Zuma: No BEE changes

2009-07-24 17:01

Johannesburg - Black economic empowerment (BEE) is set to continue even as the global economic crisis sees a drop in enthusiasm from the private sector, said President Jacob Zuma on Thursday.

Speaking at a black business and professional meeting, Zuma said: "The current broad-based black economic empowerment (BBBEE) framework is adequate - our view is that we have a good BBBEE policy."

Zuma's address came in response to concerns raised by black business groups like the Confederation of Black Business Organisations.

Issues raised at the meeting included the fact that the economic crisis might cause South African corporations to slow down transformation efforts.

The number of ownership transactions is declining as the dire economic climate causes finance to dry up, according to Jenny Cargill, director of Businessmap Investment Strategy Advisers and a BEE ownership specialist.

Steven Hawes, research project manager at Empowerdex, concurs. "Banks are not willing to leverage consortiums in this economic climate; we were bound to see a slowdown [in BEE deals] as all the big ones had been done already," he said.

He believed an appetite for BEE does still exist, despite the financial challenges. "We've had big empowerment deals done recently by companies like SAB [South Afrcan Breweries] and Spar, not involving debt. They're all vendor-financed."

"[BBBEE] is not something the government promotes, but they're not giving up on it - it's too politically sensitive," said Cargill. "It's still a bit of an untouchable debate."