Gauteng Business News

Send  Share  RSS  Twitter  05 May 2010

BEE: SA Business Owners Say BEE is Vital for Winning New Business


Recent Gauteng Business News

South African Privately Held Business (PHB) Owners believe that BEE is an important factor in terms of winning new business, with 61% of PHBs affirming this statement. This figure has remained fairly constant since 2008 (59%) and just 2% down since 2009 (63%).

This is according to global audit, tax and business advisor Grant Thornton’s 2010 International Business Report (IBR) which surveys over 7,400 Privately Held Business (PHB) owners across 36 economies.

When the South African data is assessed regionally, it is interesting to note that BEE is far less of an issue in KwaZulu Natal (53%) in terms of winning business, while Eastern Cape (66%), Gauteng (65%) and Western Cape (61%) rank BEE as an imperative.

Tony Balshaw, managing partner at Grant Thornton East London says, “The past 36 months have seen a similar level of attention on Broad-based BEE implementation with most PHB owners citing the issue as important. However, we believe that surviving the tough economic conditions was the primary focus in most companies over the past 18 months, rather than businesses giving specific attention to the B-BBEE codes.”

When asked to rate the importance of each element of the B-BBEE scorecard to their business, skills development (48%), employment equity (39%) and management (36%) were ranked the highest. The elements of ownership (35%), socio-economic development (34%), followed closely behind, with preferential procurement (31%) and enterprise development (27%) being cited as the least important factor in the B-BBEE scorecard, in terms of PHB business practice.

Tony Balshaw says, "Whilst the B-BBEE Codes have been operational for more than three years, the public sector have yet to harmonise their procurement policies, contained in the Preferential Procurement Policy Framework Act, with the B-BBEE Codes of Good Practice. We think the Broad-based scorecard is more important going forward to attaining effective empowerment in our nation, than the narrow-based elements of ownership and management.”
In order to achieve corporate BEE targets, South African business owners believe that developing people internally (77%) and fast tracking key employees (61%) are the most beneficial strategies to implement.

“PHB owners also turn to socio-economic development initiatives (58%) in an effort to improve their B-BBEE score,” says Balshaw. “Procurement policies are a powerful tactic too, in this regard, with 54% of business owners in South Africa agreeing that procurement from suppliers with certified procurement recognition levels play a vital role in ensuring businesses achieve targets set by the codes.”

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