What Is BBBEE?

What Is BBBEE?

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South Africa went through a system of racial segregation from 1948 until 1994 called Apartheid (Afrikaans word meaning “separateness”) where race determined social, economic and political advantages or disadvantages.

In 1994 South Africa elected its first democratic government which launched BBBEE (Broad-Based Black Economic Empowerment) in 2003 as a racially selective program to empower previously disadvantages groups and enhance economy.

The mandate of Broad-Based Black Economic Empowerment is to increase the number of black people that own, manage, control and gain employment in South Africa’s economy.

The Broad-Based Black Economic Empowerment (B-BBEE) Strategy was published as a precursor to the B-BBEE Act, No. 53 of 2003 with its clear mandate to increasing the number of black people participating in the country’s economy.

Related: BEE Compliance Not Enough To Expand SA’s Economy

The BBBEE Legislative is constantly being reviewed and adjusted, with the rollout of the latest amended BBBEE Codes of Good Practice on the 11th October 2013, effective the 1. May 2015 which made BBBEE compliance almost unavoidable for many industries and especially for larger business entities.

 

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Who is benefiting from BBBEE?

“Black People” means African, Coloured and Indian South African citizens.

The Definition of “black people” now accords with the definition as contained in the Revised BEE Codes and continues to refer to the generic term which means Africans, Coloured and Indians provided they are citizens of the Republic of South Africa by birth or descent or who became citizens of the Republic of South Africa by naturalisation before 27 April 1994 or on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date.

The BBBEE Levels

BBBEE Contribution Level “Old”
Scorecard Points
Amended
Scorecard Points
BBBEE Procurement Recognition Level
1 ≥100 points ≥100 points 135%
2 ≥ 85 but < 100 ≥ 95 but < 100 125%
3 ≥ 75 but < 85 ≥ 90 but < 95 110%
4 ≥ 65 but < 75 ≥ 80 but < 90 100%
5 ≥ 55 but < 65 ≥ 75 but < 80 80%
6 ≥ 45 but < 55 ≥ 70 but < 75 60%
7 ≥ 40 but <45 ≥ 55 but <70 50%
8 ≥ 30 but < 40 ≥ 40 but < 55 10%
Non-Compliant < 30 < 40 0%

Related: What To Look For In A B-BBEE Partner

The Investment House
The Investment House combines leading-edge industry expertise with creative talent and strategic thinking to reach the objectives of our clients. Our mission is to contribute with Business Development and Business Intelligence to an empowered nation enjoying financial freedom and prosperity. Our vision is to be South Africa's most successful business developer creating sustainable economic growth and wealth.