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Johannesburg - Leading empowerment proponents have expressed reservations on whether broad-based black economic empowerment (BBBEE) deals will have any meaningful effect on the upliftment of individuals.
Jimmy Manyi, president of the Black Management Forum, said while his organisation welcomes broad-based black empowerment in terms of ownership, it has noted that some companies abuse it.
Manyi said: "Distribution of a few rands to black employees will not achieve the desired outcomes."
He said a meaningful broad-based deal should have a substantial economic effect on individuals.
"It should be about the balance sheet, not an income statement," he said.
The Spar Group announced on Thursday that 10% of its share capital - worth R1bn rand - will be made available for purchase by the company's employees and franchises which are between 75% and 85% black-owned.
Earlier in July, SABMiller announced a R6bn empowerment deal which would result in 10% of its local subsidiary being placed in the hands of the company's black employees and customers (liquor retailers).
Ajay Lalu, partner at black economic empowerment (BEE) advisory firm Bravura Consulting, said these deals bode well for black equity ownership with regards to broad-based empowerment involving employees, stakeholders and communities.
However, he shares Manyi's views on their overall effect.
"Broadening the ownership beneficiaries is the right thing to do, but my only concern is whether these employees can be real agents of transformation," said Lalu.
"I think in assessing these empowerment transactions, we need to look at the impact they will have on individual beneficiaries both now and over time."
The BEE policy recently came under fire from political analyst Moeletsi Mbeki, who has called on government to scrap the policy in his newly-launched book Architects of Poverty.
Mbeki argued SA would do better to encourage entrepreneurship rather than waste resources on the failed BEE project.
Manyi dismissed Mbeki's views as based purely on ignorance, but acknowledged the economic slowdown has negatively affected the pace of BEE.
- Fin24.com