Trade, Industry and Competition Minister Parks Tau has Gazetted proposed amendments to the existing Broad-Based Black Economic Empowerment (B-BBEE) codes of good practice in a bid to open the way for the establishment of a new Transformation Fund.

The notice has allocated 60 days for public comment on the draft amendments.

These especially affect the codes that deal with enterprise and supplier development (ESD), which will serve as the main anchor for the capitalisation of the fund, as well as the equity equivalent investment programme that is available to multinationals.

The Department of Trade, Industry and Competition (dtic) has estimated previously that some R20-billion a year could be mobilised over a five-year period to help capitalise the fund; an estimate calculated using an historical analysis of ESD spending by companies monitored by the B-BBEE Commission.

To secure enterprise and supplier development credit under the B-BBEE policy, entities must contribute 3% of their net profit after tax to support the development of black suppliers, black industrialists and small firms.

The concept of a centralised fund that aggregates such resources has been met with some scepticism, largely owing to concerns that it could be prone to corruption but also over questions as to whether such centralisation would lead to better transformation outcomes.

In a statement, the dtic said the fund would provide a policy and programmatic instrument that aimed to “refocus, re-engineer, aggregate and redirect the implementation of the empowerment objectives of B-BBEE to promote inclusive growth”.

It added that the objectives of the fund included: the promotion of economic transformation in order to enable meaningful participation of black people in the economy; improving access to funding for black-owned and -controlled enterprises; the empowerment and support of black-owned and -controlled enterprises to participate in value chains across key sectors of the economy; and the mobilisation of financial resources from the private and public sectors using B-BBEE legislation. 

“The amendments are intended to create an enabling legislative ecosystem in the development of the aggregation of ESD and equity equivalent contributions, in support of the Transformation Fund,” Tau said.

During the 60-day comment period the department said it would host sessions with stakeholders to create awareness and to solicit further input.