“The amendments would seek to address criticism that BEE was only creating a class of passive black shareholders rather than entrepreneurs actively engaged in economic activity.” (Business Report)
This is positive news for the so-called Makoya Entrepreneurs who will now be afforded the opportunity to take ownership of the South African economy through BEE transactions. In this context Makoya Entrepreneurs refers to those businesses that enhance production and bolster growth in the economy.
The Department of Trade and Industry has announced that the shift is from equity deals to enterprise development. This will allay criticism that BEE is creating a class of passive black shareholders rather than entrepreneurs actively engaged in economic activity. The growing culture of entitlement and BEE-fronting needs to be addressed; a small group of politically connected black businessmen should not be the only beneficiaries of lucrative BEE deals.
BEE deals centred on enterprise development will ensure sustainable economic growth because small businesses will be supported by the big corporates. In this way, small businesses will thrive, and more jobs created. It is refreshing to have companies such as Microsoft South Africa invest funds to the tune of 475 million ($69 million) in black-owned software firms to meet BEE rules, rather than selling an equity stake to black investors.
Foreign and local firms will now be encouraged to follow suit. The amendments to BEE laws to accommodate enterprise development –if well executed- will go a long way towards sustainable economic development in the country.
Source: http://www.iol.co.za/business/business-news/sa-signals-shift-in-bee-laws-1.1059231
