Monday, March 30, 2009

Black Economic Empowerment : The real beneficiaries

This past Saturday I went to an SME workshop, planned and organized by Magna Carta for Standard Bank. We engaged in a conversation that birthed this post, with some of the delegates.

The conversation began with Anthony saying, since the initiation of Black Economic Empowerment (BEE) many white owned companies were disgruntled. He says his courier company lost contracts with regular clients, which they negotiated after 1994 therefore still within the new dispensation.

Contrary to popular belief, South Africa’s black owned companies also hardly benefit from this innovation that was meant to assist in the emergence of new businesses. Most government projects, known as tenders, don’t reach the youth owned companies, as was intended. These tenders under the banner tag of “BEE” return a chunk of the profits as bribes to government employees.

One of the entrepreneurs I know whose company was built from these tenders confessed to having paid bribes for the past 5years and now outsources most of the labour, but pockets the profits. The other, an entrepreneur who has been in business for over 10years hasn’t seen any benefit from BEE. In fact he discourages any other company to embark on this direction. Both are ‘wholly black owned’ companies and account for very little of the intended recipients.

Evidently race and the qualifying criteria are by far not the least restrictions.
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