Tau doesn't expect R100bn transformation fund to threaten existing B-BBEE legislation
Trade Minister Parks Tau published a draft concept document on the fund last month, sparking criticism and applause.
Minister of Trade, Industry and Compeition, Parks Tau. Photo: DTIC
JOHANNESBURG - Trade and Industry Minister Parks Tau says he doesn’t expect the controversial R100 billion transformation fund to rattle any cages on existing triple (Broad-Based Black Economic Empowerment) B-BBEE legislation.
Tau published a draft concept document on the fund last month, sparking criticism and applause.
The fund is set to address the ever-growing funding requirements for businesses owned and managed by black entrepreneurs, in what the government says is meant to propel inclusive growth across various sectors of the economy.
ALSO READ: Parliament's Justice committee wants govt to fight for new BBBEE code to transform legal sector
The transformation fund is expected to be financed in R20 billion tranches over five years with the help of the private and public sectors.
The fund will be administered through a special purpose vehicle, with a board of directors from the government and the public sector set to oversee the implementation of the fund.
Tau says the fund will be run in line with existing BEE objectives, adding he doesn’t expect the amendment of the codes of good practice in existing B-BBEE legislation.
“Let me stress that the transformation fund does not replace any well-functioning vehicles already in place. Instead, it seeks to amplify what is already required under existing B-BBEE legislation.”
The B-BBEE policy through the codes of good practice requires entities to contribute through enterprise and supplier development in a 3% of net profit after tax on the development of black suppliers, black industrialists and Small, Medium and Medium Enterprises (SMMEs) to broaden the industrial and services base.
Tau says disregarding empowerment initiatives poses an existential issue, as the government moves ahead with its R100 billion transformation fund.
The fund was first touted last year, with a draft concept document published last month for a 30-day public comment process.
Tau has since extended the commentary process until the end of the month.
He said placing transformation on the back burner is not the answer.
“At its core, the Transformation Fund aims to address the long-standing structural exclusion in our economy. Allow me to emphasise that this fund is not seeking to impose any new demands on business and industry but rather, it will consolidate funding efforts through Enterprise and Supplier Development (ESD) and other obligations as prescribed by the B-BBEE Codes of Good Practice.”