zuma and was the consequence of a merger between the Umsobomvu Youth Fund and the National Youth Commission.

Among the many NYDA accounts of success is the one about a 25-year-old Ntokozo Kenneth Ngcobo, who is the owner of Miazi CC, an electrical design and installation company. Miazi boasts a variety of big clients including Eskom and government departments.

Ngcobo said: “I believe my electrical engineering diploma and employment experience offered me a firm foundation in addition to make it possible for me to network with the relevant people.”

He explained that his objective for the next five years is to break into new markets, because he at present operates exclusively in his home town of Pietermaritzburg in KwaZulu-Natal.

Source: mediaclubsouthafrica.com

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Black Economic Empowerment under the spotlight

President Jacob Zuma

One of the main flaws around the enactment of Black Economic Empowerment (BEE) most likely was the over-emphasis on the subject of diversity of ownership together with senior management.

This has been one of several crucial concerns brought up during the Black Economic Empowerment Advisory Council meeting, chaired by President Jacob Zuma on Friday, which reviewed how to take the program of economic transformation into the future as well as encourage inclusive growth.

“The unintentional results of this specific over-emphasis is without a doubt fronting along with tender abuse. We are satisfied of the fact that the Council spoke out so firmly in opposition to fronting which happens to be one of the leading obstructions to the implementation of BBBEE.

“Fronting is unquestionably an insult to the dignity of the poor and in addition we are required to respond decisively in opposition to it. I am delighted of the fact that the Council is so motivated to work together with us to do something against this heinous practice,” Zuma said.

As reported by the Presidency, there was clearly a special focus on the implementation of the New Growth Path along with the role of Broad-Based Black Economic Empowerment (BBBEE) with regard to job creation during the meeting.

Specifically, the meeting emphasized the fact that BBBEE was not simply about big business deals for a handful of individuals in society but at the same time required a hand in empowering common citizens.

“With regard to this, the Council consider it necessary for the consistent enactment of broad-based BEE in every one of the sectors of the economy, with the intention that the policy touches the lives of a lots more people,” the Presidency said.

The meeting furthermore pointed out that BBBEE was in fact central to inclusive growth. Help and support was given to provisions of the New Growth Path which in turn demands a much more resilient focus on the broad-based components of the BEE regulations.

This included ownership by communities and workers, greater skills development along with career-pathing for all those working people, ongoing help and support for small enterprise and cooperatives, together with a completely new focus on procurement from local producers in an effort to assist job creation.

The meeting at the same time remarked that in order to contribute to job creation, BBBEE is required to, amongst others, encourage new enterprise development, stimulate local procurement and additionally make improvements to skills development and employment equity.

Participants additionally concluded that fronting would have to be exterminated coupled with effective mechanisms, and this includes possible punitive measures against those responsible for and guilty of fronting practices, would have to be put in place to stamp it out.

“It was decided that government, together with the help and support of the BBBEE Advisory Council, would definitely guarantee a revision of the BBBEE Codes in order to promote job creation, investment in small business and cooperatives, broad-based ownership and employment equity,” the Presidency said

The Council at the same time proposed that government will need to immediately make sure that appropriate monitoring and evaluation of the implementation of the BBBEE Act.

Source: BuaNews

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DTI finalises training programme designed for B-BBEE

 

The Department of Trade and Industry (dti), in conjunction with three universities, is finalising the creation of a Standardised National Training Programme for Broad-Based Black Economic Empowerment verification.

“Since the creation of the Codes of Good Practice for B-BBEE, the department has attempted to coordinate the verification sector as well as set benchmarks on B-BBEE verifications,” explained the department.

In 2009, the dti gazetted sector charters as sector codes in terms of Section 9(1) of the B-BBEE Act. These represent the tourism, forestry, construction, transport, and chartered accountancy sector codes.

The dti said precisely the same rating guidelines applicable in the measurement associated with the generic score-card can be applied when it comes to sector codes. Furthermore, it is the obligation of each and every verification organization to acquaint themselves with the sector codes.

“The dti, jointly together with the government departments in charge of the gazetted sector codes, has set out on an information campaign to additionally acquaint verification agencies with the imperati

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