Is broad-based black economic empowerment (B-BBEE) working to transform SA’s economy? A tough question to answer, but a new consolidated research report, the first of its kind, could now point the way.
Sanlam, the largest non-banking financial services group in Africa, has partnered with Arena Holdings, publisher of the Sunday Times’s Business Times, and KhumaloCo, the specialist investment firm, to launch the Sanlam Gauge.
This research report aims to provide a holistic measurement of economic transformation in SA that accounts for all elements of B-BBEE.
The Sanlam Gauge will deliver insights on sectoral performance — rather than individual company performance — for a more defined view of how sectors are transforming. This will help industry stakeholders decide on new strategies for inclusivity, growth and transformation.
‘Working towards scorecard for SA Inc’
Andile Khumalo, CEO of KhumaloCO and co-founder of the Sanlam Gauge, says that while the JSE compels companies to disclose their B-BBEE scorecards on its SENS news service, SA still lacks a comprehensive gauge on progress in economic transformation.
“In addition to JSE-listed companies, there are powerful levers that could drive economic participation of the majority of South Africans in medium-sized and large unlisted businesses as well as in state-owned companies and agencies,” he says.
“There is also the SME [small and medium-sized enterprise] segment which, according to recent research, makes up 91% of formalised businesses, provides employment to about 60% of the labour force, and has a total economic output that accounts for roughly 34% of SA’s GDP.”
The Sanlam Gauge will measure the pace of SA’s overall transformation as if it were a business, says Khumalo. “Our vision is to one day publish a B-BBEE scorecard for SA Incorporated.”
He adds: “We need to deepen the B-BBEE transformation narrative on how we, as a country, are progressing in driving the effective participation of black people in the mainstream economy.
“We believe that a credible measure and assessment of such progress in the implementation of B-BBEE policy is critical. This is where we and our partners believe the Sanlam Gauge can deliver much-needed direction in areas requiring more attention, to address the country’s high Gini coefficient [the statistical measure showing income inequality within a country].”
Karl Socikwa, group executive: market development at Sanlam, says the Sanlam Gauge is an important partnership in the context of Sanlam’s own transformation.
“In the midst of unprecedented events this year, the prevailing and critical imbalance in SA society has been brought to the fore once again,” he says. “Corporate society’s vital role as a key driver of economic inclusion and redress has never been more urgent.
“We are therefore excited about the possibilities that this report presents. We hope that it will do far more than spotlight transformation in SA. We hope it will act as a platform for robust engagement through which we can learn from each other and grow together as a private sector deeply committed to working hard for a fair and transformed society.”
The research will be conducted by Intellidex, the SA research house. The B-BBEE commission of the department of trade & industry will also make its reports and data available for use in the research.
The inaugural Sanlam Gauge event will take place in May 2021, presented by Arena Events. This will be followed by the publication of the highly anticipated research findings in the Sunday Times’s Business Times.