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The BEE Charter

Draft: for discussion purposes only

PRINCIPLES FOR A BLACK ECONOMIC EMPOWERMENT CHARTER FOR MUSLIM BUSINESS PERSONS

Introduction

South Africa has come a long way in achieving empowerment, although a number of challenges remain to be overcome. An issue that must be seriously considered is the development of a charter that can be realistically implemented and monitored by Muslim business persons, who have and continue to enjoy the vast resources this wonderful country has extended for more than a century.

Broad Economic Stance

The economy is firmly on a higher growth range, emphasising the economic turnaround that has been achieved. The national fiscal deficit has been reduced from 4.6% in 1996 to just 1.5% of our Gross domestic product in 2005, and interest rates and inflation rates are both at their lowest rates in decades. Business confidence is at record levels, and South Africa has had its credit rating upgraded. This has helped to spur strong consumer demand enabling South African economic growth to remain resilient in the face of slower global economic growth. The positive turnaround of the South African economy has thus created a strong platform for accelerated growth in the next decade, with an emphasis on achieving higher levels of productive investment, employment creation, exports, and productivity.

In accelerating growth to build the real economy, the implementation of the Microeconomic Reform Strategy amongst Muslim Business persons must be prioritised, capacitated and where necessary, fast tracked. There should be targeted interventions to bridge the divide between first and second economies. It is within this sphere that Muslim business persons need to enhance economic inclusion and impact on the second economy.

Accelerating economic inclusion is a priority to ensure that economic growth benefits the majority of South Africans, especially those who have been and remain economically marginalised. Here, attention should be afforded to the potential for integrating the needs of those in the second economy into economic cluster programmes and policies.

Broad based Black Economic Empowerment

Black African people must be included in all aspects of the economy in an equitable inclusive manner. The painful and deliberate policies of colonialism and apartheid disempowered, marginalised and excluded black Africans from playing a key role in the economy of their own country. At the centre of transformation, is situated a broad- based black economic empowerment strategy. It must seek to redress the imbalances of the past by distributing ownership, management and control of the country’s economic resources on the majority of citizens and to ensure broader and meaningful participation in the economy by black Africans. The success of this endeavour is required to achieve sustainable development and prosperity for all.

The Legislative context regulating back economic empowerment

  • The Constitution.
  • The Broad Based Black Economic Empowerment Act 53 of 2003.
  • The Preferential Procurement Policy Framework Act 5 of 200 and its regulations.
  • The State Tender Board Act 86 of 1968 and its regulations.
  • Framework for supply chain Management Regulations, 2003.
  • The employment equity Act 55 of 1988.
  • The skills Development act 97 of 1988and the Skills Development Levies Act 9 of 1999.
  • The National Empowerment Fund Act 105 of 1998.
  • The Competition act 89 of 1998.
  • Specific sectoral legislation.

Strategy for Broad – Based Black Based Economic Empowerment

Muslim businesses need a focussed BEE strategy to achieve the broad based economic empowerment of black African persons. This will facilitate growth, development and stability in our economy. In order to achieve this objective, we must set out the core components of such a strategy to provide greater clarity as well as a measure of certainty to the process of BEE which is currently being developed at a national level.

There is now a need to outline an approach to the definition and measurement of BEE as well as the policy instruments that will be utilised to achieve these objectives. The strategy should emphasise the partnership approach to achieving BEE and as such the document must address the concerns and perceived fears of the community. Here, there must be broad and extensive consultation with all the key role players.

The key principles should include principles such as:

  • Black Economic Empowerment is Broad Based.
  • Black Economic Empowerment is an inclusive process.
  • Black economic empowerment is associated with good governance.
  • Black Economic empowerment is part of our growth strategy.

There must at all times be a coherent parallel course that is in conjunction with the policy instruments developed by Government. In adopting a BEE strategy, we must seek to add a new vitality in our national economy by facilitating new entrants to all aspects of the economy that we are presently engaged in. There must be a commitment towards creating more enterprises to produce value- added goods and services, to attract investment, to employ more of all of our people in productive activities. Therefore, a core component of the BEE strategy is the creation and nurturing of new enterprises undertaking new forms of economic and value added activities.

A balanced scorecard for Broad Based Black Economic Empowerment.

To achieve the BEE objectives, there has to be:

  • Consistency of approach
  • Appropriate flexibility to respond to different economic and enterprise conditions, and
  • The ability to measure the progress made.

The scorecard should facilitate the process of setting measurable targets for BEE, for BEE ratings and other measurement purposes.

The scorecard should be used to measure the following elements of BEE:

  • Direct empowerment through ownership and control of enterprises and assets
  • Human resource development and employment equity
  • Indirect empowerment through preferential procurement and enterprise development.

Conclusion

We need to contribute towards building an economy that can meet the needs of all our economic citizens-all of the people and the enterprises- in a coherent and sustainable manner. This will only be possible if our economy builds on the full potential of all persons and communities across the country. A meaningful participation in the economy envisages a socio- political and moral imperative to redress racial discrimination for sustainable growth. The present inequality and uneven development have definite racial characteristics which represent a threat to our fostering democracy. Therefore, an economic transformation policy must form part of the strategic approach for South African Muslim business persons.

Justice Mahomed Jajbhay*.

September 2005.

(*Patron Trustee of Awqaf SA)