The Broad-Based Black Economic Empowerment (B-BBEE) Commission, in partnership with the Government Communication and Information System (GCIS), recently hosted a dialogue aimed at addressing the challenges faced by South African youth in relation to economic empowerment and inclusion. The webinar, titled “Beyond 20 Years of B-BBEE: Youth Economic Empowerment Opportunities through Enterprise and Supplier Development (ESD),” took place on June 28, 2023, as part of the national campaign for Youth Month.
The dialogue, led by youth leaders, representatives of the SA Youth Economic Council, Black Management Forum, Black Business Council, Department of Small Business Development, and the B-BBEE Commission, delved into the past 20 years since the promulgation of Black Economic Empowerment legislation and policy. It sought to explore opportunities for youth economic empowerment and discuss strategies to overcome existing obstacles.
According to the B-BBEE Act (53 of 2003, as amended by 46 of 2013), B-BBEE aims to achieve viable economic empowerment for all black people, with a particular focus on women, youth, workers, people with disabilities, and those living in rural areas. The Act emphasizes transformation and redress through strategic initiatives.
During the dialogue, the B-BBEE Commission released the Annual National Status and Trends report for 2021, which revealed a slight decline of 1.5% in black ownership in businesses. The percentage decreased from 31% to 29.5% compared to the previous year. Additionally, the Commission shared the ESD research survey report for 2021, which focused on effective implementation of ESD funds.
The ESD element of B-BBEE measures contributions invested in supplier development and enterprise development initiatives. These initiatives aim to assist and accelerate the growth and sustainability of black-owned enterprises. The ESD report highlighted several challenges, including non-compliance with B-BBEE policy, particularly by large corporations who often view compliance as a mere “tick-box exercise.”
Ms. Sthandiwe Msomi from the South African Youth Economic Council emphasized the need for more companies to comply with B-BBEE and sector-specific codes to foster the necessary development of small, medium, and micro enterprises (SMMEs) in South Africa.
The lack of financial support for SMMEs emerged as another significant impediment to the growth of emerging youth enterprises. Mr. Ayavuya Madolo from the Black Management Forum stressed that some ESD beneficiaries struggle to scale up due to inadequate financial support, guidance, and mentorship. He called for organic mentorship programs in which large corporations actively support and guide SMMEs through the mentoring process.
The high youth unemployment rate, currently at 63.9% according to StatsSA figures, was identified as a major challenge contributing to the marginalization of the youth in economic participation. Commissioner of the B-BBEE Commission, Mr. Tshediso Matona, emphasized the importance of leveraging the human capital, talents, and ingenuity of young people to build a dynamic, inclusive, and growing economy that benefits all members of society, particularly the poor.
In response to the concerns raised during the dialogue, the Acting Director-General of the Department of Small Business Development (DSBD), Mr. Jeffrey Ndumo, announced several government interventions aimed at encouraging youth participation in the country’s economy. These interventions include the allocation of R1.4 billion, announced by President Cyril Ramaphosa in his State of the Nation Address earlier this year. The Small Enterprise Finance Agency (sefa), in collaboration with other role players, will increase support to the SMME sector through lending activities.
The DSBD has also established the Value Chain and Market Access support to facilitate increased market access for SMMEs involved in growing market value chains. In the current financial year, the department aims to link 250 products manufactured by SMMEs and cooperatives to domestic markets. Additionally, the DSBD has prioritized sectors with low barriers to entry and sunrise sectors like cannabis as part of its implementation of the Localisation Policy Framework.
Furthermore, Sasol has partnered with the Small Enterprise Development Agency (SEDA) to introduce Pop-up markets in various provinces and provide containerized Business Hubs in Mpumalanga and Free State to support township enterprises.
The Acting Director-General urged SMMEs and the youth to seize these opportunities and take advantage of the government’s support, which aims to nurture their businesses and ultimately contribute to the growth of the national economy.
The B-BBEE Commission, established in terms of section 13B of the B-BBEE Act, plays a crucial role in supervising and encouraging adherence to the Act. The Commission’s mandate includes investigating fronting and other violations, promoting good governance and accountability, and creating an effective and efficient environment for the implementation of the objectives of broad-based black economic empowerment.
The dialogue between the B-BBEE Commission, youth formations, and the Department of Small Business Development serves as a vital platform for addressing the challenges faced by South African youth in achieving economic empowerment. By identifying these challenges and proposing strategic solutions, the dialogue aims to foster an inclusive economy that empowers all members of society, particularly the youth.