Johannesburg – Against a backdrop of the harsh realities of Covid-19 potentially deterring investment, there have been renewed calls for a review of transformation laws in South Africa, particularly the impact of B-BBEE empowerment regulations on EU companies.
Investors are concerned about the lack of clarity concerning policy and structural reforms with the B-BBEE policy, one of which has been described as often eliciting a “deer-in-the-headlights” response from even the most seasoned investors”, said the findings of a new study unveiled during a webinar attended by top European diplomats, including the EU Ambassador to South Africa, Dr Riina Kionka.
Entitled EU Investors’ Responses to Broad-Based Black Economic Empowerment (B-BBEE): A Skills Enhancement Model by research expert Feroza Samaai-Abader, the study emphasised support for empowerment, acknowledging that South Africa offers many attractive assets for foreign investors, such as its diversified and advanced economy, its abundance of natural resources and its well-developed infrastructure.
Samaai-Abader, whose report was commissioned by the EU-funded “EU-South Africa Partners for Growth” Project, described the B-BBEE policy as the government’s key instrument in reconstruction and development. Through this policy, she said economic transformation has progressed from being just a strategic vision to a legislated, measurable actuality.
“But as the proponents of B-BBEE sought to increase the regulatory and measurability aspects of the legislation, the policy, primarily affected through the codes of good practice, has become rather convoluted and complex, often frustrating businesses rather than encouraging transformative practices,” Samaai-Abader said.
