The third edition of the Sanlam Transformation Gauge is set to provide clarity on performance of Broad-Based Black Economic Empowerment (B-BBEE) in South Africa, as it presents a comprehensive economic transformation scorecard of the country. The report will be published by Sanlam, the largest non-banking financial services group in Africa, in partnership with the Sunday Times Business Times.

Since legislated in 2003 B-BBEE has faced severe headwinds. This has ranged from being believed to be connected to corruption and State Capture to a disillusioned, unempowered majority of South Africans who have watched the policy fall short of its expected outcome to achieve financial equality and inclusion.

Andile Khumalo, co-founder of the Sanlam Transformation Gauge and CEO of KhumaloCo says, the recent negative national conversation surrounding economic transformation calls for an objective assessment of its performance and proposals for interventions and course corrections. This will be provided by the Sanlam Transformation Gauge 2023.

With sector-specific analysis, the Sanlam Transformation Gauge will pose the burning question, “is BEE policy keeping pace with major changes in industries?” The report will assess the unseen solutions that could solve persistent policy uncertainty surrounding procurement and other areas of BEE. “This next edition will continue in the same vein as the past two iterations, with tightly defined views of how sectors within South Africa are transforming and where they are being hindered. This has the power to enable key players to work together to action meaningful inclusivity, growth and transformation within their industries,” Khumalo said.

Khumalo adds that a key theme that emerged from the commentary within the 2022 Sanlam Gauge Report was that an overhaul of the B-BBEE framework was necessary to improve effective of transformation. “We believe this is going to develop into an important issue in the short term.”

The Sanlam Transformation Gauge 2023 pursues a current view across ownership, management control, skills development, Enterprise Supplier Development (ESD) and socioeconomic development, to inform both industry and country conversations. One theme that has been consistently carried through, is the belief that the reality on the ground is far worse than the scorecards suggest.

Adding to the robust insight of the intelligence report and to stimulate the debate over the future direction of transformation policies, the Sanlam Transformation Gauge 2023 will include results of a survey that canvasses the views of B-BBEE verification agencies. These agencies, through their interactions with businesses across all sectors, are at the forefront of measuring B-BBEE within companies and are acutely aware of the challenges affecting transformation.

Similarly to the second iteration, the panel of economic and social development experts will put forward actions for progress in the annual publication. For example, the prior edition highlighted the lack of a credible and effective national measurement process for B-BBEE. The report indicated that Enterprise Supplier Development (ESD) was the second worst performer in the country and in February 2023, the B-BBEE Commission released an ESD research report with a focus on “how ESD funds can be effectively implemented for the purposes of promoting the development and growth of black-owned businesses[1]”.

There is no doubt in the minds of B-BBEE experts that changing how we unlock ESD offers huge potential for inclusive economic growth. Ray-Ann Sedres, Chief Transformation Officer at Sanlam says that procuring from small black-owned businesses, providing other support and developing new enterprises is solid in principle and, if effective, would generate a strong base of small businesses that would grow and employ more people, directly addressing South Africa’s triple challenge of poverty, inequality and unemployment.

“We need to work with the B-BBEE Commission and sector councils to help to overcome the barriers being encountered in measuring transformation. The Sanlam Transformation Gauge continues its role as a platform that facilitates debate on the pace of socio-economic transformation of the South African economy, to drive action that propels the country forward towards a more inclusive economy, and to safeguard the integrity of the original intent of the B-BBEE legislation” Sedres added.

The Intellidex-led research relies on B-BBEE scorecards from companies, grouped into sectors using the international Standard Industrial Classification (SIC) Codes. It reports across 11 sectors of the B-BBEE classifications system which are: Agriculture; Construction; Defence; Financial; Forestry; Information Communications Technology (ICT); Integrated Transport; Marketing, Advertising & Communications; Property; Tourism; and Generic, the Sanlam Transformation Gauge reflects a national picture of transformation.

The third Sanlam Transformation Gauge event will take place on 18 July 2023, presented by Arena Events. This will be followed by the publication of the highly anticipated Sanlam Transformation Gauge research findings in the Sunday Times Business Times.

Visit: www.sanlamtransformationgauge.co.za to reserve your ticket

[1] Source: https://www.engineeringnews.co.za/article/bbbee-commission-releases-report-to-improve-enterprise-supplier-development-2023-02-06

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