The 2019 elections have just taken place and South Africa still remains in a post-apartheid growth state. Even though we have a very interesting political field in which we operate, it is save to say that certain areas within this field remains relatively stable. We have not seen, and possibly will not any time soon, a decrease in focus around transformation and righting the injustices of the apartheid area. Government remains committed to ensuring equal opportunities for all individuals and providing opportunities for individuals that were previously disadvantaged by the system into which they were born.
Although there are technical changes within the various legal frameworks around transformation, the strategic focus remains the same. The amendments to the B-BBEE code of good practices provided both challenges and opportunities for businesses within South Africa. For business that are not strategically integrating the codes into their business model, the challenge remains to gain access to markets without the required B-BBEE Level. However, the opportunities are open for small enterprises, these are the business that have a turnover of below R10 million per financial year or who are owned by previously disadvantaged individuals and have a turnover of below R50 million. The amended codes made provision for these businesses by allowing them to complete affidavits that gives them automatic B-BBEE recognition of at least a level 4 or better. This is great as a level 4 gives you a procurement recognition level of 100%. Thereby for every R1 that is spent with your business, the client can claim R1 towards their procurement level, and generic enterprises have specific exempt micro enterprise targets.
This is a huge opportunity for small businesses, however we still experience many small businesses are lacking this insight and make the following two errors. Firstly, they simply state that they are not B-BBEE accredited, as they are not aware of this amendment and in doing so they miss out great business opportunities. Secondly, they pay for a certificate or some form of verification. SANAS and the Department of Trade and Industry have issued the affidavits that are accepted as EME or QSE affidavits. These are the only documents accepted by verification agencies as evidence regarding your EME status. Sadly, there are people in the industry that target the smaller business and make them pay for a document that states they are an EME as well as their level. Do not fall trap to this, this is not necessary, as that document actual means nothing and it would be requested that you complete an affidavit from your clients during their verification. At Unframed, we believe in contributing in a significant way, if you are uncertain if this rule applies to you, please get in touch. Or, feel free to download the template here, complete it and have it commissioned at any independent commissioner, FOR FREE! Make use of the small wins that are incorporated in the codes and grow your business along with South Africa.
Article written by: Corlia Swanepoel [ Unframed Director and B-BBEE Specialist]