Youth economic council slams Enoch Godongwana’s ‘anti-BEE’ law

The South African Youth Economic Council (Sayec) has rejected changes to the Preferential Procurement Policy Framework Act (PPPFA) by finance minister Enoch Godongwana which drop the practice of applying BEE pre-disqualification to tenders.

State-owned entities such as Eskom, Denel, Transnet and others no longer have to only deal with suppliers who are fully BEE compliant, according to regulations published on Friday.

The council’s spokesperson Sthandiwe Msomi said Godongwana’s move was regressive and counterproductive to building a class of black capitalists and industry players.

“Black economic empowerment and affirmative action policies have been at the centre of forcing the hand of the private sector to distribute capital and money into black business and previously disadvantaged communities,” Msomi said.

The council said its mandate was to envisage a South Africa where young black people are “owners of the strategic means of production in sectors that bring in foreign revenue and global competitiveness”.

“Sectors such as energy, mining, transport, telecommunications and manufacturing are key to industrialisation. Those sectors remain untransformed. This new set of policies will automatically exclude our people from a chance of competing in these industries and moving up the supply chain,” Msomi said.

The legality of BEE legislation was recently challenged by lobby group Sakeliga in the Constitutional Court.

Sayec maintained that while the judicial processes are seen as just and fair, they ought to be critical and should be scrutinised to determine whether they are in line with the developmental agenda.

“The state must focus on ensuring black businesses are intentionally included in procurement processes” Msomi said..

“The frequent excuse of black business failing to harbour the capacity to do business must be proactively solved by the state by capacitating black businesses with capital, skills development and access to global markets such that we see more black businesses achieve economies of scale and compete with big white-owned businesses.”

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