Answer to Question #164356 in Management for BradleyB

Question #164356

Explain the meaning of the acronym “BBBEE” and briefly discuss what in your view the state of BBBEE is in South Africa.


1
Expert's answer
2021-02-19T05:06:18-0500

BBBEE is an acronym for Broad-based Black Economic Empowerment. It refers to a government policy of the South African government to increase black people’s participation in the South African economy and to enhance economic transformation. The initiative was launched to address societal problems caused by Apartheid rule, especially racial inequalities and land repossessed from Africans. The BBBEE legislation tries to include black people into the economy through: developing skills of black employees, advocating for management and employment equity, boosting black ownership, supporting government projects, encouraging relevant stakeholders to comply with its policies and motivating the private sector to co-finance BBBEE-centered transactions.

The BBBEE legislation has been beneficial in the transfer of land to its rightful owners and in the increase in number of black management and professionals. However, in terms of its growth strategy, the BBBEE policy is hurting small and medium enterprises, whose majority are black businesses and heavily contribute to black employment and GDP. They are affected because of the expensive compliance and vigorous implementation process of BBBEE integrated with their limited resources. Politically connected and wealthy black people are benefiting more than the poor because they can secure government tenders and participate in projects. 


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