TO BEE OR NOT TO BEE

"Participation Builds Unity"

"MADE IN AFRICA - FOR AFRICA"

PRESENTS

TO BEE OR NOT TO BEE
BEE - Black Economic Empowerment

Peter METCALFE
25 OCTOBER 2005

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A number of issues have recently been raised on the much proclaimed and localized (South Africa) issue of BEE - Black Economic Empowerment.
A high profiled conference is currently underway, here in South Africa, to actually measure the impact of this important initiative, important if one had to take into account the actual objective of this initiative.
The Foundation for the Development of Africa strongly recommends the phrase BEE - Black Economic Empowerment be changed to BEE - Building Entrepreneurial Enterprises.

COMMENTS RECEIVED

25 October 2005
Hi Peter,
An interesting comment you made below about BEE.
I personally hate politically correct speech, or, in fact any form of trying to misrepresent something by couching it in more euphemistic terms.
However, you have hit the nail firmly on the head.
As a white South African, BEE to me is not about race, it's about economic development of groups that were undisputedly denied many priviledges under apartheid which has significantly stifled their development. To this end BEE is all about justice and doing what is right. The pie has to be shared more equitably, and lets face it: If all the previous people who could not afford to eat pie are able to eat pie in the future, can you imagine how big the pie will have to become in order to go around.
In other words it makes perfect economic sense.
What doesn't make sense is the manner in which it (BEE) is being done. Big corporates have the resources to throw at things like BEE compliance and can appoint specific people to drive their employment equity, skills development, social responsibility, enterprise development and so on.
A survey was done by SBP and notes that compliance costs represent 8.3% of turnover for businesses with a turnover of less than R1 million whereas for businesses with sales of more than R1 billion it is only 0.2% of turnover.
So SMME's are under enormous financial pressure when it comes to regulatory compliance.
Then Trevor threw us a bone and did away with RSC levies and made a few other small concessions for SMME's which really don't help very much. You see the problem is a bit deeper. SMME's are mainly founded on a certain product, skill, expertise which is marketable and the founder of the business sees an opportunity. However, although the founder may have skills in a certain area he/she may not know anything about all the other areas of business: marketing, bookkeeping, tax compliance, payroll, managing staff, drawing up contracts and the list goes on.
How does this person obtain all the other information and skills to successfully start and run the business as a healthy, growing concern?
How on earth is this poor individual supposed to develop things like an employment equity policy or a workplace skills plan?
The short answer is they can't and are therefore forced to throw money at it by contracting someone's expertise.
This is where the real expense lies for SMME's. It costs money to employ consultants. It takes a lot of time to develop proper policies and procedures to comply with BEE, tax compliance etc and this time is very costly to an SMME. Remember that even if you stripped away all the compliance problems it is DAMN hard to run a business successfully and it requires 100% of the founder's time.
There are all these foundations and organisations like the DTI, SBP and the like. Its acronym heaven out there. But do yourself a favour and try and get some actual information or assistance that will ACTUALLY help you.
What we need:
1) A mentoring process for at least the first year of operation and perhaps beyond.
2) A helpline to assist with questions and that can provide us with frameworks for policies and procedures, eg Draw up a quote, basic costing principles and profit margins, staff leave policies etc etc. They can also assist with legal compliance issues like OHSAct, basic conditions of employment etc
3) A SARS consultant/helpdesk to assist with Tax compliance
4) A BEE advisory service that can assist with development of policies/procedures and help source equity partners. Or a subsidy to assist in paying a consultant.
5) Free open source software to properly run a business from the books to e-mail and internet so that we are not crippled by license fees. Or a subsidy of some kind.
I could write a book but you get the idea. Information and expertise are our biggest costs and in order to Build Entrepreneurial Enterprises we have to find a way to get that knowledge to the small businessman to assist him/her in establishing and running a successful business. And it cannot be available to PDI's only because job creation is job creation and the employed person will not be whining about what colour their employer is. Jobs empower people, end of story.
Anyway, thanks for listening to my long winded rant. Enjoy your day !
Kind regards,
Lloyd Liebenberg
WorkMed
South Africa

25 October 2005
Dear Peter
It is with dismay to realise that there are people in this country who want to see a revolution led by disgruntled Black peolpe who have not seen the fruits of our freedom.
To suggest that BEE be renamed to some phrase relevant to you smacks of ignorance of the plight of Black people.
You cannot suggest that the damage done as of 6 April 1652 to be undone within 11 years.The Dutch East Indian Company had a deliberate plan to colonise Afrika and exploit its people and resources to the detriment of Afrika. What followed thereafter is history as they say.
Therefore you need to learn that for us to restore the land and wealth to the indigenous people, a deliberate plan from the present government has to be introduced to rectify the past. It is thus important that we have Affirmative Action and Broad Based Black Economic Empowerment.
The flaws that have been uncovered like few individuals gaining have to be removed so that everyone shares in the wealth.
It is thus too early to suggest we change the phrase whereas we have not even started empowering people.
For instance we have unscrupolous White business people who utilise the every same concept by making hungry Blacks to front for them. That suggests that some of your White compatriots want to see the perpetuation of White capital at the expense of Black misery. So you see we cannot even begin to change any phrases just to sound politically correct.
Rather allow us to define our circumstance so as to react to it in a way that seeks to build the country. Thereafter, we invite you to conferences and workshops that bring solutions to our plight we is simply Blacks are still excluded from the mainstream economy due to the legacy of the past. The few Blacks who have joined, you and me know how they squeezed through and that's by way of connections.
So in future lets make it a point that certain objectives are achieved before we change any phrases. We for instance stopped calling our government the 'apartheid government' because we succesfully removed it. Now it's the time to empower Blacks so as to have a happy nation.
I think we need to draw some inspiration from the people of Malaysia.
Regards,
Phemelo
Phemelo SEDITI
Fanyakazo
South Africa

All the peoples of South Africa need to learn from the past, then we have to let go of the past and look to the future - together.
Only then will we succeed in making this a better country for ALL - not just a select few.
Lets refrain from using terminology like "You/Us Blacks" and "Us/You Whites"
Peter METCALFE

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